Cash-tight CPA hikes fees

The Commonwealth Ports Authority will increase fees on fuel flowage, and use of incinerator, implement parking fee as well as seek the immediate return of some 58,000 sq. m. of public land to the agency as additional sources of revenue.

These would provide the ports authority some $1.2 million in income for one year, said Carlos H. Salas, executive director. Such measures are to be carried out by the financially troubled ports authority in a move to save its operation and pay for its financial obligations.

Furthermore, the ports authority will encourage employees who are eligible to retire to avail of the early retirement program to reduce contribution on the Retirement Fund, impose more restrictions on the use of cellular phones and government vehicle.

Instead of reducing its workforce, the ports authority board cut down the working hours of its employees from 80 to 72 hours per pay period starting April 1, 1999 which would give CPA some $550,000 in savings for one year.

It has also approved the increase in airport fees and charges effective March 1, 2000 which means that passenger facility charge will be 39 percent higher from $5.79 to $8.00; and a 65 percent hike in landing fee from $.85 to $1.40.

According to Rex I. Palacios, financial consultant, the delay in the raising of airport fees would give the ports authority enough time to amend Airport Rules and Regulations as well as give the Legislature the chance to make good its promise that it will help provide funds so that CPA can meet debt service.

The board also gave the go signal to raise seaport rates, charges and fees beginning July 1, 1999. Five months from now, the wharfage fee shall increase by $3.25 per revenue ton while port entry fee, dockage rates, bunker fee and home port fee shall increase by 30 percent.

However, if the Legislature would be able to provided the needed funding for the ports authority to meet its airport bond debt service obligations and operating expenses before March 2000, the board will no longer raise the fees.

The planned raising of airport fees was met with strong criticism from various sectors in government and the private sector. In a meeting with airlines, the ports authority was urged to reduce its bloated bureaucracy.

After examining all other options, the ports authority finally decided to cut down the working hours to save at least 10 percent in expenditures on salaries and wages. “It is a painful decision which would hurt us all. But we have to make tough decisions to weather the crisis that has hit us,” Salas said.

The raising of airport fees was part of the condition imposed by the rating agencies — Fitch IBCA and Standard & Poor’s — before these can provide any ratings to the $53 million bond.

Failure to acquire a bond rating before March 1999, one year before the bond flotation was carried out, would mean an increase in interest rate from 6.25 percent o 6.70 percent, costing CPA close to $100,000 in additional payment each year.