Saipan Mayor David M. Apatang supports a bill authorizing the Commonwealth Ports Authority to separate independent master concessions for Saipan, Tinian, and Rota.
Senate Bill 19-48, authored by Senate President Victor Hocog (Ind-Rota), proposes to authorize CPA to grant separate master concession agreements for the airports and seaports of each island. This would allow each port of entry on all three islands to have its own separate concession.
Hocog’s bill amends Public Law 4-60 that was enacted in 1985. It states that “although previous master concession agreement and current successive master concession agreement provides that DFS [Duty Free Saipan] has exclusive concession privileges at all points of entries in the CNMI…DFS Saipan has only operated stores at the Saipan International Airport.”
“DFS Saipan has not exercised its exclusive privileges at the Tinian and Rota international airports partially due to the low retail demand, low passenger traffic, and unstable air service at each airport, respectively,” it added.
The passage of the bill opens the door to possible investors that want to set up duty-free stores on the other two islands.
“We think such legislative finding is observational and typical,” Apatang said.
“Although the idea of authorizing the CPA to make opportunities available to more than one company to operate a concession at the port of Rota and Tinian independently—any company that is unrelated to the master concessionaire currently operating at the port in Saipan—we believe it will not immediately translate into a tangible undertaking,” he added.
Apatang explained that factors such as operating cost, shipping cost, consumer preferences, and number of travelers will always influence any business decision whether to operate a concession on Rota and Tinian.
“A for-profit company’s sole purpose is to profit and stay in business for as long as the business climate is favorable to its long-term survival. For any concessionaire at the ports of Rota and Tinian to remain in operation once they start, the CPA and government must partner with them to assure they stay in business,” he said.
CPA board member Barrie Toves said that they already have an interested investor that wants to do a master concession on Tinian; however, PL 4-60 prohibits splitting the master concession.
“We are monitoring the bill so we could sit down and negotiate,” Toves told reporters after a recent board meeting.
Toves noted that Mega Stars was the interested investor for a master concession on Tinian and that the CPA board supports the passage of the bill.