Thinking out loud

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Posted on Aug 07 2000

From my veranda I can see Managaha Island. As I watch the sun slip over the rim of the ocean, my thoughts wander over the contract the Department of Public Land and Tasi Tours signed ten years ago. As I recall, Tasi paid $4,100,000 for a five year lease. In addition, they share in a $5.00 landing fee collected per tourist who arrives to the island for fun and sun. This fee totals almost $9,000,000!

With this $5.00 fee Tasi buys equipment to operate the island, pays for maintenance and other “miscellaneous” expenses. This money should be accounted as additional income to Tasi for paying for expenses what ordinarily should be a lessee’s. How it is used and how much is turned over to DPL to this date remains a mystery. It totals in the millions. Oh, well, I’m just thinking out loud.

During the five years Tasi somehow received an additional three years at no extra cost making the lease now eight years. Five became eight with business as usual at the expense of the people of the CNMI.

In August 1998, after the eight years expired, Public Land requested proposals from new concessionaires. Two companies each offered about $10,000,000 for a five year lease. For some reason all bids were discarded and Tasi was allowed to stay as a hold over tenant.
From September 1998, until today they are paying an average of $9,000 per month rent and still share in the $5.00 landing fee.

Thinking out loud, I did some rough calculations. Had Public Land accepted one of the offers made in August, 1998, it would have received $2,000,000 lease rental per year.
However Tasi is paying only $108,000 per year. Thus for the past two years since 1998, Public Land will have received only $216,000 total.
Had their offer been accepted, the new concessionaires would have paid $4,000,000. A whooping loss of $3,784,000 for DPL. Someone is milking the cow and the people of the CNMI are the losers. What a sweetheart deal. No new bid proposals are being considered. Wow! What a deal. But then I am only thinking out loud.
Another crazy thought passed through my mind.
The CPA has a ruling that all commercial boats departing from any land controlled by the CPA must pay a departure fee of $6.00 per passenger which was published in the Commonwealth Register October 1999.

At the seaplane ramp and at Echo Dock, several boats are tied up there. Checking what fees are being charged as departure fees, I learned that these boat owners are exempt for unknown reasons from paying any fee. Even the Tinian Express is forced to pay $3.50 per passenger departure fee.

My rough calculations estimate at least 100 people depart from the two sites daily. 100 X 30 days in a month X $6.00 equals $18,000 of lost revenue per month or $216,000 per year. This is lost revenue to the CPA? How can this happen? Now the CPA has decided to allow Tasi Tours to pay only $2.25 per departure fee from the CPA port.

Recently the CPA began charging the community a parking fee of $1.00 per hour at the airport to make up for insufficient revenue. Soon the CPA will also be charging parking fees at the commercial port. Yet they do not collect the correct departure fees from Tasi Tours and various boat owners. Instead they prefer to collect this money from the people of the CNMI, while letting their friends get away without paying little or no departure fee. Hey, what are friends for anyway. Excuse me, I am only thinking out loud.

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