CUC eyes audit on project costs
Relieved over settlement of dispute on the stalled sewer project in southern Saipan, the Commonwealth Utilities Corporation now wants to conduct financial audit on the initial contract before resuming its much-delayed construction.
There is also no schedule yet as to when completion of the new sewer line system will start again after its contractor, Pacific Drilling Ltd., has agreed on the $750,000 settlement on the additional costs incurred after the project was halted in May last year.
CUC is expected to review the entire project based on its specifications before the government-owned utility firm takes over its construction, according to Executive Director Timothy P. Villagomez.
“What I would like to do for this project is to have somebody audit the project to make sure that we comply and that we don’t just keep on working on this. We have to go back and review all the documentation, check all of the construction work that has been done,” he told in an interview last Friday
“Basically (we need to) have a financial audit review on this thing to make sure that we are in compliance with the contract’s terms and conditions.”
Villagomez, however, expressed satisfaction over resolution of the squabble with the Commonwealth Ports Authority, underscoring the project’s significance in safeguarding public health.
The sewer pipeline, which will run from Saipan International Airport to Agingan Waste Water Treatment Plant, will benefit some 1,000 households whose groundwater supply is prone to contamination without the system in place.
“I agree that it’s a very good project,” Villagomez explained. “However, let this be a lesson that we have to do things the right way. This has caused the government a lot of money.”
He maintained CUC is not bailing out the ports authority from its obligations to Pacific Drilling, saying the $400,000 which they have promised to shoulder under the settlement agreement has been reached with strings attached.
The utilities corporation may seek assistance from CPA — whose coffers have been affected badly by the cutdown in flight service to the CNMI — for other projects that need the agency’s financial support to return the favor, according to Villagomez.
“It is not to say that we bailed out CPA or CPA is free of being under obligation. The bottomline is that we avoided litigation and we must thank this contractor in not getting us into any major problems,” he added.
CUC is expected to meet with CPA and Pacific Drilling soon to discuss completion of the project, whose total cost has now reached nearly $5 million due to the additional payment to the contractor for mobilization fees and other expenses brought about by the “stop-work order” last year.
“I have to be very careful of this construction to make sure that it is in compliance with all of the CUC’s specifications,” Villagomez said.
Under a memorandum of agreement reached late last year aimed to boost funding, 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.
