Power, ferry, and Rota park rank high in CEDS plan of 34 projects

The final draft of the Comprehensive Economic Development Strategic (CEDS) plan ranked high the needed improvements on the power generation on Saipan, an inter-island super ferry worth some $40 million, and the Pinatang Beach Park on Rota among 34 projects estimated to cost nearly $500 million.

The CEDS Commission ranked the projects according to their ability to spur economic development.

The economic plan lists priority projects from 2009 to 2014 using factors such as job creation, private investment and public benefit, as well as cites challenges and opportunities for the CNMI.

“Efforts have been made to identify the potential for new and promising industries, as well as to find creative new sources of funding, including the use of public-private partnerships, to achieve the CNMI’s development goals,” said the CEDS Commission in a report sent to Gov. Benigno R. Fitial.

Other priority projects include a public housing in Garapan, a $2 million revitalization of the Garapan commercial district, relocation of Garapan Elementary School, establishment of a Rota farmers’ cooperative, an instrument landing system for Tinian worth $8 million, and the rehabilitation of the Tinian seaport.

Besides the loss of the garment industry and the downturn in tourism since 2005, the CEDS Commission also cited other economic challenges, including another 50-cent hike in the minimum wage in May and the uncertainties over federalization.

Federalization, according to the CEDS Commission, could lead to an almost total loss of the Russian and Chinese tourists, a reduction in the number of foreign investors who will qualify to live and work in the CNMI.

Labor shortage is also expected from the phasing out of the CNMI’s foreign worker program over a five-year transition period.

“Higher costs of processing foreign labor visas once U.S. regulations take effect for various types if visas,” the CEDS Commission said in its final draft plan.

One bright spot on the horizon is the planned move of Marines relocating from Okinawa to Guam, although this will undoubtedly bring both positive and negative challenges.

The CEDS study identified several infrastructure developments that would help encourage the military’s use of Tinian for training, such as road and harbor improvements, the construction of a sanitary landfill and sewage treatment facilities.

“However, it is uncertain at this time whether the military would help share in the substantial costs of the construction of these infrastructure improvements,” the commission said.

It also said that Saipan, Tinian, and Rota will see additional tourists with the anticipate growth of the Guam population by the military. “Any investments in new attractions and other destination enhancements for the islands would help promote more tourism,” it added.

But an anticipated downside to the growth of the military base on Guam will be a regional labor shortage.

The CEDS Commission said there have already been a significant number of local CNMI families that have moved to Guam to pursue higher paying job opportunities. It said more foreign workers are also expected to move to Guam.

The likely effect of this will be high turnover costs and an upward pressure on wages and benefits to compete with Guam employers, the commission said. For this reason, regional workforce planning and training by organizations like the Workforce Investment Agency will become a critical element of future economic recovery.

The CEDS Commission is co-chaired by Lynn Knight and Commerce Secretary Michael J. Ada. It hired as consultant the Virginia-based Management Analysis Inc.