CPA, governor discuss impact of port fees hike

Gov. Pedro P. Tenorio yesterday told the ports authority to carefully weigh proposals seeking to increase landing fees as a way of raising funds to meet its multi-million bond obligation in fear the move would further reduce flights to CNMI.

Officials of the Commonwealth Ports Authority yesterday met with the governor to brief him on the worsening financial situation confronting the agency, and apparently to lobby support for the plan to hike landing fees this year and seaport rates and charges in year 2000 amid opposition from the tourism office.

The Marianas Visitors Authority had openly opposed the planned increase on the grounds that the proposal would further thin tourist arrivals, which have been dropping at double-digit levels since last year. The downtrend in the tourism industry have forced airlines flying to Saipan to cut back air service because of declining passenger haul.

“I told them to review it thoroughly before they make any final decision,” Tenorio said, as he acknowledged CPA’s commitment to settle its multi-million bond obligation.

“Of course, they have to meet their obligation (but) at the same time we really have to look into whether the increase is really needed at this time…I hope they would take everything into consideration what would be the impact if they increase it,” he said.

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 pay its debts amounting to $53 million.

The CPA board will decide on Friday whether to adopt the recommendation which many port authority officials said is the “viable option” at this time. Prior to the meeting with the governor, board members were divided on the planned fee hikes because of its adverse impact on government efforts to lure more airlines into 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.