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CUC loan with MPLT now up to lawmakers
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Posted on Jul 06 2008
The decision to approve or deny the Commonwealth Utilities Corporation’s request for funding from the Marianas Public Land Trust is now in the hands of the Legislature.
The MPLT board of trustees has suspended talks regarding CUC’s proposal to borrow $4.5 million to pay for power generation projects.
“The decision of the MPLT relative to the CUC proposal … is to put the request on hold until and unless the Legislature approves the loan request of CUC. There are legal issues which need to be resolved before further negotiation can proceed between MPLT and CUC,” said Alvaro Santos, chairman of the MPLT board.
MPLT previously adopted a resolution agreeing to CUC’s loan request. But the resolution was put on the back burner after the potential legal problems were brought up.
Santos said the resolution is “now a moot issue, if not null and void.”
A 2006 executive order signed by Gov. Benigno R. Fitial requires CUC to get the consent of the Legislature before making any loans worth over $500,000.
CUC needs $4.5 million to pay part of its $6-million contract with Aggreko International, which will provide rental generators to Saipan while the power plant is undergoing repair. The contract requires CUC to make a partial payment of $1.5 million before Aggreko will ship the generators. The contract is for one year and includes the generators, lube oil, personnel costs, and maintenance. CUC will provide diesel to the company. The generators will provide additional 15 megawatt to Saipan’s power supply.
CUC is also looking at using a portion of the money to pay for fuel expenses and the utility’s debts to its power plant contractors, Telesource CNMI and Pacific Marine and Industrial Corp.
Because of its financial problems, CUC currently cannot get a loan from outside lending institutions.
