According to acting CPA Executive director Lee Cabrera an amended memorandum of agreement was signed by the two agencies, allowing them to “offset” the utility charges incurred by the Francisco C. Ada/Saipan International Airport.
The original MOA was signed on July 1.
“The new MOA acknowledged that CUC owes CPA a certain amount for the sewer line project and what CPA wants to do is to take its monthly power bills and charge them against what the utilities corporation owes us…in effect CUC agreed to offset over $4 million,” Cabrera said.
The MOA for the sewer line project was signed on Nov. 9, 1998.
Its original cost was $7.2 million and 29.4 percent of this figure had to be paid by CPA with the remaining 70.6 percent of the costs to be paid by CUC.
CPA agreed to pay for all progress payments, subject to reimbursement by CUC, for the portion of the project costs that CUC had agreed to be responsible for.
On April 14, 1999, the two agencies agreed to transfer the project to CUC upon its completion.
The project was completed and transferred to CUC in fiscal year 2006.
According to Cabrera, on July 11, 2007, CPA and CUC signed another MOA superseding and replacing any and all prior payment agreements.
As of Sept. 2007, the receivable from CUC amounted to $4,700,947 million.
Cabrera said the sewer line project runs from the airport and along airport property and was entirely funded by CPA.
“We consider [the offset agreement] as a recovery of our money and given CPA’s financial situation, this is something that will help our cash flow,” Cabrera told Variety yesterday.
He estimates the airport’s power and water consumption to be nearly $50,000 a month.
“That’s one reason why we aggressively pursued this effort with CUC because we’re in financial difficulty and we appreciate CUC for acknowledging the terms of the new MOA,” Cabrera said.
