SMA: Debt CPA demanded payment for unsupported by detail

Star Marianas Air, Inc. claims that the Commonwealth Ports Authority has demanded payment of over $1 million to be paid within 30 days without details to support the large sum.

Star Marianas chair Robert Christian, in response to Rota Mayor Aubry Hocog’s plea for resolve between the airline and CPA, sympathizes with the island of Rota but states that unfortunately, a resolution is beyond SMA’s control.

“I share your disappointment that this dispute has continued for so long. I recall flying to Rota a few months ago and giving you a detailed briefing about the issues we were having with the CPA, so your concerns are certainly knowledge-based. The lack of movement toward resolution is beyond the control of Star Marianas. The CPA has steadfastly refused to provide Star Marianas with the details of their billings. The rate books presented to Star Marianas and all other airlines for fiscal years 2022, 2023, and 2024 state that the content of those documents, in its introduction section, is not binding on the airlines or the CPA and yet go on to detail how they might move forward with billing the airlines once certain amendments to CNMI Regulation 40-10.1 are approved by the CPA’s board. Even Regulation 40-10.1 provides a table that purports to be for illustrative purposes only,” he said.

Christian states that CPA, rather than discuss long-standing issues, went ahead and demanded a payment of over $1 million to be paid in 30 days without details to support the sum demanded.

“Nonetheless, the new CPA administration decided that rather than discuss the issues that we presented to you (and them), a demand for payment of a large amount of money was necessary. Once again, the amounts in the demand letter the CPA presented to Star Marianas were just total amounts they claim are owed to them, unsupported by any detail, and seemed to be similar to the amounts that were very generally presented in the rate book which merely lumped total CPA expenses into terminal and airfield categories,” he said.

“It seems we, together with all members of the community, can understand that being presented with a demand for payment of a large amount of money that has no supporting rationale as to why it is being assessed is an alarming and deeply disturbing action to take by a CPA with appointed management and given dictatorial authority with monopolistic power,” Christian added.

Christian notes that Star Marianas, like the people of Rota, has endured typhoons, a pandemic, and inflation. Christian notes that Star Marianas has also had to endure alleged attempts by the government to cause harm to its business by subsidizing competitors and offering them discount for the airport fees.

“The CPA’s motivation remains baffling to any outside observer. Throughout our 16-plus years serving the CNMI, the CPA has yet to provide a detailed breakdown of the actual fees it is presenting for payment. A recent Superior Court ruling confirmed the CPA’s failure to provide a budget of its expenses, required annually, for any of the first 13 years of our contractual relationship, a contract the CPA developed and offered to Star to sign,” he said.

Christian, in closing, said Star Marianas remains absolute in its resolve to pay whatever the federal guidelines require or, for that matter, whatever the previous Airport Use Agreement would have allowed and is willing to negotiate the amounts with CPA.

“Star Marianas is even willing to negotiate the amounts the CPA presents in its breakdown of its expenses. However, Star Marianas cannot negotiate the CPA’s absolute responsibility to provide Star Marianas with the details of what is being assessed. The CPA, for whatever reasons it has, is either unwilling or unable, or perhaps both, to provide a detailed financial document that justifies its fees, and until such time as the CPA finds a solution to their responsibility to do so, Rota and all of the communities that require air services will be faced with uncertain consequences,” Christian said.