A luxury addiction clinic on the Caribbean island of Curaçao has gone bankrupt at a cost of nearly €1m to the Dutch taxpayer, the Volkskrant reports on Tuesday.

The Jellinek Retreat opened three years ago with a Dutch government subsidy of €600,000 and a further contribution of €250,000 from the Jellinek organisation in the Netherlands, which itself is publicly funded.

Questions are being asked as to whether the subsidy should have been granted, says the Volkskrant. The application from Jellinek gave a much too rosy picture of the market.

In addition, the Jellinek assumed the rich Dutch addicts at whom the clinic was aimed would pay privately for their treatment. When bills were sent to health insurers, they began asking questions about the price and effectiveness of the treatment, says the Volkskrant.

Jellinek Retreat began with 20 places and expected to double the number in three years, charging each patient €25,000. However, average occupancy remained at 12. In the three years the clinic has been open, just 350 addicts have been treated.

Five years ago Dutch MPs were confounded to learn the economic affairs ministry had agreed the €600,000 subsidy. It was hoped the clinic would encourage medical tourism and contribute to the ‘economic and sustainable trade relations with the Dutch Antilles’, of which Curaçao is part.