$100M annual economic benefit eyed for CNMI

The CNMI stands to generate over $100 million in annual economic benefit if the business proposal of Allegiance Capital Corp. pushes through as scheduled, according to a company representative.

In a recent presentation to the Commonwealth Ports Authority board, Kenneth Mahmood said the proposed business, dubbed the Saipan Dry Dock and Repair Facilities project, will cost an estimated total of $100 million to $150 million to build.

He said this would bring the CNMI $100 million in annual benefits that would include revenues from port leases, public land leases, business, and import taxes.

It will also provide a vocational training center, with 40 percent reserved for local construction workers, Mahmood said.

CPA board chair Jose Lifoifoi said the board needs to call on the company again to further discuss the project.

It was earlier reported that a 25-year lease is being drafted between the CPA and Allegiance.

Based on its proposal, up to 900 jobs will be created that will provide above-minimum wage to workers.

The project, a partnership between Allegiance Capital Corp. and Saipan Shipyard LLC, will involve constructing a dry dock ship repair facility at the north and south seaplane ramps in Lower Base, extending south to the Echo pier.

They said this project will be built to Department of Defense standards and will be operated by a first class shipyard management company.

Saipan Tribune learned that the proposed shipyard will contain two graving docks of up to 900 feet in length, a fuel depot, and several repair, fabrication, and administrative facilities located around it.

Its primary market will be the U.S. Navy but it would also serve other customers like U.S. cruise ship vessels, commercial cargo ships, barge companies and local ship owners.

According to a 2008 Government Accounting Office report, the U.S. Navy needs to develop and implement a plan to ensure that voyage repairs are available to ships operating near Guam when needed.

Allegiance Capital Corp. admitted that the military buildup in Guam was the primary reason why they selected Saipan as the location of its business.

There are five major areas that will be affected by the proposed investment at Lower Base. These include the lower seaplane ramps, Echo dock, former CUC and DPW properties, DPW repair shop property, and the CUC power plant property.

The company said CPA will not lose any of its existing income from current lessees since the existing lease holders will continue to use their current leased space until construction needs require them to move.

The company said it is willing pay half of the monthly base lease rate of each lessee while initial environmental and engineering studies confirm the feasibility of the site and permitting is granted to allow construction.