CUC, CPA in settlement talks

Top officials of the Commonwealth Utilities Corporation and the Commonwealth Ports Authority will continue negotiations on the overdue sewer line project on Saipan after they failed to agree the other day on a settlement of the contractor’s monetary claims.

CUC Chairman Juan S. Dela Cruz said they will have to discuss the issue regarding the $350,000 debt owed by the ports authority to Pacific Drilling Ltd. when the project was suspended last year due to insufficient funds.

Legislators have been trying to mediate in the standoff in apparent frustration over unnecessary delay on the new sewer line system amid warnings from authorities against possible health risks on residents in the area.

The project, costing more than $4 million and only half of it has been completed, runs from the airport to the Agingan Waste Water Treatment Plant benefiting some 1,000 households.

“We want to help if CPA agrees to pay the $350,000 to the contractor and CUC will take over to complete the project,” Dela Cruz said after meeting with CPA officials last Tuesday.

Although they have yet to reach an agreement, utility officials will review documents on the contractor’s claim and decide by this week whether they will get their share of the debt, according to the CUC chair.

The government-owned utility corporation has previously stood firm in its decision not to assist CPA in resolving its dispute with the contractor, saying it’s beyond the scope of their earlier agreement.

Under a memorandum of agreement reached late last year, CUC will shoulder 70.6 percent of the project cost amounting to $3.5 million while the remaining 30 percent will be charged to the operating and capital improvement project costs of Saipan International Airport.

But the cash-strapped ports authority, which has been trying to resume work on the project, has claimed CUC must also shoulder 70 percent of the Pacific Drilling’s claims once they take over its construction.

Earlier this year, the project contractor has demanded some $1.9 million from CPA for additional costs incurred to the company due to the work stoppage.

So far, CPA Executive Director Carlos Salas has agreed to pay $352,784, suggesting that the escalation and remobilization costs can be covered under a change order when the project resumes construction.

Both government agencies are under pressure to complete the sewer line because further delay may result to increasing bacterial contamination in ground water that will affect the safety and health of residents in the area.