CUC, CPA make deal •Agencies OK agreement to share costs in contract hitch

The ports authority and the utilities corporation yesterday agreed to share the cost of settling a contractor’s claim for a half-completed sewer line, ending months of squabble between the agencies that has delayed the completion of the critical project.

“The issue has been resolved,” Gov. Pedro P. Tenorio told in an interview after the meeting. “They’re going to start the project right away.”

According to the governor, a new Memorandum of Agreement was forged between the Commonwealth Ports Authority and the Commonwealth Utilities Corporation which spells out the terms of the cost-sharing of $750,000 in unpaid fees to the Pacific Drilling Ltd.

“CUC and CPA agreed how they are going to share their responsibilities,” Tenorio said.

Before officials of both agencies and members of the Legislature sat down with the governor, they met in the morning to bridge differences on the sharing of financial obligation to Pacific Drilling. “They signed the MOA so we could resume the project as soon as possible. I told them to resolve the problem before they come to me,” Tenorio said.

In a separate interview, CPA board chairman Roman S. Palacios said the amended MOA includes a provision stipulating that the two agencies pay the unpaid bills to the contractor, with the government-owned utilities firm shouldering $400,000 and the rest by the ports authority.

The inclusion of the payment clause to the contractor brings to nearly $5 million the total cost of the project, which runs from the airport down to the Agingan Waste Water Treatment Plant.

Palacios explained sewer line construction will resume as soon as a new change order is issued and checks are handed over to Pacific Drilling.

Dismayed over bickering that has slowed down the project, the governor stepped in to hasten completion of a waste water collection pipeline, which delay in construction has drawn concerns from authorities over potential health hazards to the public.

Health officials warn postponement in construction could endanger some 1,000 residents in the area, where ground water supply is prone to contamination.

Before a meeting brokered by Tenorio, officials of CPA and CUC had refused to budge despite recent negotiations, as the utilities company claimed it was not party to a previous memorandum of agreement between the agencies.

According to Carlos H. Salas, CPA executive director, unless CUC agrees to pitch in money and that the contractor caps their claim at $750,000, the ports authority would have to shut down the project.

Salas maintained that the cost-sharing agreement with CUC also applies to payment of the contractor’s claim.

An MOA signed late last year stipulates that CUC shoulders 70.6 percent of the project cost amounting to $3.5 million while the rest will be charged to the operating and capital improvement expenses of the Saipan International Airport.

Aside from funding shortage, the ports authority says it cannot defray the cost for the completion of the entire project, citing a restriction imposed by the Federal Aviation Administration that disallows CPA to use its revenues for projects beyond the airport premises.

CUC Executive Director Timothy P. Villagomez, however, balked at the proposal of cost-sharing, saying the government-owned utility cannot assume responsibility for “CPA’s mammoth mistakes and breach of public trust.”