In his talk before members of the Rotary Club of Saipan yesterday, MPLT Board Chairman Alvaro A. Santos said, “We have opened a new Local investment program — diversified local investments — in which we can give loans or even invests…so we can help the economy one way or another other than the annual obligation to the general fund.”
He told Rotarians that the agency had three proposals on its table which it had committed to in principle: $10 million line of credit to CDA for its application to the $13 million grant under the State Small Business Credit Initiative; $1.5 million loan to the Commonwealth Healthcare Corp. for its electronic health record project and $500,000 loan to Arctic Circle Air.
Responding to Variety’s inquiry on how much is MPLT allocating for the said program, Santos replied, “We have not really allocated a fixed amount.”
He also said that the MPLT will make sure that it will not get into greater than what their investment policy statement allows the agency.
But they may look into setting a cap, he said.
During his talk, Santos said the agency committed to $10 million line of credit to the Commonwealth Development Authority as the latter needed a back-up agency with the liquidity and stability to shore up its credentials with the U.S. Treasury.
Variety disclosed last month the MPLT board’s decision to participate as back-up to CDA as well as its decision to give a $500,000 loan to Arctic Circle Air contingent on the CDA’s approval of the Arctic Circle Air proposal.
Santos had earlier explained MPLT’s participation, that it will serve as guarantor to the U.S. Treasury which administers the program that if CDA will not be able to see the program through, then MPLT’s standby line of credit will ensure that the project will proceed as scheduled and it will guarantee whatever kind of losses the project will incur during the five-year window.
During its board meeting last month, the MPLT board approved a $500,000 loan to Arctic for 10 years at 7.5 percent interest.
In approving the loan, MPLT also approved as collateral the business’ aircraft, flight certification, accounts receivables, furniture and fixtures and other capital assets, inventory of parts, and non-perishable items.
Aside from the SSBCI program and the Arctic Circle Air proposal, Santos also shared with the Rotarians the MPLT’s decision to approve in principle $1.5 million in loan to the Commonwealth Healthcare Corp.’s electronic health record project.
Santos said the CHC project will establish a network between clinics on Saipan, Tinian, and Rota that will cut down paperwork and bureaucracy.
The U.S. Treasury Department wants the local government to fork out the capital; however, the central government doesn’t have the capital to cough up so it approached the MPLT.
Santos said the agency did due diligence on the proposal and remains waiting for CHC on who shall be its signatory to the loan agreement.
Santos said the proposal was for a “good purpose.”
“It increases the information technology in the medical field, that will benefit Rota, Tinian, private clinics and CHC as a whole,” he said.
The proposal was seeking for a $1.5 million loan for 18 months at 5 percent interest.
Variety learned that CHC has been using the Resource and Patient Management System of the Indian Health Service for over 16 years now but is in need of funding to upgrade and implement certified Electronic Health Record systems.
Under the federal program, the CHC is qualified for incentives in the amount of $2 million in the first year, $1.5 million in the second year, $1 million in the third year, and $500,000 in the fourth year with a bonus of $200 for every patient discharged between 1,150 and 23,000.
Variety also found out that CHC was awarded by Health Resources and Services Administration a competitive grant of $300,000 a year for three years to extend the use of the RPMS electronic health record by the Tinian and Rota clinics and private health care providers in the islands.
Santos said the MPLT’s investment strategy this fiscal year is to entertain local these investment proposals that will come before us.
He said this is not without due diligence as they will determine the risks involved.
Santos acknowledged that the current economic climate is not conducive to investments.
But the MPLT will look into well calculated risks and determination as to how investment proposals will benefit the community, he said.
