CPA, Telesource drop lawsuits vs each other

The Commonwealth Ports Authority and Telesource CNMI Inc. have dropped lawsuits they had filed against each other as part of a three-step settlement agreement they signed two months ago.

CPA executive director Carlos Salas reported that both parties are now focusing on closing the multimillion-dollar Tinian airport runway extension project, which had been delayed due to a year of disputes, decisions, appeals, and lawsuits.

CPA and Telesource, the contractor for the project, disagreed over whether final acceptance of the work that had been declared, whether as-built drawings were due, and whether retention must be paid.

“We’re on track. We’re finally able to have mutual understanding. We agree that it does not make sense to prolong the process,” Salas said in an interview.

As part of the settlement, CPA has also released $888,650.16, or half of the retention fund withheld by the departments of Public Works and Finance. In return, Telesource has delivered to CPA the as-built drawings, which show the work accomplished on the project.

The dismissal of the administrative and judicial litigation, and release of the retention and drawings comprise the first phase of the settlement.

The second step started after the first retention payment was made and it involves CPA making the determinations required to complete the closeout of the project.

These determinations include the CPA engineer’s final estimate of the work performed, liquidated damages, Telesource’s pay request and all other pending claims, and payment of the second half of the retention.

Any disputes that may arise from the second phase will be addressed in the third and final step.

On March 27, 2001, CPA and Telesource entered into a contract to construct an 8,600 linear foot asphalt concrete runway, to convert an existing 6,000 linear foot runway into a parallel taxiway, and to construct related crossover, parallel, and partial taxiways at the Tinian airport.

CPA declared substantial completion on Dec. 3, 2003 and the contracting officer deleted all remaining work on the project on April 22, 2004. The disagreements ensued.

At least two other Tinian airport projects—the strengthening of the runway and the improvement of 8th avenue—have been delayed because of the dispute between CPA and Telesource.