Admin terminates $9.9M landfill contract

Citing high costs, the Fitial administration has terminated a five-year multi-million Marpi landfill contract effective this month.

The contract, worth $9.9 million, was signed during the Babauta administration.

Greg Apa, president of Pacific Drilling-Saipan Waste Management, disclosed in an interview yesterday that he received the termination notice Tuesday, March 7.

He said his team would begin moving out their equipment yesterday.

“We’re moving the equipment outside. As far as I understand, the Department of Public Works will be running the landfill tomorrow,” said Apa.

He said DPW “does not have any equipment lined up at this time.”

When reached, press secretary Charles Reyes Jr. said that termination of the contract was not a surprise at all because “it is an expensive contract.”

“The cost of that contract is expensive. The amount we are paying far exceeds the cost of delivering the service. We are very interested in cutting costs,” Reyes said.

He said the administration intends to re-bid and get better rates from other contractors.

“They [government] have alternatives in mind. This contract has gone for years, and it has been expensive. The main reason [for the termination] is the costs,” said Reyes.

Reyes said, though, that the administration believes that the contractor would not abandon the landfill site.

He said the contract calls for “a transition period.”

“There’s going to be a transition. They [contractor] are still doing it,” he said.

Reyes further said that terminating the contract is allowed in the contract.

“They [government] exercised a provision in the contract that allows them to terminate and re-bid,” said Reyes.

He said doing it this time would mean huge savings for the government.

“It will result in substantial savings to the CNMI government. …We will put it up for bid, get other contractors involved, get some competition and reap savings,” he said.

The 2003 contract calls for a $1.9 million a year payment to the contractor.

Apa said the government cited no reason for termination, but he agrees that it is allowed under section 13 of the contract.

He said this provides for a “termination for the convenience of the CNMI.”

“The contract allows the government to do that. They don’t have to give a reason why they terminated the contract,” he said.

Apa said the five-year contract was signed on Feb. 12, 2003.

“We just completed the third year of operation. …Other than getting the contract terminated like this, it’s been good. We’ve gotten enough praise from the U.S. Environmental Protection Agency Region 9 representatives,” said Apa.

He cited reports that, based on EPA findings, the CNMI landfill “is the best in the region.”

Meantime, Apa said that the government has been in arrears for months.

He said the company last received a payment from the government in January this year for October 2005.