PHILIPSBURG--The new management of Checkmate Security Services on Tuesday attempted to justify why it is in line for a massive US S $2.2 million increase in its contract at the Harbour Group of Companies this year.
However, former owner of the company Michael Kuiperi said some of the statements from the company were "unfounded" and questioned whether the harbour had "a new policy in investing in external security by accepting the additional price increase."
In a letter to The Daily Herald on Tuesday, Checkmate's new management accused this newspaper of a "frivolously fact find information" and said "no one has attempted to contact the owners, Managing Director, or any Management of Checkmate Security Services pertaining to security services in the port of St. Maarten."
It should be noted that this newspaper placed several calls to Checkmate General Manager Chet Euton on Monday afternoon to seek a comment on this issue, but all calls went unanswered. And none of the calls were returned.
In its statement, issued by Euton, Checkmate said the focus and responsibilities of the Harbour were to improve and enhance its security measures as well as its facilities becoming compliant with International Ship and Port Facility Security ISPS Code. "These measures come with an expense, i.e. the compensation of employees, operating costs, taxes, cost-of-living adjustments and minimum wage increases."
Checkmate said the cost of living had increased by 4.7 per cent from August 2011 to August 2012 and 5.4 per cent over 2012 and since 2010, minimum wage had increased gradually approximately 14 per cent up until December 2012. "As per January 2014, the minimum wage was indexed by 2.8 per cent."
"It should be understood that these are statutory-based adjustments for which Checkmate Security Services nor the St. Maarten Harbour have control over and that based on these increases Checkmate Security has no alternative but to adjust its rates to reflect these changes, something that was not done by the previous management and owners of Checkmate Security services, which basically absorbed these increases with no modifications."
The new management also claimed that Checkmate had been providing security to the harbour from 2002 to 2015 without an increase.
In an invited comment on the allegations from the new management, Kuiperi said Checkmate had had numerous price increases under his watch. He said he currently had zero contact with Checkmate and could not comment on the rate increase to which current management was referring.
"What I can state is that throughout the years that Checkmate has been providing security services to the harbour we had numerous price increases. In 2010 we signed a five-year contract that will end December 31, 2015, and once more a price increase was successfully negotiated, so the statement of the General Manager that Checkmate never increased their price to the Harbour Holding is incorrect," Kuiperi said.
"If I was the General Manager I would have perused the files in the office before making unfounded statements. He will also see how difficult the Harbour Holding was doing for a ten-cent increase in those days. Perhaps the Harbour Holding has a new policy in investing in external security by accepting the additional price increase," Kuiperi added.
He wished the new management and shareholders "the best and hope that they are able to move forward another 23 years of business."
The new Checkmate management said the average security personal/unit (not including supervisory or administrative staff) earned US $5 per hour and because of the shift scheduling and number of personnel on site 24 hours they made an additional $2.50 in overtime, which brought them to $7.50 per hour.
"Add in SZV, ABZ, AWB and all applicable taxes for another $1.10 and we are at a cost of $8.60 per unit per hour. A difference of $1.90 versus the $10.50 mentioned in the article; and we still haven't calculated operating cost on a monthly basis such as trainings, radios (Zenitel), uniforms and equipment, daily consumables. All of this at roughly $22,000 to $25,000 man-hours overall monthly with the possibility of $42,000 to $47,500 in revenue."
The Daily Herald made a rough calculation, based on the above figures, that if a security guard works an average eight hours a day without overtime in a six-day workweek, with four weeks per month, he or she would earn a gross salary of $960 (8 x $5 x 6 x 4). If he/she is paid additional overtime for working eight hours longer every week than the normal 40-hour work week dictates, he/she would receive an additional $240 (8 x $7.50 x 4).
If a security guard works an average 12 hours a day because of the long hours cruise ships stay in port, he/she would earn a gross salary of $1,920 per month. This newspaper understands that Checkmate employs 60-70 guards at the Harbour.
The current Checkmate management asked, "Why is it that foreign businesses can establish themselves in St. Maarten with less inspection and inquiry? Why is it that when a local man/owner tries to run a local business correctly and successfully he is dragged through the proverbial mud? And who in their right mind tries to run a business at a loss or to fail?
"The article suggests that $7.07 an hour is a feasible number, based on what, an old agreement and bad business decision that was signed below practicable operating margins by the previous owners?
"We are here to use good business sense and a five per cent increase is to assist in correcting some of these previous bad business decisions! Is that not the objective of good business?"
It should be noted here that the actual rate increase from $7.07 to $10.50 is 48.5 per cent and not five per cent as Checkmate management claims.
"To date the new management of Checkmate Security has had to pay NAf. 2.3 million in back taxes to SZV," Checkmate management added. "So should Checkmate Security continue to throw good money after bad? Currently Checkmate Security Services employs 350-plus personnel, 190 of which are locals, 89 of which were hired by the new management within the last year."
The release did not indicate whether the Harbour considers the necessity to pay arrears in SZV contributions a valid argument for a rate increase.
Checkmate concluded by saying it was "striving to be sustainable" and "provide quality security services at standard and conventional rates."
Local businessman and former Democratic Party (DP) President Michael Ferrier waded into the issue on Tuesday by questioning why the Harbour's "lucrative" security contract had not been put on bid to give all security companies in the country a chance to vie for the contract.
In a letter to this newspaper on Tuesday, Ferrier also called on the harbour to request that Checkmate disclose the names of its owners.
"Being that the Harbour Group of Companies is government-owned, when an existing contract has to change so much that the cost to the client (the Harbour Group) increases by 300 per cent, should the Harbour Group not put the security contract out on bid again, thereby offering all security companies a chance to bid on what is obviously a very lucrative contract?" Ferrier asked.