THE Commonwealth Utilities Corp.’s debt payments to the Commonwealth Development Authority would strictly be used for capital improvement projects, according to a CDA official.
“The money that we will receive from CUC, if everything goes well and if the repayment agreement is followed, will all go back to the revolving fund. It will not go for loan programs because it is strictly for CIPs,” CDA Executive Director Maria Lourdes S. Ada said.
According to Ada, the loan restructuring deal between CDA and CUC is not yet over because it still needs the concurrence of the Senate and Gov. Juan N. Babauta.
CUC owes CDA $106 million, but under the proposed settlement agreement, this would be reduced to around $60 million.
Ada expressed hope that the Senate would approve the proposed repayment agreement.
“The House has already approved it. It’s now going to the Senate. Once the Senate has approved the legislation, it would go to the governor for his signature,” Ada said.
If the governors approves it, a memorandum of agreement will be signed by CUC and CDA.
CDA is pleased that CUC is cooperating to resolve the issue, Ada said.
“We are pleased that we have reached an agreement because that means we have more money to bring into the CIP accounts to make more projects available in the CNMI,” she said.
“We’re very conscientious in getting this resolved,” she added.
The settlement is also advantageous to CUC because it would make it more financially sound and increase its chances to borrow money from other financial institutions, Ada said.
CUC’s debt to CDA ballooned to $106 million over the years due to its inability to make payments on time.
