Governor not likely to OK hiked port fees

Gov. Pedro P. Tenorio has dropped strong hints that he would unlikely support plans of the financially-troubled Commonwealth Ports Authority to increase landing fees to be able to pay part of the multi-million bonds due next year in fear that such move would further reduce flights to the Northern Marianas.

In an interview Thursday, the governor cautioned the ports authority against increasing landing fees at this time when airlines companies servicing the CNMI are cutting back flights because of declining passenger haul.

“We have to look at the issue very carefully because it’s no use for us to increase landing fees and continue to reduce the number of (flights) coming over,” Tenorio explained.

The governor acknowledged the commitment of CPA to pay the bonds worth $53 million beginning next year, but added, “…I hope the board of directors will look into it very carefully and assess the advantage.”

Two financial consultants commissioned by CPA to analyze the airport and seaport operations have separately recommended that the agency raise its fees to be able to meet its obligations – a plan that has also divided the board.

The CPA board has yet to decide whether to push through with the fee hikes or not, but many are lukewarm to the proposal because it would defeat government efforts to attract more airlines into flying to the Northern Marianas.

The Ricondo & Associates projected a 4.5 percent growth in the aviation division but is not enough to cover the $20 million airport revenue bonds. This means CPA must raise its landing fee by 68 percent to $1.40 per 1,000 gross landing rate from 85 cents – a rate that has remained unchanged for the last 10 years.

A study conducted on the seaport by Booz Allen & Hamilton underscored the need to hike fees by 30 percent beginning next year and additional 30 percent by 2000 and 2002 to be able to meet its $33 million obligation.

CPA is also worried that the impending pullout of the half-a-billion-dollar garment industry with the implementation of the General Agreement on Tariffs and Trade in the year 2003 would substantially reduce seaport revenues since more than 50 percent of the container haul belong to garment manufacturers.

Administration sources, however, said CPA’s plan would not likely get the governor’s nod, citing his commitment not to implement any form of revenue-generating measures in order not to further strain the pockets of the private sector already hurting from the economic slump. They said Tenorio took exception of the poker license fees as a compromise to the lifting of the cap on the number of poker machines that would be allowed to operate on Saipan.

“This is not the right time. The increase should have been done while the economy was booming and not at this time when the government can hardly attract airlines to come over,” one administration source said.