The money is supposed to pay for generators that the Commonwealth Utilities Corp. will rent from the U.K.-based Aggreko Intl. Projects Ltd.
According to Rep. Ray N. Yumul, R-Saipan, “What the administration and CUC are trying to do is to take out a loan of at least $4 million from MPLT. The loan is proposed to be paid in two to three years with an annual interest of at least 7.5 percent.”
Yumul said he is not opposed to a contract that will solve the worsening power crisis on Saipan, but he wants the deal done right to avoid potential litigation involving losing bidders.
Under the contract, Aggreko will allow CUC to use the company’s 10-megawatt generators at $336,000 a month.
CUC said it is short of 10 megawatts to meet Saipan’s demand for electricity.
MPLT, the investment arm of the government for revenues generated from leasing public lands, is prohibited by the CNMI Constitution from lending money to other government entities, particularly those with financial troubles like CUC, Yumul said.
“Article 11 of the CNMI Constitution states that MPLT should make carefully prudent investments,” he said, adding that CUC’s shaky financial status does not make it a prudent investment at this time.
He added that the CNMI Constitution specifies that MPLT cannot lend another government entity to finance its operating expenses.
“There’s no exemption,” the lawmaker said.
When CUC was reorganized on May 8, 2006, Yumul said a language was inserted in its bylaws that require the concurrence of the Legislature before the corporation can make any financial dealings such as the proposed multi-million-dollar loan from MPLT.
Yumul said his staff was not allowed to videotape MPLT’s board meeting held last week.
The Office of the Public Auditor released a report on Wednesday noting a 52 percent rise in MPLT’s total operating revenues which amounted to $8.4 million.
OPA also reported that MPLT’s total assets grew by 12 percent to $77 million during fiscal year 2007.
