Palacios: DPL needs to look at more reasonable terms
Gov. Arnold I. Palacios expresses that one of the possible reasons Mañagaha Island has not had a stable concessionaire operator in a long while is because the agreement proposed by Department of Public Lands needs to be looked over and made reasonable.
In a statement from Palacios last Tuesday, he shared his views on the recent termination of the master concession operator agreement for Mañagaha between Mariana Global Inc. and DPL.
According to Saipan Tribune archives, DPL terminated its agreement with MGI for failure to pay its over $800,000 rental fee.
Palacios shared that while the agreement predates his administration, when he saw it, he immediately knew it was going to be a problem.
Palacios expressed that in order to have a stable concessionaire operating Mañagaha, this agreement needs to be made reasonable.
“I don’t think any company in their right mind would sign that. That is the No. 1 issue. Are you kidding me? You’re going to sign an $800,000 contract annually plus 9% of your gross? It is important for DPL to take a look at what is reasonable so that we can have lasting operation out there that one, provides safety and enjoyment; and two keeps the place clean for our locals and visitors. The contract could have been thought of differently. I even shared my opinion on it. But this contract was signed predating me so when I saw the contract, I could see that this was going to be an issue and this is probably why the company is having problems now. They wanted to monopolize every activity going on out there and that didn’t sit well with the operators and a lot of the people,” he said.
However, Palacios said at the end of the day, the agreement has to be complied with.
“Obviously, that is an issue that as you all well know, they were having all kinds of problems, and they were having a real controversy with marine operators. But DPL is also obligated to ensure that whatever agreement is signed, has to be complied with. They obviously didn’t pay their rental fee and it’s DPL’s obligation as an agency and representative of the community to make sure that whatever is agreed to is complied with,” he said.
As for Mañagaha operations, Palacios said DPL will be on top of it.
“DPL is going to step in, they were already operating when the previous operator left so they already have a crew ready to step in. [As for the] lifeguard issue, if we have to hire a lifeguard, then we will hire lifeguards until we can geta company to operate it,” he said.
Earlier this month, DPL issued a notice of termination ending the master concession operator agreement for Mañagaha with MGI.
According to the termination letter issued to MGI CEO YoungHee Yoon, DPL acting secretary Richard Villagomez said the termination is a result of MGI’s failure to cure violations pursuant to the concessionaire agreement.
“The termination of the above-subject agreement has resulted from concessionaire’s failure to cure the violations within thirty (30) days’ notice as noted in DPL’s July 31, 2024 Notice of Violation letter (NOV). Concessionaire’s deadline to cure the stated violations was extended to Sept. 30, 2024, as requested by the letter from concessionaire’s counsel dated Aug. 28, 2024.”
Saipan Tribune learned from DPL’s compliance division director Greg Deleon Guerrero that the violations include non-payment of rental fees.
Because MGI did not cure the violations cited, DPL has terminated the agreement and has ordered MGI to vacate Mañagaha by Oct. 26.
“In accordance with section 18C of the agreement, you must vacate the exclusive concession area on Mañagaha within 15 days. DPL will enter into and upon the ECA take possessions of all of its property and improvements and evict the Concessionaire without the liability of trespass,” they said in the letter.
According to Deleon Guerrero, come Oct. 26, DPL will assume operations of Mañagaha’s exclusive concession area while MGI appeals the termination.
Gov. Arnold I. Palacios
