THE Commonwealth central government has been making regular payments for the $15 million it borrowed from the Marianas Public Land Trust in 2019 for the “extraordinary expenses” incurred during Super Typhoon Yutu recovery, according to official documents obtained by Variety.
The Commonwealth Healthcare Corp., for its part, is also paying its $3 million line of credit provided by MPLT in 2012 at an interest rate of 5%.
Initially, CHCC paid the monthly interest only, but in 2018, it started making monthly payments of $53,000 for the principal and interest.
It still owes MPLT $1,561,041.03.
MPLT’s loan prevented the closure of some of CHCC’s services and allowed the hospital to pay its doctors and nurses.
As for the central government’s $15 million loan, it still has an outstanding balance of $12,675,319.21.
The loan, which has an interest rate of 7.5%, was made possible by Public Law 21-3 as amended by P.L. 21-6. The loan payments will come from the future interest due to the CNMI government.
Instead of MPLT distributing the interest to the government’s general fund on an annual basis, it will remain in MPLT’s investment portfolio as additional capital infusion that will generate more interest for the land trust.
P.L. 21-3 states that the MPLT loan “shall be used to pay emergency disaster relief and recovery expenses incurred by the Commonwealth as a result of the devastation caused by Super Typhoon Yutu including reimbursement of such expenses that have been paid by the Commonwealth.”
The term of the loan is a minimum of five years, starting fiscal year 2019, or until the loan is fully satisfied.
Other loans
Aside from the central government and CHCC, there are other government agencies and corporations that secured loans from MPLT and have already paid them:
• In 2012, MPLT provided a $328,655 loan at 5% interest to CHCC to fund its electronic health record project. The loan has already been paid off.
• The $3.5 million loan at 7% interest that the Commonwealth Utilities Corp. obtained from MPLT to address the rolling blackouts in 2008 has also been paid off. This loan, authorized by P.L. 16-7, helped CUC acquire emergency power generation from Aggreko.
• The $3.5 million loan at 7% interest that MPLT provided the Public School System to pay its power bills in 2011 has also been paid off. This loan, which was authorized by P.L. 17‐7, prevented the disconnection of the school system’s power supply.
• The $5 million loan at 7% interest that the CNMI government obtained from MPLT to address the federal court’s stipulated order in 2014 has also been paid off. Authorized by P.L. 18‐71, the loan prevented the CNMI government from defaulting on a federal court judgement and helped CUC fund its capital improvement projects. “If the Commonwealth does not meet this obligation, Commonwealth Utilities Corporation will be at risk of being placed under receivership,” P.L. 18-71 stated.
• The $1.3 million loan at 5% interest that the Tinian municipal government owed MPLT in 2016 has also been paid off. Authorized by Tinian Delegation Resolution 19-6, the loan provided financial assistance to the Tinian municipality for the exploratory drilling services performed by the U.S. Geological Survey.
According to MPLT’s 2019 annual report, all these loans are part of the land trust’s diversified local investments as provided for in its investment policy statement.
MPLT is a constitutional trust whose primary purpose is to manage the net revenues from the leasing of CNMI public lands.
