The governor has declared a state of emergency for CPA which has been under his control since May.
CDA opposes the proposal, citing its detrimental effect on taxpayers and the agency’s operations.
But CDA said it is willing to temporarily suspend CPA’s interest payments until it recovers from its financial woes.
Press Secretary Charles Reyes Jr. said the administration is not “convinced” by CDA’s argument.
He noted that CDA “forgave” the $45 million debt of another cash-strapped agency, the Commonwealth Utilities Corp.
“I don’t think forgiving the debt of CPA is harmful to our taxpayers as what CDA argued. It’s the same situation with CUC when we asked CDA to forgive its debt in order to provide financial relief to CUC,” Reyes told Variety.
He said CUC’s financial problems are “far greater” than CPA’s financial issues.
“These agencies are struggling because of decline in our economy and although the governor has yet to make an official position, he is willing to support debt forgiveness for CPA because he understands its financial situation,” Reyes said.
CPA still owes CDA $6 million for the $10 million bond that the ports authority floated.
CPA has to pay CDA $68,000 monthly.
According to CPA, its ports revenue was reduced by 60 percent and its debt service ratio may “become an issue” for its seaport revenue bond.
Reyes said the administration is looking on all possible ways to address CPA’s bond indenture problems.
“CPA’s bond situation is threatened and it is the intention of the governor to resolve this concern,” he added.
Last week, the chairman of the House Committee on Commerce and Tourism, Rep. Joseph C Reyes, R-Saipan, said he opposed the “debt forgiveness” proposal.
