CPA opposes rate hike plan for airport, seaport charges

The Commonwealth Ports Authority will strongly oppose rate hike proposals for airport and seaport charges, saying the idea will not only have a grave impact on the economy but will also conflict with existing agency regulations.

Ports authority comptroller Derek Sasamoto told Saipan Tribune yesterday that House Bill 17-199 is a bad idea to enforce in times of economic hardship.

Rep. Ray Yumul (Rep-Saipan) prefiled H.B. 17-199 on Friday, proposing to impose fees up to $25 on passengers landing at CNMI airports and seaports. The objective is to generate more than $3 million for the central government so it could restore timely payroll and 80 work hours for government employees.

The bill seeks to authorize CPA to impose and collect a $6.50 charge on each airline passenger, a $5 document charge for those with cargo, and $25 on consignees for “consolidated consignments” of cargo. Interest for late payments is also proposed, among others.

Sasamoto said this measure conflicts with the mandates of the law that created CPA as an autonomous agency. He said all activities in the ports authority is supposed to generate funds only for CPA and not for the central government.

“[Increasing rates] on behalf of the government is a conflict in our regulation. It’s not going to affect in any way our financial statements because none of those monies will go or be used by CPA but by the central government,” said Sasamoto.

He said the agency is now preparing its formal response to the proposal.

The measure, he added, may also be tackled with the Federal Aviation Administration at its next regular teleconference.

Yumul’s bill comes at the time when the local economy and visitor arrivals are both declining.

At a recent CPA board meeting, CPA executive director Edward Deleon Guerrero and board chair Jose Lifoifoi separately said that no increases are being eyed for any ports and airport charges.

Despite the agency’s financial problems, they said that CPA chose instead to implement cost-cutting measures by conserving energy costs and freezing all hiring and travels just so it could maintain the 80-hour work schedule of its 198 employees. The agency has also enforced aggressive collection efforts to generate funds.

Sasamoto is confident in the management and the board’s decision to maintain the status quo.

“Any additional tax imposed on airlines will affect the travel industry because for sure these airlines will pass on the cost to the passengers and what we’re trying to do here in CPA is attract more people to come here. It is all about demand and raising the tax especially at this time will possibly lower the demand,” he said.

Saipan Tribune learned that CPA last increased seaport rates and charges in February 2009 while airport fees were adjusted in 2008.

Since the Japan earthquake and subsequent tsunami on March 11, airlines have cancelled flights, affecting tourist arrivals and, for CPA, a revenue loss of 40 percent.