PASSENGER HEAD TAX WAIVER Tinian Shipping renews plea

Hong Kong Entertainment (Overseas) Ltd. board chairman Michael Kwan and officials of Tinian Shipping & Transportation Inc. have renewed their request with the Commonwealth Ports Authority board to reduce the payment of passenger head tax from $6 to $1 for two years.

In a meeting with CPA officials, Hong Kong Entertainment and Tinian Shipping officials said the two-year break will allow them to carry out a marketing campaign and charter flights to boost visitor arrivals on Tinian Dynasty Hotel & Casino. As a result of the downturn on the island’s economy, Tinian Shipping and the casino hotel have been having difficulty surviving, they said.

While CPA would like to help Hong Kong Entertainment and Tinian Shipping, the ports authority also has to take into account its own financial obligations, said its executive director, Carlos H. Salas. The seaport division has a $33 million debt.

“We are keeping an open mind. There is no question that we both have financial obligations to meet,” said Salas.

Desperate to help its subsidiary, Tinian Shipping, Kwan sent a letter to CPA five months ago and proposed two options: 1) reduction in passenger head tax to $1 and 2) charge the head tax only to paying passengers for two years. At that time, the passenger head tax was only $3.75.

Since CPA needs the revenue badly, the board decided that the management would just carry out its own collection of passenger head tax, which increased to $6 last June.

For the ports authority to collect the fees, Tinian Shipping must sign an amendment to an agreement earlier signed by both parties in connection with the use of the harbor.

At that time, Tinian ferry had an average of some 22,000 passengers a month. Under the new rate, this would translate to a loss of revenue amounting to $132,000 a month.

“We don’t want to put them out of business but we have to do this on a fair and reasonable way since we have a facility to run and personnel to pay,” said Salas.

Next week the CPA board and management will meet with the Tinian Legislative Delegation, which earlier lobbied for Tinian Shipping’s request.

“We want to know what they can do to help us with this problem. Of course, we want to help but we want to make sure that we will not sink when we do that,” said Board Chairman Roman S. Palacios. He noted that CPA wants to gain as much revenue because it wants to restore the 80 hours work per pay period.

CPA Vice Chairman Fidel M. Manglona said he is opposed to the proposal of Tinian Shipping, noting the ports authority’s obligation to meet its debt service payment. “Unless somebody comes up with subsidies, then we may agree to their proposal to reduce the fee,” he said.

Hong Kong Entertainment spent over $12 million to acquire two high speed ferries — M/V Tinian Express and M/V Saipan — to service tourists coming from Saipan to Tinian.

Operation of the two vessels was temporarily suspended for almost two months by the federal court due to non-payment of the company’s debt to Debis Financial Services.