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OIA approves Fitial’s $3.8M request
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Posted on Dec 12 2008
The U.S. government has granted the Commonwealth’s request to reprogram federal funds for engine repairs at the Commonwealth Utilities Corp.’s main power plant.
The $3.8 million fund comes on top of the $6.4 million that the U.S. Office of Insular Affairs had previously given CUC.
“We needed these funds from the federal government. They saw the merits of our request, and we appreciate their support,” press secretary Charles P. Reyes Jr. said yesterday.
The reprogramming approval follows Gov. Benigno R. Fitial’s recent letter to OIA director Nikolao Pula. In the letter, Fitial details the plans and processes CUC will undergo to fix the engines and why more funding is necessary. In September Pula had written Fitial asking for a more detailed plan on the use of funds.
“To clarify, CUC’s request for additional $3.8 million to fund continuing rehabilitation efforts for Saipan Power Plant 1 engines is prompted by CUC’s inability to fund major repairs of PP1 engines from its own limited working capital resources,” Fitial wrote.
Fitial notes that CUC did enter into a contract with DCM to repair six of the eight engines at Power Plant 1, but that on July 10, 2008, the contract was terminated because the engines were not repaired. Only $410,000 was paid out of the $5.4 million contract at the time of the termination, he said.
“As stated earlier, in that CUC’s working capital resources were insufficient to have funded for any major repairs, CUC would have required financial assistance to pay for the balance of the contract if [the] contractor’s performance was unsatisfactory,” Fitial wrote.
CUC executive director Antonio Muña said the $3.8 million, along with leftover money, would total $5.4 million, enough for the necessary engines to be repaired.
