Nagico ordered to pay $33.2 million

Hello Folks,
Nagico was just ordered to pay the Airport $ 33.2 million in advance .

Hi Lesley--In advance, or altogether?? The DH link says "advance", as in pay that much now and if they can prove more damage, pay more later??

Daily Herald link

Hi Carol , in advance .

This is for the advance payment . The damage part will follow with proper paper work when provided.

That is great news for the island recovery.

Good. I was afraid the judge would rule that is all they can get. Great news, to get moving!

Yes indeed.

Lesley; Anyway to determine if this is in addition to the previous $25 million that NAGICO advanced? The news article was confusing.

They have to pay the difference .

No!

The $33.2 million advance is in addition to the previous $25 million in advances. These sums are paid against all obligations that Nagico will incur. This $58.2 million in advances far exceeds the $37 million in total commitment that Nagico offered. This is a huge win for the airport authority and means more money in the future.

I hope you are correct, but do you have a link to that effect?

Yes and Yes.

The court also ordered Nagico to pay court costs.


https://smn-news.com/st-maarten-st-...-pay-an-advance-of-usd-33-2-million.html

Thanks. Good news!

Simpson Bay:--- In a judgment of 30 July 2018, the Sint Maarten Court of First Instance ordered Nagico to pay to Princess Juliana Airport (PJIA) an advance of USD 33,2 million. This amount is in addition to an advance of USD 25 million that was already paid by Nagico.

UPDATE

And the parties' response to the ruling.

Responses

Sounds like 54 mil is the final total settlement including the 25 mil advance or am i missing something?

You are missing a lot. This was not a settlement but an ordered advance against a “future” settlement. This will play out for another year or more. Nagico will forever try to limit any money that they will pay out and PJIA will have to fight for every dollar they get in insurance proceeds. This is far from done.

It was rather humorous to find out that after Nagico’s many many proclamations about the dearth of materials they were provided by PJIA that it comes out that Nagico, in all this time, has only provided a single typed page making their claim of a $37 million settlement and their findings.

It was also $58.2 million in advances and not $54 million.

I found the article quite interesting. While I have not read the policy, I am somewhat familiar with insurance claims. The insurer says the policy covers either the cost to repair, or the actual value ( without deducting for depreciation ), which ever is less. . It is as if your house ( excluding the land ) was worth $100,000 but the cost to rebuild it exactly as before was $150,000, then you would only be covered for $100,000. ( Many of us in the US have replacement cost coverage, which means we get the cost to replace, even if it is more than the value) Since the airport has not been repaired, the insurance company was saying it is too early to pay, because they don't know whether all items will be repaired, and they need to look at each item, determine exactly what it would cost to repair, and it s actual value, and determine which is lower. Apparently, experts for both sides have done the calculations, but they only agreed as to about $10 mil of the damages. The difference between the two experts as to the remaining items is about $36 mil. That may be in part because some of the cost to "repair" may be deemed to be an improvement, or that some repair was necessary before the storm and was not damaged by the storm.

The part I found most fascinating, and may be tied up for quite some time, was the loss profits claim. In an earlier thread, I saw the suggestion that loss profits would be easy, look at the revenue from the prior years. In this case, however, the insurance company argued that it did not insure the remainder of St. Maarten, it only insured the loss of profits that would result from damage only to the airport. While the airport revenues dramatically declined after the storm, the insurance company is saying that part of the decline is due to the damage to the rest of the island. I have not looked at the policy, but I think it is an interesting point - if the hurricane hit only the airport, and the rest of the island was spared, the total loss profit could easily be estimated by looking at profit in prior years. On the other hand, if the hurricane damaged the rest of the island, as IRMA did, and did not damage the airport at all, clearly the airport profits would be much less after the hurricane, due to the decrease in tourism. In reading the article, I did not see any mention of an appeals court. I also saw that the insurer says that the whole matter needs to be resolved by arbitration - if there is an appeal, that may cause a delay if it is sent to arbitration.

Interesting take on this. But airport could not function in the condition it was in after Irma and still can't accommodate all the air traffic that wants to use it. Therefore causing loss of revenue even though the whole island was hit.

Also to consider, SXM is a hub for connections to surrounding islands not damaged, a base for some smaller airlines and an airfreight hub. They also had transient and resident hanger space as well as full service aircraft fueling and repair vendors all generating revenue for the airport that was/is impacted.