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Respect the Minister Ersel Arends will meet with Arubus employees to announce to them changes in the company’s management. A few weeks ago, the lawyer had already assumed the chairmanship of the supervisory board. Demis Ilis has already retired. Last week, director Edwin Mohamed announced that the government no longer has confidence in him and that he must leave. He may offer a “golden handshake”-style package to go home. He wants Frederick Noupold to take his place
The latter was in the news when in October 2021, Nubul was drunk in a fast food restaurant and was irritated until the police were called to arrest him. He was arrested to rest in peace. This fact led to Environmental Protection Agency The parliament questioned his integrity, which led him to ask the Auditor General of Aruba (Algemene Rekenkamer) for his resignation. Three years later, the same government that governs with him today is looking for him for a directorship in a state-owned company.
Seaman is decisive
Everything indicates that this week will be a decisive week for Arubas, Minister Ersel Arends The approval of the Council of Ministers is necessary to introduce changes that Arubes may not necessarily be happy with. He assured the workers during the protest a few days ago that action will be taken and that the workers are not to blame for the company’s current precarious situation. While changing the directors will not improve the company’s financial situation or bring back passengers, it will at least change the direction of the ship’s sailing.
Coastal plate changes
Talk is easy, but achieving real change costs money, according to people familiar with the matter. If you want to reduce the number of workers at Arubus, you will have to offer workers attractive separation packages, which means additional budget. There are new ideas to share, but none can be implemented because Arubus says there is no funding. Governments have complained that Arubus is losing money, but none of them have been able to bring lasting change to the structure of the company’s rise.
Environmental Protection Agency Do you agree?
The question is whether ministers Environmental Protection Agency The appointment of Frederick Nuboer to the position of Arubus director will be approved at the Council of Ministers. Sources close to the matter assured that there will not be much confidence in Nuboer within the Yellow Party, and having him leave from ARA and now bring him back through the back door of Arubus would seem bad for the government itself, but now for the coalition as well. On the other hand, this is not the first appointment of Raiz, he is not a Environmental Protection Agency I would prefer, but it is still the Minister’s decision Ersel Arends Dee Lez Master Tooma.
Arubes is in serious trouble
The business model that Arubus operates in is under a lot of pressure. Since the concession was first awarded to Arubus in 2012, the number of passengers they carry each year will decrease by 70% by 2024. They operate in a very competitive market where other services such as taxis and buses or transport companies compete with them.
I lost my license plate last year.
Arubus’ financial analysis shows its precarious situation. Despite the fact that Arubus relies on large state contributions (62% of revenues on average), it has made losses every year except 2018. Between 2017 and 2020, its own revenues fell by more than 50%, due to a decrease in passenger numbers and a change in its product mix with relatively cheaper fares, while the cost base fell by 18% in the same period. In 2020, Arubus’ own revenues covered only 25% of its expenses. By law, they must sue Afl. 12.20 per journey to cover all costs, but in reality, with smart cards, the fare charged today is the average of Afl. 2.60. In 2016, Arubus lost 500,000 florins, in 2017 3.7 million florins, in 2018 1.3 million more, in 2019 again 500,000 florins and in 2020 1.6 million florins. Considering that the Aruban government subsidizes Aruba with over 10 million florins per year!
Tin but bus based
After COVID, the number of passengers dropped dramatically, which led to multiple routes being cancelled and adjusted. They never changed after COVID because the passengers never came again, either because they bought their own cars or used alternative transportation. So Arubus continued to buy buses until they had more buses than they needed. So they have a huge reserve fleet there, which puts pressure on the financial situation.
Finding the culprit
With the reality on the table and the investigation conducted by PricewaterhouseCoopers Advisory NV of the Netherlands on the orders of the Ministry of Interior and Kingdom Relations of the Dutch Government, now everyone knows the situation of Arubus. In order to solve these challenges, you have to change the entire business plan and adjust the company vision. You have to decide which services to continue to provide, tariffs and internal costs. Because the fact is that the government cannot continue to subsidize millions of dollars in a bottomless pit. Now it is implied that the director Edwin Mohamed appointed by the government Environmental Protection Agency They wanted him gone so they could appoint someone else who could turn the company around, make it more manageable and better control expenses.
Kiko Ta Conceha
PricewaterhouseCoopers Advisory NV, Netherlands, recommends developing a mobility vision and defining the role of Arubus within it. Define a future vision for mobility and transport in Aruba, in which Aruba’s mobility needs become clear. The extent to which managing car traffic, infrastructure, parking management, public transport and traffic decisions contribute to achieving this future vision. It is also necessary to define the intended role of Arubus (including Arutram and Aruparking) in Aruba’s transport, such as whether Arubus wants to continue operating a national network or only operate high-volume passenger transport. For Arutram, it is necessary to verify to what extent tourist transport is considered a public task in mobility. For Aruparking, a balance is to be struck between accessibility in the city center and payment for parking facilities.
Create operating conditions between Arubus, AruTram and AruParking
Translate into an expected role when granting a concession, aimed at promoting greater accessibility, reliability, payment and sustainability, with a focus on “what is the intention” rather than “how” to achieve it. Ensure enforcement of the concession, preventing unnecessary competition. Create legal preconditions and enforcement options so that Aruparking can operate properly. Reintroduce a revenue stream for AruTram (through cruise passenger fees or fares, so it can no longer remain a free service. For AruTram and AruParking hope to start charging within this year!
Adjusting the 2026 Vision
In the short term, it is recommended to redefine the strategy to 2026 and realign Arubus operations. Redefine the strategic business plan to 2026 based on the future vision of liquidity and concessions, including setting strategic goals for expected roles and concessions requirements, and developing structured KPIs to monitor and determine target values and measurement moments. Develop a new organizational chart/training program that is in line with this strategic positioning. Prepare financial forecasts to better understand the path to efficient and sustainable operations.
Tocante Alrubos
Arubus NV was founded in 1983 to manage a public transport company, including large buses and coaches. In 2015, two new companies were created under Arubus, Arutram and Aruparking, both of which Arubus owns 100%. Arutram manages and operates Oranjestad’s tram service, which is mainly used by tourists. Aruparking manages Oranjestad’s parking infrastructure and maintains parking management. The Aruban government directs what services Aruba wants to provide to the public through a concession that expires in 2022. Today, Arubus has 50 buses at its disposal, 98 employees in service, and charges Afl. $4.50 per trip.
Touch Frederik Nupol
Frederick Nuboer studied at the University of Applied Sciences Utrecht (Hogeschool Utrecht) between 1985 and 1987. Between 1987 and 1990, he studied Dutch law and notarial law at Radboud University in the Netherlands. Between 1992 and 1997, he studied law and tax law at Leiden University. After graduating in 1997, he became a tax consultant at KPMG Aruba. From 1999 to 2005, he worked as a tax auditor in the tax department. From 2011 to 2017, he was CEO of Insel Air Aruba. From 2008 to 2022, he was Director General of the Auditor General’s Office of Aruba. Since July 2005 to date, he owns his own company, Nuboer Tax Solutions, advising clients on tax matters.
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