Saipan Tribune

Thursday, June 20, 2013

Thursday, February 28, 2013

Request to reduce, eliminate Tinian airport's PFC nixed

The Commonwealth Ports Authority has denied the request of the Tinian municipality to reduce or eliminate altogether the passenger facility charge being collected from travelers to and from the island.

In a letter to Tinian Mayor Ramon M. Dela Cruz, CPA executive director Edward Deleon Guerrero said the collection of passenger facility charges, or PFC, is a federal program created by law that the CPA cannot reduce or eliminate. It is approved by the Federal Aviation Administration and is imposed on all users of CPA-owned airports, he added.

“If we were to somehow eliminate the PFCs, then we would lose our main source of matching funds for federal grants, which has many negative implications. It must also be remembered that PFCs collected at the Tinian International Airport are paying off past projects on Tinian that were funded through debt service, for example,” explained Deleon Guerrero.

Additionally, PFC revenues have been and can be used to supplement the operational budget of the Tinian airport as it does not generate enough income to cover all expenses at the airport, he added.

CPA charges passengers traveling to and from Tinian $4.50 each, which translates to $9 per person per round trip or about $45,000 in annual income for the ports authority.

The Tinian mayor had requested that this charge be reduced or eliminated, describing them as counter-productive to efforts to bring tourists to the islands and a stumbling block to economic development opportunities.

If commuter passengers are going to be charged, then the funds should be used to upgrade the terminals, Dela Cruz said.

But according to Deleon Guerrero, FAA has already provided funding for the design of the terminal project and the agency is now waiting for additional funding for the construction portion.

According to him, PFC revenues will be used as a matching fund for the airport improvement program grant that will be used to renovate the commuter terminal.

Any federally funded work at the Tinian airport will also use PFC revenues to secure the matching portion of the grant requirements, which in the end benefits the island, he added.

Deleon Guerrero described the Tinian terminal renovation as a “high priority” project for both CPA and Capital Improvement Project office.

Deleon Guerrero explained that funding for the project only became available in 2010 when the Tinian delegation allocated additional monies to complete the terminal. He said that during the design phase, structural issues were discovered that needed to be addressed.

“CPA separated the bids to ensure that work on the arrival terminal proceeds while the structural assessment and retrofitting design work continued on the departure terminal. Unfortunately, as times are hard and everyone is seeking employment, the latest award was protested. CPA is now working with CIP to re-advertise the Phase 1 project in January. If bids are received and tabulated without delay, then we will push for award by February 2013,” he explained.

Flaws discovered in the project design prompted CPA to sue the designer, Leo A. Daly Company. Settlement negotiations are ongoing.

Until this lawsuit is settled, Deleon Guerrero said that renovation of the departure terminal cannot proceed as there are structural issues and CPA will not be held liable for any injuries or damage that may occur.

Deleon Guerrero flew to the U.S. yesterday to pursue the settlement negotiation with Leo Daly.

“We are well aware of the amount of money the Tinian delegation, CPA, and the FAA has spent on the Tinian airport and we are working as quickly as possible to get this airport in a condition where it can accommodate direct flights from abroad,” he said.