CPA defends action to halt sewer project
The Commonwealth Ports Authority is still hoping that the much-delayed $4.9 million sewer line project would push through despite the refusal of the Commonwealth Utilities Corp. to shoulder the additional $175,262 imposed by the contractor.
CUC executive director Timothy P. Villagomez maintains that the utilities firm is not responsible for any damages that may have resulted from the actions of the ports authority when it stopped the project on May 8, 1998.
Villagomez claimed that under the signed Memorandum of Agreement, CUC shall provide funds and technical assistance for system compatibility. He added that the utilities firm has no intention of accommodating the additional cost.
But CPA executive director Carlos H. Salas believes that the contractor’s claim must be paid since it is reasonable and related to the suspension of the project last year.
Under the MOA, the utilities firm has agreed to shoulder 70.6 percent of the project cost amounting to $3.5 million. The remaining $1.4 million would be charged to the operating and capital improvement costs of Saipan International Airport.
The project was suspended due to lack of funds and to determine whether the ports authority has diverted airport revenue to complete the project beyond its area of jurisdiction. Based on the plan, the project will run from Saipan International Airport to the Agingan Waste Water Treatment Plant. It will benefit almost 1,000 households.
Pacific Drilling Ltd. has indicated that it will not resume work unless all claims in connection with the project have been settled. In fact, due to the delay, PDL has sought termination of the contract claiming it is continuously incurring equipment standby costs to date.
CPA’s construction manager Efrain F. Camacho has recommended that the ports authority accept the additional claim of $175,262 from the original $2 million demand due to the delay in resuming work on the project.
Camacho said expressed concern that further delay in restarting it due to negotiations for the contractor’s claims may result in additional costs which PDL may further seek.
CUC shall pay $21,247.12 every 20th day of each month over a period of 30 years at an annual interest rate of 6.25 percent.
