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CPA weighs Tinian Shipping plea for tax cut
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Posted on May 28 1999
Commonwealth Ports Authority Executive Director Carlos H. Salas yesterday assured Hong Kong Entertainment (Overseas) Ltd., board chairman Michael Kwan that CPA will review a request to lower passenger fees to assist one of its subsidiaries — the financially beleaguered Tinian Shipping.
The Seaport Facilities Committee was tasked to review the financial records of Tinian Shipping so that it can make the necessary recommendations to the board. Salas said Tinian Dynasty will be notified within two weeks on the board’s decision.
Tinian Shipping has asked a reduction of the passenger head tax from $3.75 to $1 for the company staff for two years. Another option which Kwan has proposed is for the ports authority to charge the $3.75 head tax only to paying passengers for two years.
Hong Kong Entertainment spent over $12 million when it acquired the two high speed ferries — M/V Tinian Express and M/V Saipan — to service tourists coming from Saipan to Tinian.
Unfortunately, the low tourist arrivals and reduction in international flight coupled with Asia’s economic crisis, have pushed the company into a financial distress since its operation in May 1998. Every month, Tinian Shipping incurs a net loss of over $300,000.
While they are willing to pay the head tax, Kwan said the regional crisis has greatly greatly affected the expected revenue from the ferry, hotel and casino. He added that despite marketing efforts, tourist arrivals to the island-municipality of Tinian remain very low.
“As you are aware, our financial situation is so critical that we have missed our mortgage payments for the ferries,” said Kwan.
Debis Financial Services Inc., the company which financed the acquisition of the two vessels, has filed a lawsuit before a federal court for alleged non-payment of a $7.6 million loan.
Kwan said he has managed to make an out of court settlement to prevent the seizure of the two ferries which are vital to the service of Tinian and Saipan especially for Tinian residents who have considered the vessels as their main transportation system in going out of the island.
