THE Department of Finance is asking the House of Representatives to support House Bill 22-45, which will allow the CNMI government to borrow $16.8 million from U.S. Department of Agriculture through its rural development loan program.
The loan will fund road projects on the three main islands.
Authored by Vice Speaker Blas Jonathan Attao, H.B. 22-45 will authorize Finance, in consultation with the Department of Public Works, to enter into a loan agreement through the USDA. This also requires Finance to avail itself of the Grant Anticipation Revenue Vehicle or GARVEE note so that the loan will be payable from revenue remitted to the CNMI government under GARVEE.
The bill likewise requires the CNMI government to pledge a portion of the amount allotted to the Commonwealth by the U.S. Department of Transportation as security for the payment of the USDA loan.
According to H.B. 22-45, the governor or his designee will enter into a memorandum of agreement with the Federal Highway Administration which would, among other things, identify the projects to be financed by the proceeds from the loan.
Among the proposed road projects of the CNMI government are Route 36 or Talofofo Road construction and improvement, Route 33 or Beach Road improvement, Naftan Road construction, and road projects on Rota and Tinian.
In his letter to House Ways and Means Committee Chairman Donald Manglona, Finance Secretary David DLG Atalig said having adequate roads “is a high priority” for the CNMI, adding that they will “improve the safety of our community during the movement of goods, and people.”
Atalig said roads “serve as the foundation upon which the economy is built and are essential for economic growth.”
He said the road projects listed in H.B. 22-45 will also provide employment to CNMI residents, create public/private partnerships and prepare the Commonwealth’s infrastructure for future developments.
Atalig said his office has evaluated the benefits of the loan program including the interest rates, availability of long-term financing, and mitigation of inflationary impacts. These benefits, he said, can be derived from increased economies of scale, and partnership with USDA and the U.S. Department of Transportation.
“After careful consideration, we are [of] the opinion that the financing opportunity and project outlined for the funding offer a wide range of benefits,” the Finance secretary said.
“On behalf of the Department of Finance, we are humbly requesting for your support for the enactment of this legislation,” he added.
Blas Jonathan Attao
