One surefire way to help the Commonwealth Utilities Corp. solve its cash-flow problems is for the central government to pay its arrears with the struggling utilities firm, according to Senate President Paul A. Manglona (Ind-Rota).
In a phone interview with Saipan Tribune, Manglona said the latest emergency declaration at CUC is justified but can actually be solved in the long run if government agencies and departments pay their billings in a timely manner.
“All they need is payment from the departments and agencies. If they get the utility billings paid I think they can get out of the state of emergency. It's a cash flow issue,” he said.
In his July 16 emergency declaration, acting governor Eloy S. Inos stated that CUC's cash crisis is primarily caused by the $12 million owed it by the Public School System, Commonwealth Healthcare Corp., and residential consumers. CUC also owes its vendors $2.6 million. Inos also cited the dearth of U.S. workers with technical training, existing renewable energy crisis, and lack of a CUC board of directors.
Rep. Ramon A. Tebuteb (R-Saipan) said he agrees with the acting governor's decision to extend the state of emergency at CUC for another 30 days.
“I haven't really looked at it but basically its an extension because of the lack of manpower at CUC and that there's not enough cash flow going into that agency to meet its obligation. At the same time you have the [U.S. Environmental Protection Agency] and its deadlines. For me that's the priority and the emergency declaration is within that scope,” he said.
Rep. Ramon S. Basa (Cov-Saipan), meanwhile, said it only makes sense to extend the emergency declaration at CUC in view of the recent decreases in power and water and wastewater prices.
He said the Executive Branch appears to be doing a good job at CUC and he has no qualms of having the declaration extended for another month.
Basa, however, will have an issue if the emergency declaration becomes a familiar theme at the embattled utilities firm and said he hopes that a CUC board of directors would soon be put in place.
Manglona echoed Basa's concerns about the lack of a CUC board of directors.
“The lack of a board is something we've raised for the past years. The law requires that CUC should have a board of directors. Until now they [Executive Brancg] have put that aside and it seems they have no interest in doing that. They choose not to do it. There's no willingness to set up a board of directors,” he said.
Manglona also urged the Marianas Public Land Trust to release the $7 million loan to the Commonwealth Healthcare Corp. because part of the funds being borrowed will be used to pay off the latter's outstanding arrears at CUC.
“That's why in our meeting last week with CUC and the [Office of the Attorney General], one of the questions asked Attorney General Ed Buckingham was what was holding out the MPLT loan to CHC because on that loan is a couple of million dollars that could pay for their arrears,” he said.
CUC was first placed under emergency status on Aug. 1, 2008, and that was lifted only on March 28, 2011.
The latest emergency declaration for CUC was announced last May 18 and it was renewed a month later, making Inos' latest declaration the second renewal for the utilities firm.