CPA pledges dialog on port fees hike

The Commonwealth Ports Authority has assured the International Air Transport Association that it will consult various airlines and give them adequate notices before implementing the new airport rates.

In a letter to Lim Liang Poh, assistant director/user charges, the ports authority said it will continue to work closely with the airlines to promote the Northern Marianas as a tourist destination.

“It is well over 10 years since CPA last raised its rates and we truly wish increasing our fees is not necessary. Unfortunately, our dilemma is now having a smaller enplanement with higher financial obligations,” said Carlos H. Salas, executive director.

The ports authority will carry out a 64 percent increase in landing rates and 38 percent hike in departure facility charge (per passenger) in order to generate the required-additional revenue.

Many sectors in the CNMI have criticized the planned rate increase saying it is very untimely as the island’s tourism economy has been on a downturn since the Asian financial crisis began 16 moths ago. But the ports authority has no choice but to push through with the rate hike to be able to meet debt service for the $53 million revenue bond.

Gov. Pedro P. Tenorio has asked the CPA officials to study the matter first before making any decision and assured them of his support if the rate increase cannot be avoided.

The raising of fees was based on the recommendation made by the airport consultant Ricondo & Associates so that the ports authority can pay for its financial obligations.

This was also a condition imposed by the two bond rating agencies –Fitch IBCA and Standard and Poor’s — before giving any rating to the $53 million revenue bonds.

With the continues decline in visitor arrivals and reduction in flights of airlines to the Northern Marianas from various Asian destinations, the airport study projects only a 4.5 percent growth in the aviation division of CPA.

According to Salas, the bond rating will boost investors’ confidence and prove the CPA’s financial capability to repay its debt. At the most, CPA is expecting to get a Triple B rating which will help maintain the current interest rate of 6.25 for the airport bond and 6.40 for the seaport bond.

The ports authority will consult Northwest and Continental Airlines this week as well as members of the Legislature on the planned rate increase.