The Commonwealth Ports Authority board of directors has adopted a resolution that authorizes CPA to seek financing in the form of loans or revenue bonds in an amount not to exceed $30 million to rehabilitate the runway of the Francisco S. Ada/Saipan International Airport.
During last Thursday’s board meeting, CPA board member Roman T. Tudela said the resolution is an effort to improve the airport’s runway.
“We need to get this approved,” he said.
Four other board members—Thomas P. Villagomez, Peter P. Reyes, Kimberlyn King-Hinds, and Barrie C. Toves—voted to adopt the resolution.
The project involves “corrective work” at the Saipan International Airport runway. The resolution states that CPA’s contractor, GPPC Inc., did “defective work” on the runway, hence the need to correct it.
The case between CPA and GPPC is presently in litigation.
The CPA directors agreed that corrective work is, in view of CPA management and board in consultation with the Federal Aviation Administration, necessary for the safe future operation of the runway.
The money will be used for the reconstruction, repair, and renovation of the Saipan International Airport runway corrective work under the project.
CPA will issue bonds payable from certain gross revenues derived from the airport revenue in amounts sufficient to pay the principal of and interest of the bonds to finance the project.
CPA determines that the reconstruction of the Saipan airport runway “due to the un-workmanlike construction by its current contractor is necessary to efficiently operate and maintain the runway.”
CPA identifies that immediate and remedial corrective work must be done to repair the existing runway.
CPA recognizes that due to the poor construction of the runway, there is a high potential for future degradation beyond ordinary wear and tear of the runway, which may pose significant risks to airlines, passengers, customers, employees, and guests.
In addition to or in the alternative to the issuance of the bonds, the resolution states that the appropriate officers may borrow or obtain a bank loan with a financial institution for a portion of or in the total amount of $30 million.
Last May, GPPC filed another lawsuit against CPA that seeks payment of at least $5 million in damages for allegedly imposing an illegal penalty on the company despite substantial completion of the project—constructing a new Aircraft Rescue and Firefighting training facility at the Francisco S. Ada/Saipan International Airport.
In its first lawsuit, GPPC accused CPA of causing the company to incur $39 million in damages over the Saipan airport runway project. CPA filed a counterclaim against GPPC and a third-party complaint against an insurance company.
GPPC then moved to dismiss CPA’s counterclaims.
In October 2017, Superior Court Presiding Judge Roberto C. Naraja denied GPPC’s motion to dismiss CPA counterclaims.
In the same order, Naraja also denied GPPC Inc.’s motion to dismiss CPA’s third-party complaint against a Maryland insurance company that provided a performance bond for GPPC.