Bitter fight over fees strand tourists at Outer Cove

Bus loads of Japanese tourists scheduled to take a day trip to Managaha island were turned away yesterday morning from taking their boat ride at the Outer Cove Marina by the management of Marine Revitalization Corp. after Tasi Tours refused to pay higher passenger departure fee.

The Japanese tourists who had to endure several hours of delay were finally able to leave for Managaha using the convenience dock. The National Parks Service allowed Tasi Tours only to use the convenience dock for a day.

Rex Kosack, legal counsel for Tasi Tours, said the Japanese tour operator will file an injunction against MRC to allow the tour operator to continue using the Outer Cove Marina.

MRC president Anthony Pellegrino, who led his staff in blocking the tourists from using the marina, justified his action saying he has the right to drive away tenants from his own property. The marina was built by MRC, a non-profit corporation which was granted a 15-year lease by DLNR under Public Law 9-46 on some 16,394 square meters of submerged land.

“All I want is what is due me. This is my property and they are not going to load and unload here. They do not have a lease, they do not have a right to be here,” said Mr. Pellegrino.

The lease agreement of Island Cruise Lines Saipan, which is operated by Tasi Tours, expired on July 19, 2000. A month before the expiration of the lease, Mr. Pellegrino informed Tasi Tours that he would impose the new $4 departure fee instead of the $2.25 imposed per passenger.

On July 17, 2000 Tasi Tours management finally met with him to discuss the renewal of the lease. Mr. Pellegrino offered a compromise of an additional $90 cents instead of the additional $1.75 cents. But Tasi Tours insisted it could not afford the new rate.

“MRC has been unreasonable and unreliable. We need a good solid lease to be able to do business here,” said Mr. Kosack.

Tourism officials and Legislators were at the dock to find a solution to the problem which has locked MRCand the boat owners in a bitter battle over acceptable fees on the use of the marina.

Marianas Visitors Authority Managing Director Perry Tenorio expressed concern that the incident would have a negative impact on CNMI’s image in Japan. Tasi Tours is the subsidiary of Japan Travel Bureau, the biggest tour operator in the world. Some 200 to 250 Japanese tourists everyday are ferried by Tasi Tours to Managaha Island.

Senate President Paul Manglona hinted that MRC’s move may have been a retaliation against the public hearing the Senate is planning to conduct to resolve disagreement on the fees in the marina.
He said the problem should have been settled by the parties concerned without affecting the tourists.

Based on the agreement with the boat owners, the Senate president said MRC should have not increased the fees while the final report from the Office of the Public Auditor is still being prepared.
OPA has conducted an investigation into the construction of the Outer Cove Marina.
A preliminary report made by the OPA in May 1999 noted that MRC management failed to prepare a more accurate study and projection of the construction cost thus, the amount has ballooned from the original $1.2 million to more than $3 million.

The marina opened in November 1998, making available 45 boat slips.

The Revised Rules and Regulations of DLNR authorized a departure fee of $4 per passenger but the boat owners have vehemently opposed the increase citing the decline in the tourism economy.

However, a study conducted by an independent accounting firm hired by DLNR revealed that the boat owners must pay over $5 so that MRC can survive the cost of operation.

MRC has been having difficulty in meeting operation costs and long-term debt obligations primarily because boat owners have refused to move their vessels to the marina or to pay the $4 departure fee as well as construction costs in excess of costs budgeted.

About one-half of the 45 boat slips available are occupied by commercial vessels while three are for personal use.