‘Glowing words’ for DFS at CPA hearing

The 435 written testimonies submitted to the Commonwealth Ports Authority during Thursday night’s public hearing were all in favor of a successor master agreement between DFS and the airport, according to Barrie C. Toves, CPA’s ad-hoc committee chairman.

The ad-hoc committee will soon convene to review the testimonies, he said.

From there they will debate whether they will recommend that CPA should enter talks with DFS on a new master concession agreement for all Commonwealth ports of entry, Toves said.

The committee is looking to have a decision by the first week of November, he said.

Earlier, consultants Ricondo & Associates presented CPA with three options: a successor master agreement, a duty-free retail concession agreement, or a duty-free retail concession agreement-prepaid.

Toves said the committee has a “bit of an issue” in regards to Public Law 4-60 that sets up the parameters for these options, particularly on the law’s definition of a master concession.

“The current [MCA] is not part of the alternative in terms of the statute, the way it was written. A master concession as defined by the statute is that the concessionaire will have to operate duty-free shops in all ports of entry. That means all six ports of entry [in the CNMI],” he said.

How the board came up with the “watered down” master concession agreement is something that the committee is now reviewing, he said.

“The way I’m reading [the MCA], it is in violation of the statute,” he said, but added that the committee is looking into the legal opinion that allowed this at that time.

According to Ricondo, the current MCA is no longer exclusive to each and every port, as it no longer applies to Rota and Tinian. Ricondo called a concession program at these locations “impractical.”

They based this on historical passenger numbers and the zero direct flights to international destinations from these airports.

However, they said the economy and infrastructure of Tinian and Rota airports may improve in the future.

On seaports, Ricondo also pointed to low passenger numbers as one reason a concessionaire would unlikely view programs there as profitable.

“It is very likely that these stores would lose money,” the report stated.
Toves, who is from Rota, echoed Ricondo’s recommendations.

“The number of flights does not warrant for a shop the size of duty-free or something to that effect. It’s going to be a losing proposition for any concessionaire to open shop,” he said.

Also, there are no facilities at the seaport on Rota or on Tinian to satisfy the requirements of the statute, according to Toves.

He described public comments as a “major factor” for him as a member of the board moving forward.

CPA confirmed with port managers on Rota and Tinian that no comments on the matter have been submitted from these islands.

Nevertheless, there is another “angle” that can be taken in satisfying the statute, Toves said.

“The majority of the population is here on Saipan so that gives way for the board to be a little more considerate that it does benefit the Commonwealth as a whole because the majority is here,” he said.

Toves could not confirm if CPA has received testimony from a firm outside the CNMI expressing interest as a potential bidder.

Last Thursday’s public hearing was packed, with many of the over 200 participants left standing to crowd the corners, back, and entrance of the room.

No one at the hearing spoke against DFS continuing its MCA with CPA.

Rather, comments from private citizens, leaders in government and the business community, spoke in glowing terms of the vital role DFS has played in the island’s economy and community.