CUC applied for a loan so it can make an initial payment of $1.5 million to the U.K.-based independent power provider, Aggreko International Project Ltd., and to support the agency’s other financial obligations.
Santos said according to the Attorney General’s Office, there could be a legal issue with the loan application of CUC
However, he stated, “We stand ready to help CUC…. There’s a bit of statutory issues…[but] from our side, we don’t want to deal with that.”
Rep. Victor B. Hocog, Ind.-Rota and chairman of the House Committee on Public Utilities, Transportation and Communications, told the Variety that under the emergency regulations of the governor, CUC is not authorized to apply for a loan exceeding $500,000.
He also stated that the Constitution prohibits MPLT from providing a loan for the government’s operations.
“The MPLT loan is now moot,” the lawmaker said, adding that CUC needs a “direct appropriation.”
Hocog said he favors only an “advance projected resources” for CUC that will benefit its customers.
Rep. Francisco S. Dela Cruz, Covenant-Saipan, also does not approve of CUC’s MPLT loan in view of the agency’s outstanding debts with vendors and other independent power producers.
Santos hopes that the House will “resolve quickly” the legality issues with the loan as there is a power crisis affecting the people.
Sen. Maria T. Pangelinan, D-Saipan and chairwoman of the Senate Committee on Fiscal Affairs, earlier said the interest fee to be collected by MPLT from CUC should be turned over to the general funds.
She said CUC would only have to pay for the principal amount of its loan from MPLT because the interest fee will be remitted to the general fund.
The MPLT loan carries a 7 percent interest rate, which will translate to a $650,000 total interest fee under a 36-month payment scheme.
