CNMI aims for more matching funds

Posted on Feb 15 1999

Apparently undaunted by proposed cut in federal funding, the CNMI government is looking at releasing within the next few weeks another batch of Capital Improvement Projects aimed to rev up the economy amid deepening recession on the island.

The next set to get funding boost will likely involve school building plans and other improvement projects of the Public School System which is soon to receive $15.6 million loan from a California-based financing firm, Rep. Karl T. Reyes said.

These projects will amount close to $32 million with an equivalent funds from the federal government made available under the CIP program, according to the chair of the House Ways and Means Committee in an interview Friday.

Reyes authored the appropriation bill passed last Thursday by the House of Representatives to set in motion a massive infrastructure development plan by the government that will tap millions of dollars in U.S. financial assistance.

Some $23 million in CIP-funded projects, including the proposed closure of Puerto Rico dumpsite and the new prison facility, will begin construction as soon as the money is released by Washington.

This represents the first batch of projects under a recently drafted master plan outlining 50 priority projects on Saipan, Tinian and Rota estimated to cost $154 million over a seven-year period.

Reyes said the government is still trying to source local funds to match the federal grants before they can mobilize all these money which will help spur the economy at a time when the tourism industry is suffering from the fallout of the prolonged Asian crisis.

“What we need to do now is to identify similar funds,” the representative explained. “If we can come up with big amount as high as $60 million, then we can really use large part of the federal funds.”

The island government has come under fire in the last three years for failure to set aside funding for CIP as provided in the matching requirement agreement — a move that has prompted White House to slash 51 percent from its grants for the next fiscal year.

Although this will take effect in year 2000, Reyes said the government must fight off the proposal because this will alter the whole master plan if it gets approval of the U.S. Congress

“For the next two years, we will use the funds made available since 1996, but we will have to seriously look at the (new) proposal,” he explained.

Island leaders have pinned hopes on the $154 million funds guaranteed in the Covenant to revitalize the economy, but the money has been left idle due to the inability of the CNMI to meet the stringent matching requirement.

Washington has committed to allot $11 million each year beginning in 1996 until 2002 to the local government provided it allocates a dollar-for-dollar matching from its own coffers.

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