Lease renewal for IT&E still in the works

After several months of back-and-forth between the Department of Public Lands and the office of Rep. Alice Igitol (R-Saipan), the lease renewal for a telecommunications company has yet to be agreed upon even after the expiry of the main 25-year lease.

Unresolved conflicts between the office of Igitol, who chairs the House Committee on Natural Resources, and DPL Secretary Marianne Teregeyo further delays Pacific Telecom Inc.’s request for a 15-year lease renewal.

The company, which does business as IT&E, has yet to have its lease extension approved, as Igitol disputes Teregeyo’s decisions surrounding the extension.

According to a Feb. 13, 2018, letter from Igitol to DPL, the agency’s removal of certain provisions within the contract agreement in favor of PTI could also be amended in favor of those of Northern Marianas descent.

“Given this, why does DPL insist on following the terms of the lease strictly on the one hand, while it deletes revenue-generating provisions on the other?” asked Igitol in her letter. In the same letter, she questions how much the Marianas Public Land Trust Fund has “lost in terms of revenue” that could have been paid pursuant to the deleted provision.

In a previous letter dated Jan. 24, 2018, Teregeyo informed Igitol that DPL and PTI amended the June 28, 1990, and Sept. 21, 1990, lease agreements to delete the Gross Receipt Rental provision of the agreements. The amendment relieves PTI of having to pay a specific rate based on their gross receipt rentals based on revenue generated in the leased area. PTI’s property did not affect the revenue stream of PTI.

In response to Igitol’s Feb. 13, 2018 letter questioning the amendment, Teregeyo clarified in a Feb. 26, 2018, letter that the amendment was done back in 2006.

“The original lease included a percentage of BGR component of rent. However, the original lease was amended in 2006 to exclude it. In other words, it was taken out before the lease’s expiration date, which we have clearly and repeatedly explained to you and [the] House legal counsel,” she said, referring to a joint meeting with the House and the Senate early January 2018.

“Why it was taken out in 2006 is unknown and why it was not reinstated prior to expiration in 2015 is also unknown,” she later stated.

Teregeyo further explained that Attorney General Edward Manibusan advised the department that the leases as amended is the “document to follow” due to the proposed renewals being a continuation of existing leases not to exceed 40 years.

“…It was partly DPL’s fault for not addressing the extension in 2015—as requested by PTI—prior to the expiration of the lease (as amended),” wrote Teregeyo.

Teregeyo added in the same letter that she agrees with Igitol that DPL should have performed a study to base the removal of the gross receipt rental provision in the lease agreement.

“…DPL should have performed such analysis to base its decision to remove the percentage of BGR rent at that time. It did not. Why it was taken out in 2006 is unknown,” Teregeyo wrote to Igitol.

Igitol again sent a March 6 letter to the DPL secretary in response, reiterating that her actions were based entirely on “what I believe is best for our people of Northern Marianas descent.”

“Before we enter into another 15-year contract, we all need to do right for our NMDs,” said Igitol, adding that both DPL and her office cannot “ignore our responsibility to them to secure the best possible terms for their land leases.”

Igitol stated that DPL in their Feb. 26, 2018, response to her office did not provide a cost-benefit analysis on the provision’s exclusion.

“DPL admits that it should have done an analysis. But after failing to do so, DPL still asserts that it is performing its due diligence today. How so?” asked Igitol. “DPL should determine how much will be ‘waived’ in the proposed 15-year extension before it takes a firm position that this potential revenue stream should be excluded from the next 15-year term,” she continued.

Igitol told Saipan Tribune in a brief interview that she intends to meet with Manibusan to “finalize the issue.”