CUC inhibits from stalled sewer project

A much-delayed sewer line construction in southern Saipan seems to remain in limbo as the Commonwealth Utilities Corporation is taking its hands off the financial dilemma that has bogged down the project for nearly a year.

CUC Executive Director Timothy P. Villagomez yesterday said they will not pitch in to help the Commonwealth Ports Authority settle the claims of Pacific Drilling Ltd., the project’s contractor.

He insisted CPA’s request for assistance is outside the memorandum of agreement forged late last year between the two government agencies which provides a 70-30 share of the costs with CUC getting the larger financial obligation.

Ports authority officials have been pressing the utility firm to pay 70 percent of the contractor’s claims, which CPA placed at some $350,000, so that it can resume work on the project.

“That’s unacceptable,” Villagomez told reporters, adding the penalty was a result of the stop-work order and not of the recent accord. “It’s not fair for CUC to be part of the penalty for damages that have been incurred outside of this contract.”

Officials of the two autonomous agencies failed last Tuesday to agree on how to settle the claims which is the only issue left in the funding problems that have been holding back the project since May last year.

Both CUC and CPA have set meetings within the next few days to try to solve the discord so that construction can resume immediately to prevent endangering the lives of the residents in the area.

The new sewer line, costing more than $4 million and only half of it has been completed, runs from the airport to the Agingan Waste Water Treatment Plant benefiting some 1,000 households.

Authorities have warned further delay could pose public health risk as ground water supply in the area is prone to contamination, prompting the legislature to intervene in an attempt to push the project.

Pacific Drilling has an outstanding claims of about $1.9 million from CPA for additional costs incurred to the company due to the work stoppage.

So far, CPA Executive Director Carlos Salas has agreed to pay $352,784, suggesting that the escalation and remobilization costs can be covered under a change order when the project resumes construction.

But the cash-strapped ports authority has no money to immediately pay the contractor, forcing it to seek CUC to bail it out from the financial problem.

Villagomez said there is no way that they can assist because CUC is also experiencing financial shortage, but added “once it is resolved, I will be more than happy to proceed with this project.”

Under a memorandum of agreement reached late last year, CUC will shoulder 70.6 percent of the project cost amounting to $3.5 million while the remaining 30 percent will be charged to the operating and capital improvement project costs of Saipan International Airport.