CPA settles lawsuit with Telesource

The Commonwealth Ports Authority has signed a settlement agreement with Telesource CNMI Inc., ending about a year of litigation in connection with the multimillion-dollar Tinian airport runway extension project.

In the settlement, both parties agreed to withdraw the lawsuits they had filed against each other and proceed with closing the project.

Telesource signed the settlement first, followed by CPA on Friday.

Also pursuant to the settlement, CPA agreed to the releasing half of Telesource’s $1.77-million retention fund.

The other half will be released when engineers complete their review of the work done on the runway and determine that everything was done according to specifications laid out on the contract.

“At the end, once all this is resolved and CPA is satisfied with the final determination, we will release the remaining half of the retention —less any deductions that are necessary,” said CPA executive director Carlos Salas.

The retention fund is currently withheld by the Public Works and Finance departments. It represents 10 percent of the contract amount for the airport improvement project, which covered the construction of an 8,600-linear foot asphalt concrete runway, the conversion of the 6,000-linear foot runway into a parallel taxiway, and the construction of related crossover, parallel and partial taxiways at the Tinian airport.

Besides CPA’s refusal to release the retained fund to Telesource, the port authority’s solicitation of services for a “complete-as-built survey” of the airport, which was estimated to cost some $186,000, prompted the company to file the lawsuit.

CPA, however, accused Telesource of breaching their contract by failing to maintain as-built drawings, filing a counterclaim that seeks monetary damages against the contractor. The CPA claimed that Telesource failed to turn over to it the as-built drawings as required by the contract.

According to the settlement, CPA would no longer demand such drawings.

In an interview, Salas expressed belief that a settlement agreement was mutually beneficial for CPA and Telesource.

He noted that two other Tinian airport projects—the strengthening of the runway and the improvement of 8th avenue—have been delayed because of the dispute between CPA and Telesource.

“Now we can proceed and have those projects advertised for bid as soon as possible,” he said.