Commonwealth Ports Authority Board Chair Jose C. Ayuyu, second right, speaks as board member Thomas Villagomez listens during a meeting on Tuesday. In the background are Lt. Gov. David M. Apatang and one of his staff members.
THE Commonwealth Ports Authority board of directors on Tuesday voted unanimously to terminate its lease agreement with Rota Terminal & Transfer Co. Inc.
RT&T violated the terms and conditions of the lease agreement by failing to maintain a valid business license, the CPA board said.
Initially executed on April 18, 1986 for a 15-year term, the lease agreement was amended on Jan. 29, 1996 to extend it for another 30 years. The agreement granted RT&T exclusive use of Rota West Harbor and its terminal warehouse for stevedoring services.
The call to terminate RT&T’s lease contract was triggered by concerns about the high cost of living on Rota that local businesses blamed on the “exorbitant fees” charged at the Rota seaport. Problems with an inoperable crane at the port were also brought to the attention of the previous CPA board under the administration of former Gov. Ralph DLG Torres.
Under the administration of Gov. Arnold I. Palacios, the clamor to terminate RT&T’s lease grew louder with Rota Merchandising Corp. owner Pedro Q. Dela Cruz and Sen. Paul A. Manglona continuously urging the CPA board to “save the people of Rota from the high cost of living.”
Dela Cruz said because of the “unreasonable” amount of fees that RT&T charges Rota businesses, the price of a 50-pound bag of rice now costs $80 compared to about $35 on Saipan.
On March 28, 2024, Department of Commerce Registrar of Corporations Remedio C. Mafnas terminated RT&T’s legal existence. In her official notification, she told RT&T President Victor B. Hocog that “our records indicate your corporation is delinquent in filing its annual corporation reports.” She also said that RT&T was prohibited from conducting any business activities until the outstanding reports were filed and “all tax arrears have been satisfied.”
Last week, CPA Vice Chair Antonio Cabrera said the board should not continue to allow a company to operate on CPA premises without a business license.
Violations
On Tuesday, CPA Board Chair Jose C. Ayuyu, Cabrera, board members Dolores Kiyoshi, Steve Mesngon, Joseph Diaz and Thomas Villagomez adopted a motion to terminate RT&T’s lease agreement. Board member Ramon A. Tebuteb abstained.
The board’s decision was made in response to the recommendation of CPA Executive Director Leo B. Tudela based on the findings of lease compliance officer Joy Ann DLG Tenorio.
Tenorio said RT&T had three violations that remained outstanding:
1) Failure to purchase a crane, repair parts or similar equipment and resume stevedoring services.
2) Failure to remove RT&T’s inoperable crane from CPA property.
3) Failure to provide CPA with a copy of a valid business license.
Additionally, Tenorio said RT&T’s outstanding balance of $1,920 due the ports authority had not been paid.
Executive session
At the beginning of the meeting on Tuesday, Tebuteb questioned the removal of the executive or closed-door session from the meeting agenda. While he was pointing this out, Ayuyu cut him off and said, “Make it simple, please, because we need to move on. … Please, with due respect, because sometimes it’s like a delaying tactic in the decision-making to help the people.”
“What else do you want, board member? What else?” Ayuyu asked Tebuteb who replied, “I’m not yet finished and you are cutting me off.”
“So, tell me. We don’t have the whole day to talk,” Ayuyu said.
“I’m just asking for clarification because I received information that is confidential, that may require me to ask that we go into executive session,” Tebuteb said.
Cabrera, who made the motion to terminate the RT&T lease, moved to include an executive session on the agenda.
Prior to the roll call vote, Cabrera reiterated his concern, saying that as a board member of CPA, “I have to abide [by] my responsibility especially protecting CPA from any serious liabilities.”
‘Confidential information’
Villagomez, for his part, asked Ayuyu to allow further discussion on the “confidential information” they received during a seaport committee meeting. He said he was willing to support the motion to terminate the lease agreement but not without guidance and clear understanding of the legal opinion regarding RT&T’s violations.
Villagomez said Ayuyu “got to understand that I just don’t go in just because he told me to vote yes or no.” He said he would support the motion to terminate RT&T’s lease but only for the reason that the stevedoring company lacked a business license. As for the two other violations that had not been cured or were “partially cured,” he said, “We don’t have to go through the whole process … there.”
He told Ayuyu: “I want to support that,” referring to the termination of the lease, “but not the way you want to do it.” He asked Tudela to read again the executive director’s recommendation.
After Tudela did so, Ayuyu said, “Let’s move on, please.”
Villagomez was still talking when Ayuyu cut him off, saying, “I cannot allow you to continue talking.”
Villagomez asked, “Which one of these [reasons] are we going to use for termination?”
Ayuyu said, “You still did not understand the executive director’s recommendation? Jesus Christ. Do we have to [explain] it more like [in] elementary school? You already said the basis for termination. If you still remember Chamorro, can you speak in Chamorro please? This [has been] the delaying tactic all the time. Don’t do … that and I don’t appreciate that. Every time we have a meeting, you always find a way to delay things,” Ayuyu said.
“I’m not delaying,” Villagomez said, to which Ayuyu responded, “Yes, you are.”
Ayuyu added, “Think about the Mariana Islands, the people that you are serving and don’t think about grandstanding, and I will appreciate that very much. I want to move on to the next person [who wants to speak], you’ve got your time already,” Ayuyu said. He then told Tebuteb that it was his turn to speak. Tebuteb said, “I think it’s appropriate to hear all the members’ arguments.”
“Yes, it is appropriate to listen to members but not forever,” Ayuyu said.
Tebuteb said Villagomez had the right to say whatever he wanted to say.
Ayuyu, said, “Yes, but I have the right also to cut the meeting. …”
“We should allow Villagomez to say his piece,” Tebuteb insisted.
Ayuyu said, “So I’ll tell you, if he says his piece we are going to be here all day.”
Villagomez said, “No, like I said, I just want to be specific that we are going to terminate the lease because of non-compliance, and I’m in support of that.”
Ayuyu then allowed Assistant Attorney General Greg Cenac to explain the executive director’s recommendation for termination due to the lack of a business license.
Everyone then agreed that RT&T’s lease would be terminated because it did not have a business license.
Glad
In a telephone interview after the meeting, Dela Cruz said he was glad that the CPA board finally made a decision based on RT&T’s violation of the lease agreement. The lack of a business license, he said, is a most serious concern.
He said the CPA board just helped the Rota people “escape from the high cost of living.”
For his part, Sen. Paul A. Manglona said, “I have been fighting to lower shipping costs to Rota for many years. Rota residents have endured many, many years of hardship due to the high costs of basic commodities because of the stevedoring rates imposed by Rota Terminal & Transfer.”
“Today,” he said, “I applaud the CPA board for terminating RT&T’s stevedoring contract. This action was long-awaited and much warranted. The people of Rota appreciate the CPA board’s action today and can look forward to a better and brighter future ahead.”
Tudela said he was happy with the board’s decision. “We are trying the best to reduce the cost of living on Rota as soon as we can,” he added.
He said there are two stevedoring companies that have expressed interest in operating the Rota seaport.
He said there is now a need to allow 90-day temporary stevedoring services while CPA selects a new company with a new lease agreement.
