Gov. John deJongh Jr. sent a letter to the owners of Hovensa Friday informing them of the 30th Legislature’s rejection of the proposed deal that would have governed a sales process for the shuttered St. Croix refinery and that government expects the company to abide by terms of the Third Concession Agreement.
The governor’s action was announced Saturday in a news release from Government House.
The governor’s letter, along with a letter from Attorney General Vincent Frazer to Louis W. Harrigan, port director for U.S. Customs and Border Protection, can be seen here.
Wednesday, the 30th Legislature voted against ratification of the proposed Fourth Amendment Agreement that would have governed the sale of the refinery on St. Croix. Voting against ratification were Sens. Terence Nelson, Nereida O’Reilly, Alicia Hansen, Diane Capehart, Kenneth Gittens, Shawn-Michael Malone, Janette Millin Young, Tregenza Roach, Myron Jackson, Clifford Graham and Clarence Payne III. Voting in favor were Sens. Sammuel Sanes, Judy Buckley and Donald Cole. At-large Sen. Craig Barshinger was absent from the session.
DeJongh’s letter was addressed to Lawrence H. Ornstein, executive vice president of Hess Corporation, and Director General Omar Bravo of the Venezuelan national oil company, Petroleos de Venezuela, S.A.
In his letter, the governor noted that despite the best efforts of Hovensa and those of his administration and many members of the Virgin Islands community, the Legislature declined to approve the proposed amendment to the concession agreement. The governor informed the owners of Hovensa that the effect of the Legislature’s vote is that the current interim agreement between the parties will expire Thursday, at which time the provisions of the Concession Agreement that binds the parties will go back into effect.
“The Government expects Hovensa to comply fully with all its obligations under that Concession Agreement,” deJongh wrote.
The governor noted that upon expiration of the interim agreement, “The Government will take all necessary measures to enforce those obligations and protect its rights.”
DeJongh restated the long-held position of the government that a stand-alone storage terminal business operating free from generally applicable import duties is not permitted by the existing concession agreement and is not in the longterm interest of the Virgin Islands.
In anticipation of the expiration date, deJongh instructed Frazer to write to U.S. Customs and Border Protection and asking them to resume collecting duties on non-exempt shipments of petroleum products for storage at Hovensa. The six-percent customs duty will go into effect on Friday, the day after the interim agreement expires.
So on Friday the cost of gasoline at the rack just went up 6%. For a little while. That 6% will completely wipe out the ability for Hovensa to operate as a terminal. So bye, bye Terminal.
Of course, they could file a TIB for the import of every shipment, and end up paying nothing again once proof of export is provided.
A year and a half later and back to square one… well, more like behind square one…
Then again… What is plan B? Is there a plan B? More than a year is enough to have come up with a solid plan B…
I wish the people would take to the streets in a pacific demonstration urging the government for answers…
Best of luck to the governor in enforcing the old agreement on a company that can’t follow through with it…
WHAT I WOULD HAVE DONE IF I WERE A SENATOR
1. Identify all former Hovensa employees both on and off island.
2. Set up a task force comprised of such employees and Wapa employees.
3. Have the task force, senators, government house, and all interested persons meet on a bi-monthy basis.
4. Gather IDEAS, incentives; Identify possible scenarios and outcomes (5/10/20/30 years from now.)
5. Explore opportunities for the shuttered Hovensa Site to be partially reopened with the aim of subsidizing or eradicating the need for external energy solutions. In other words, use the current site for producing energy for St. Croix and St. Thomas.
I am just scratching the surface here, but in short, your elected officials should have been asking the right questions to the right people a year ago.
It would seem that the people of the VI are not competent to choose elected leaders… and any true leaders have since left those islands.
You have hospitals on the brink of collapse, an education system that ranks lower than anywhere in the US, a crime rate double that of the US Murder Capital, astronomical energy costs, while the churches and the police force flourish.
Where there is no VISION, the people perish.
That’s why you would have never been elected…your making to much sense. The government could have just asked the people who were there for advice rather than spending more money on consultants but again they wouldn’t have listened to what we had to say. I applaud your sense of reasoning but unfortunately too little too late. The elected leaders of the senate can’t even run their own affairs without being investigated so dont expect them to provide any sort of leadership in this matter.
what is TIB ?
It appears you don’t vote here or consider yourself one of “we”. It’s easy to stand off and take potshots where you’re not vested and have no part in the decision making.
What input could employees from WAPA or Hovensa have in the decision making between a company, operated by two separate countries, brought together by the ability of Hovensa to deal with high sulfur crude oil and tax breaks for entering the US from the US Virgin Islands?
The Governor has never properly been given credit for recognizing the economic truth behind Hovensa wanting a “Fuel Storage” depot here and for using that small piece of leverage to get these two different countries to agree to sell the Refinery.
For some reason these Senators, who have failed to ratify the deal worked out between the Administration and Hovensa, have absolutely no substitute plan in place.
What about the extra burden on our Public Schools as private schools close and many subsequent scholarships are lost. This doesn’t address the extra burden of more students attending Public School with a lower tax base.
Classes will get bigger and supplies will get stretched thinner and thinner.
As you listen to the Senators rail against the deal with Hovensa, you could be under the false impression the Legislators had presented a plan which was rejected. Otherwise, what is their reason for hating the plan presented without something to compare it against?
Like it or not, a spade is a spade. The writer has valid points, show me what potshot they are wrong about. Show me how we have progressed over the last 20+ years election after election! I see the same mismanagement, corruption and failed government year after year. Maybe people believe new police interceptors and pot hole filled roads are tourist attractions. Show me where these people making their salary plus having the ability to retire with almost a full pension without having even worked 10 years is benefiting the people of the Virgin Islands. Like them old folks would say…Ayo wake up!
I thought it was obvious, but apparently it is not.
We have/had Hovensa employees with 20-40 year tenure in specific experience operating the plant. What many may not know, is that the highest skilled personnel at Hovensa were from our local population. They may have brought in white collar managers, but the people with the knowledge were local. People who will now contribute to building the economies of Texas and Louisina.
Senators are not particularly skilled at anything except running their mouths. Intelligent people seek knowledge before going to a bargaining table. True leaders EMPOWER others so that work can be done by delegation. The senators should have had a COUNTER PROPOSAL. The mere fact that none was presented means that they had none. NEVER under estimate the value of your local people.
You ask – what input would these employees have, and seem more intent on awarding the governor kudos for his role in recognizing something. When you have a governor at odds with a legislature you have a dysfunctional government… case in point. Ever heard of divide and conquer? Look no further than your government house.
You also mention education. You see, when the refinery closed, the education bureaucracy saw the opportunity to fire teachers/etc who they did not like. They used their political power to inflict harm on those persons who they had vendettas against… it is the virgin islands way, sad to say. (no crisis goes to waste)
So fast forward to today and their is a lack of teachers. This is what your leaders do… use their power for personal gain and power.
If you need me to break it down further let me know, but again…. the employees of Hovensa and Wapa, together at a discussion could have yielded at least one idea, providing at least one counter proposal so that we would not have to litigate against Hovensa…
Litigation is a contest of who has the deepest pockets. Hovensa is still not going to pay as they can just claim bankruptcy after the government spends 100’s of thousands to prove a point in courts.
Where there is no vision the people perish.