CPA debates FTZ land needs

The board of directors of the Commonwealth Ports Authority has passed a resolution expressing concern over certain provisions of the proposed legislation establishing the Free Trade Zone in the CNMI.

In seeking amendments to the proposed measure, the board would like to limit to 20 hectares the initial size of the CPA airport land on Saipan dedicated as Free Trade Zone. Any additional airport property needed for the Free Trade Zone may be added on by agreement between CPA and the FTZ Authority, provided that all of the initial 20 hectares are already being leased to FTZ industries.

Under HB 11-389, some 60 hectares of land shall be made available in the vicinity of Saipan International Airport to be leased at reasonable rates.

During Friday’s board meeting, chairman Roman S. Palacios asked why the ports authority was not asked to comment on the proposed measure which would have great implications on the operation of CPA. “We want to make it clear that we are not against the Free Trade Zone. We just want the legislature to consider our concerns,” said Palacios.

Whenever the FTZ Authority wishes to designate other Free Trade Zone elsewhere on Saipan, Rota and Tinian and CPA property is involved, the board will make a decision on the size and location of the property being requested for designation by the FTZ Authority.

The board wants to make it clear that where an FTZ is located on property owned by the ports authority, CPA rules and regulations shall apply and prevail if they conflict with any FTZ statute, rules and regulations.

“All CPA lands that are being designated for the Free Trade Zone are unimproved property and CPA has no obligation to construct or install infrastructures needed by the FTZ industries within the zone,” the board said.

FTZ Authority and CPA must be allowed to negotiate and fair and reasonable rental. If this is not acceptable, then the ports authority is asking that the minimum lease should be not less than 50 percent of the current rental being assessed to CPA’s other ground tenants.

Any improvement, structure, building or infrastructure to be built on CPA property designated as a Free Trade Zone shall be subject to the prior review and written approval of CPA.

A saving clause must be included in the provision of HB 11-389 so that if the proposed measure is in conflict with CPA’s present or future grant agreements, revenue bond indenture covenants or CPA’s other contractual obligations and commitments shall not be compromised.

Earlier, CPA legal counsel Jose Dela Cruz warned board members that the provision on rental would adversely affect CPA since the Federal Aviation Administration require airport authorities to maintain a fee and rental structure that will make the airport as self-sustaining as possible.

Dela Cruz reminded board members that the ports authority was established as an autonomous, self-sustaining government corporation to run and operate airports and seaports.