CIP injects $97-M into NMI economy

The Commonwealth has matched nearly 100 percent of the total $49.6 million in total funds earmarked by the United States under the third Capital Improvement Project Program which stretches from Fiscal Year 1996 to 2002, according to government documents.

This amount represents some $97.5 million in fresh money circulating in the local economy that brings prospects for increased business activity amid dramatic slowdown in the entry of new investments into the Commonwealth.

The money has financed 47 infrastructure projects throughout the three major islands of the Northern Marianas. Saipan received $70.579 million for 24 projects, while Rota and Tinian received $12.345 million each for 13 and 10 infrastructure projects, respectively.

Mike Sablan, the governor’s special advisor for finance and budget, said the CNMI government has already identified local matching fund for at least $48 million of the $49.6 million federal money that was made available through the Covenant 702 Program.

Mr. Sablan mentioned five legislative measures that have been signed into public law by Gov. Pedro P. Tenorio which guaranteed local matching funds for federal money under the third CIP Program.

Most of the available CIP money went to the construction of new prison an juvenile correction facilities as guaranteed by Public Law 11-78, while PL 11-79 earmarked funds for homesteads and other infrastructure projects, as well as supplemental funding for the prison project.

Around $18.5 million in both federal and local funds have already been earmarked for the completion of the new prison facilities, as well as the improvement of the existing detention center in Susupe.

PL 11-89 was passed and signed into law to pave the way for the completion of pending capital infrastructure projects at the Public School System. This was the time when the CNMI government floated $15 million bonds to raise the needed amount to match federal funds.

More than $22 million in combined local and federal funds were made available to finance a variety of PSS projects that include the construction of new high schools, classrooms and other school facilities on Saipan, Tinian and Rota. This also guaranteed the completion of the much-delayed Marianas High School.

Public Law 11-111 and 11-119 funded a variety of infrastructure projects like the Kagman homestead, the Garapan Tourist District Revitalization, Saipan Cemetery, Rota Airport, Rota Manamko Center, Tinian homestead water district systems and high rise engine and rescue equipment.

CIP agreements

When Mr. Tenorio’s administration assumed office in January 1998, about $44 million in total federal money were sitting idle awaiting local matching funds that were not immediately made available because of economic slowdown that affected CNMI’s revenue-generating capabilities.

“When the governor came in, we have $44 million in unmatched federal funds but we have matched that since then. We’ve matched all the 1996, 1997, 1998 and 1999, and practically up to 2000 CIP money,” Mr. Sablan told an interview.

The Third Special Representatives Agreement between the CNMI and the U.S. governments provides for $77 million in Covenant Section 702 CIP federal funds or $11 million per year to the Northern Marianas from FY-1996 to FY-2002, which requires a dollar per dollar matching value.

Living up to the provisions of the Covenant, the Tenorio Administration has so far completed the 702 CIP Program Plan in December 1998 as required under the funding agreement.

The CNMI has also met its matching share requirement through FY-2000 with the enactment of PL-11-102 which authorized the local government to issue up to $60 million worth of tax-exempt general obligation bonds.

Since January 1998, the Commonwealth has activated more than $53.5 million worth of infrastructure projects under the Covenant Section 702 CIP Program, and has appropriated more than $95 million in projects, equivalent to 96 percent of the total available CIP funds for FY 1996-2000.

The First Agreement between the CNMI and the federal government on the appropriation of U.S. funds for infrastructure projects on a 50-50 matching value was implemented from Fiscal Years 19 78 to 1985.

The CNMI entered into another seven-year agreement with the U.S. which stretched between FY1986 and 1992. A third program was not immediately reached until three years later.

However, the CNMI continued to receive appropriation from the U.S. Congress despite the absence of an agreement during the interim period of Fiscal Years 1993, 1994 and 1995. But the amount was less than the $11 million it received under the agreement.

With all of the available CIP funds nearly matched locally, the CNMI government is upbeat on the possible multiplier effect of over $60 million worth of capital infrastructure projects which has been anticipated to reach more than $400 million in four years.