‘CPA will do the right thing for Rota’

“I have every confidence…the Commonwealth Ports Authority will do the right thing for the people of Rota.”

This was the sentiment expressed by Sen. Paul Manglona (Ind-Rota) in a statement to Saipan Tribune as he addressed CPA’s last board meeting.

During last week’s board meeting, the CPA board was supposed to act on the Rota Terminal and Transfer Co. Inc. lease agreement.

RTT was cited for incompliance back in April and was supposed to correct violations by May 26, but failed to do so.

However, following a heated argument between board members, CPA tabled the discussion and cancelled the special board meeting altogether.

In a statement from Manglona, who has been advocating for the termination of RTT’s lease, he said he believes that by the next CPA board meeting, board members should be well aware of how RTT’s monopoly stevedoring contract is not good for the residents of Rota and CPA itself.

“I have communicated to CPA over the years about how RTT’s exorbitant charges and lack of sufficient port equipment are causing great harm and sufferings to businesses and residents of our island. Also, about 28 years ago, CPA amended RTT’s contract so that $50,000 annual lease payment and 5% or the gross revenue payment were cancelled. Yet, the residents continue to be charged exorbitantly. I have every confidence that on their next board meeting, the board members, after evaluating all the past contract performance history of RTT, they will do the right thing for the people of Rota,” he said.

In a previous letter Manglona sent to CPA executive director Leo Tudela, he said the egregious failures of RTT must not continue and CPA has no other option but to terminate the lease.

“RTT’s actions and inactions leave no doubt that it can comply with CPA’s demands on or before May 26, 2024. RTT’s egregious failures to provide the required services efficiently and fully comply with the lease agreement is a horrible travesty ultimately resulting in costly expenditures by the shipping companies, businesses, and, of course, the high commodity prices passed on to the Rota consumers. Moreover, not only do I have no confidence that RTT will comply with CPA’s demands to cure all the violations but absolutely no trust that RTT will provide the required efficient services and impose only reasonable charges at the West Harbor. I look forward to CPA’s decision on the termination of the RT&T lease agreement on the Rota West Harbor,” he said.

RTT and CPA entered into a lease agreement in 1996, allowing the local stevedoring company exclusive use of the seaport for shipping and stevedoring operation.

The annual rental fee was $50,000 per year plus 5% of the company’s gross revenue.

In 2009, the lease agreement was amended, replacing the annual rental fee plus 5% of gross revenues with a monthly rent of 50 cents per revenue ton transacted.

Last April 26, the CPA board gave RTT 30 days to correct the following lease contract violations: failure to remove damaged equipment, failure to maintain operable crane, and failure to maintain a CNMI business license.

RTT’s deadline was on May 26, 2024 and they have yet to come into compliance.

During CPA’s last board meeting, Rota board member Steve Mesngnon said RTT president, former senator Victor B. Hocog, sent the CPA board a written request for an extension of the notice of default and asked that the board review the request.

CPA board chair Jose C. Ayuyu, for his part, stated if RTT is not financially sound, they should be honest to come to the board and say, they can no longer do the job.

“The company really needs to be honest to itself. You know, if they can do that job or if they cannot do the job. Everyone on Rota depends on ship deliveries. If shippers cannot bring in food from Saipan through the seaport, that is unacceptable,” he said.

If you don’t have the money and resources, be a gentleman enough to say, ‘I’m sorry I’m not going to accept the contract to run the port because I don’t have the resources,’” Ayuyu added.

CPA has yet to set a new special board meeting on the matter.

Paul A. Manglona