Gov. Benigno R. Fitial issued yesterday the following statement to the people of the Commonwealth of the Northern Mariana Islands:
It greatly saddens me when those who do not understand my actions accuse me of wrongdoing, which has contributed to the current dispute regarding CUC's Power Plant 1. By diverting our attention from addressing the serious issues that face our people, these detractors turn your attention away from their years of inaction while in office, which has contributed to the problems we face today.
“My administration's policy has always been that the actions of the Executive Branch are open for examination, and if errors are made, then people must be held accountable. There are numerous agencies that constantly scrutinize the actions of the Executive Branch; and they provide a credible, independent review. However, the current proceedings seem to be based on politics and the upcoming election, and directly undermine the administration's efforts to address the serious problems facing our community.
“The problems that face our community are undoubtedly the most serious since we became a Commonwealth. The problems we face today began many years ago, but have only gotten worse with the departure of the garment industry and the federal takeover of immigration.
“These two occurrences have significantly undermined government revenues and exposed the inadequacies in our healthcare system, retirement fund, and public utilities. Due to the shortage of government revenues, we can no longer subsidize these inadequate structures and we are now forced to make significant changes to each of them in order to correct the longstanding problems of inefficiency, inadequate revenues, and improper service. The initiation of change in longstanding government programs does not come easy because people have vested interests, and it requires accommodation and compromise.
“A prime example of this can be recalled when CUC was plagued with months of scheduled rolling blackouts. As a result, many families suffered from damage to their electric appliances due to these blackouts. The immediate solution then was to engage Aggreko to provide a temporary source of stable and reliable power. It can also be recalled that both the Legislature and PUC opposed the administration's request for assistance from Aggreko. In the end, CUC was able to make the necessary repairs to their diesel engines while Aggreko provided reliable and stable power to the ratepayers on Saipan, and ultimately, we ended the rolling blackouts.
“However, as we have seen with the utility system blackouts, inadequacy of healthcare, and insolvency of the retirement system, sitting by idly and hoping that the problem will go away is no longer acceptable. We have to make fundamental changes to these systems if we are to balance our economy and develop a plan for the future. I have invited the leadership of the Legislature to discuss, during two separate Leadership Summits, the problems besieging our people today. Unfortunately, it has only been the House leadership who has continued the discussion on finding possible solutions to our problems. The Senate and a few chosen elected individuals have chosen instead to use the solutions to our problems as a negative political tool in order to cover up their years of inaction and lack of leadership to address our most serious of issues.
“Currently, we are entering the most difficult stage of change, and we need the assistance and support of the community to establish a government with long-term viability. As a community, we need to resolve four major issues within the next 90 days: restructuring of the Retirement Fund; restructuring of the public healthcare system; lowering of utility costs; and expansion of our revenue generating industries. All of these issues are complex in and of itself, and it will require all of us to make compromises; but we do not have the luxury of doing nothing, so let's talk about what we are doing in these four areas.
“Probably the most difficult task is the restructuring of the retirement system as it directly affects many of us financially. We need to devise a retirement system that provides long-term benefits that can be afforded by the government. There is no one simple solution; and it will take some time to resolve. I think we are on the right track with the extension of Social Security and providing for the withdrawal of funds. Resolution of the long-term debt of current retiree benefits will be difficult, and will require give and take to balance revenues and costs and this is the next step. The government is committed to resolution of this problem, and I am hopeful that the initial steps of extension of federal programs and voluntary withdrawal will allow us to reduce the outstanding liabilities and identify an acceptable compromise. This is probably our biggest challenge because of the costs involved and the direct personal effect this program has on families.
“The second biggest challenge that we must address within the next 90 days is the Commonwealth's healthcare system. The current system is not working as we have an expensive structure that provides inadequate care. Providing adequate healthcare in the Commonwealth is particularly challenged by our small population; providing care on three islands; and the high cost of meeting United States standards of care. In order to provide adequate care will require a complete restructuring of the current system. Currently, we are having the entire healthcare system analyzed in order to present an independent review of operations and recommendations for improvement. This study will identify our current shortcomings and present a template for restructuring and is scheduled to be completed within 45 days. I'm certain that this study will call for significant changes in our healthcare system, and as a community, we have to evaluate these recommendations and agree to a plan that meets our healthcare needs within our financial constraints.
“The third significant challenge that we must address within the next 90 days is that of the continuing high cost of utilities. The high cost of power is directly affecting every family on the island and is undermining our economy. Every single day, I hear stories of the impact of utility costs on families and businesses. Time and time again, people say that the monthly utility cost is one of the highest household expenses rivaling those of housing and food. In every instance where a long-term business closes, they cite the high cost of power as one of the principal factors. At the root of our problem is the reliance on antiquated diesel for electric generation, and we must break this model. I have made it clear that I am not satisfied with our progress to date in this area, as families are demanding an end to the ever-increasing costs of utilities. In order to escape this structure, we have to look at alternative energy sources such as solar, geothermal, nuclear, and improved diesel engines.
“It is this last issue, improved diesel engines, that has ignited significant controversy. As has been reported, the Commonwealth was approached concerning the possibility of construction of a ship rebuilding facility. This ship rebuilding project would facilitate the United States military buildup in Guam by presenting a local site for repair of vessels and bring considerable high-paying jobs to our economy. However, in discussions with promoters, they identified that the only feasible site was the location of the current CUC Power Plant in Lower Base. In order to attract this development, consideration had to be given for relocation of the existing power plant.
“In order to examine the feasibility of the relocation of this plant, a proposal was made for the construction of a new facility. In this examination, our objective was to reduce the cost of electric utility generation from its current level of approximately $0.38 cents to $0.18 cents per kilowatt hour through the use of more efficient diesel engines. If the proposal cannot achieve this objective, it is not acceptable. In order to facilitate this examination, a proposed model was presented to the Commonwealth with the understanding that it was subject to our evaluation and review. We will be conducting this analysis, and if it achieves our $0.18 per kilowatt hour goal, I will wholeheartedly endorse it and recommend its implementation; if not, then we must continue our examination of alternatives. The proposal for the construction and financing of a new power plant is not a simple task and requires the commitment of significant resources in the development of a proposal and is not undertaken lightly. I am grateful to the current developers who have undertaken an independent assessment, and are willing to invest in our community, and I welcome their proposal. Once the associated analysis is completed, we can move on from this point; however, in the meantime, we are still moving forward with implementation of 10 megawatts of new solar power and continued exploration of geothermal.
“The final area that will require significant change within the next 90 days is the expansion of our revenue generating industry. Tourism has brought to our islands hundreds of thousands of tourists and with them have come much needed monies spent on our islands. With the decline of the garment industry, the importance of our tourism industry has increased. The Japanese tsunami and change in the Asian economy has made even more important the development of new tourist markets in China, Russia, and Korea; however, our lack of air service and hotel accommodations has hampered expansion of these markets. We cannot wait for others to solve this problem, so we have been holding direct discussions with investors to initiate new direct airline service from China to the Commonwealth in order to increase the number of tourists to our islands. We are hopeful that within the next sixty days we will be able to establish additional air carrier service that will increase tourism by at least 30 percent over the previous year with the ultimate goal of doubling tourism in 2014, which will provide an overall lift to the economy. Additionally, as tourism increases we need an expansion of the number of available quality hotel rooms, and we are in direct discussions with investors for the renovation and expansion of at least three hotel complexes and expansion of retailing in 2013. I find these developments to be the most beneficial, as it will mean new construction, investment, and long-term employment for the people.
“I want to beg your patience and ask you to please forgive the shortcomings of those who do not understand my motivations or my actions. I have always acted in what I feel is the best interest of the people and consistent within the authority of the Office of the Governor. All of the actions of the administration are open for full examination by multiple independent agencies including the Office of Public Auditor, the United States Department of Interior, and the United States Office of Inspector General. These agencies are specifically structured to present a professional independent review of all our actions. If errors are made, then people must be held accountable. However, I do not see any benefit of supporting or engaging in a politically driven investigation right before an important election that will divide our community and distract us from focusing on trying to solve the critical issues of our Retirement Fund; healthcare system; utility costs; and the economy. These are the pressing issues that the administration and the Legislature need to focus on so as to resolve the longstanding problems that face our people.” (Office of the Governor)
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