FOR failing to comply with the Managaha Island Master Concession Operator Agreement, a notice of termination has been issued by the Department of Public Lands to Marianas Global Inc., DPL-Compliance Division Director Gregory Deleon Guerrero said.
In an interview on Monday, Deleon Guerrero said, “We issued a notice of termination to MGI in September because they failed to cure the violations.”
He added, “After that, MGI requested for an extension, and we gave them an extension so that they could cure the violations; however, the deadline came, and they failed…so right now the matter has been forwarded to our hearing officer for an appeal process.”
DPL gave MGI “until Oct. 26, then DPL will take over the operations on Managaha while the matter goes into the appeal process,” Deleon Guerrero added.
“We try to work with our clients, and if not, the process has to go through,” he said.
Asked for a copy of the termination notice, the DPL official said, “Our DPL policy is that it has to go through an Open Government Act [request], with approval of the DPL secretary.”
Deleon Guerrero said the notice of termination enumerated MGI’s violations.
Asked if these included rental payments, he said, “Yes.”
As for the other marine sports operators, Deleon Guerrero said, “What we did in the past was, DPL issued a temporary occupancy agreement on a temporary basis for vendors to offer bento boxes, beverages, marine sports, snorkeling and other activities on Managaha while the issue is in the appeal process.”
Deleon Guerrero said if the appeal process “does not go in favor of MGI, then we’re going to issue a new Request for Proposals for a Managaha concessionaire.”
Variety learned MGI has not paid rent in the amount of $800,000 plus interest of $12,000, for a total of $812,000.
According to its agreement with DPL, MGI, as concessionaire, “shall pay an annual base rent of $800,000.”
In addition to the base rent, the concessionaire “shall pay DPL 9% of its business gross receipts derived from the agreement.”
MGI and DPL signed the agreement on April 18, 2023.
Variety was unable to get a comment from MGI management.
An official. who declined to be identified, earlier told Variety that in light of the low tourist arrivals, the base rent of $800,000 a year that Marianas Global has to pay is not “doable, realistically.”
A local businessman, who also requested anonymity, said the “additional gross receipt rent” of 9% under the concession agreement “is basically about 40% of the business net profit, [and] that is not very encouraging.”
