Outer Cove lease faces termination

The House transportation committee will propose termination of the current lease on the controversial Outer Cove Marina in a move intended to bail out Marine Revitalization Corp. from its present financial woes.

Committee chair Rep. Rosiky F. Camacho said a bill is set to be filed within the next few days mapping out the plan following review of pending legislation.

The forthcoming measure will be a substitute to the proposal regulating boat traffic in the Saipan lagoon which was introduced in the lower house amid disputes between MRC, boat owners and tour operators.

“We are going to terminate the lease granted to MRC,” Mr. Camacho told reporters in an interview yesterday, referring to the operation of Outer Cove Marina.
The non-profit corporation forged an agreement for a 15-year lease with the Department of Lands and Natural Resources and the U.S. National Parks Service during the previous administration to build and operate the marina.

The lease covers 16,394 square meters of submerged lands with the marina initially estimated to cost $1.2 million. But the project ballooned to over $3.6 million which MRC is now trying to recover through rate and fee increases.

Boat owners and tour operators have opposed the hikes due to the slowdown in the tourism economy and have repeatedly asked intervention by the CNMI government. MRC President Anthony Pellegrino has refused to give in to their demand.

Under the proposed bill, the Division of Fish and Wildlife will take over operation of Outer Cove, while a task force composed of government agencies and private sector representatives will monitor the operation.

Traffic will be regulated as the boats and other small vessels plying the lagoon will only be allowed to dock and use facilities of Outer Cove and the adjacent Smiling Cove, according to Mr. Camacho.

Likewise, other existing docks like the Echo Dock and Seaplane Dock will be restricted to vessels over 85 feet in length. This will prevent the Commonwealth Ports Authority from allowing use of these “third-class and unsafe” facilities to transport tourists, he said.

At present, these two docking facilities within the Saipan seaport compound are being used by some tour boats after they left Outer Cove due to their quarrel with MRC.

The $2.50 head tax imposed on passengers of tour boats going to Managaha Island will be used to pay off MRC’s debt, the legislator added, noting other fees such as slip and rental will finance the marina’s operation.

Mr. Pellegrino in August hiked the departure fee to $4 per passenger, claiming the corporation was losing $24,000 a month with the much-lower fee.

He also had argued that MRC may eventually go bankrupt with the failure by the CNMI government to comply with the agreement to make sure that users are fully paying their fees.

While the bill is yet to be filed, Mr. Camacho expressed optimism it will draw the support of House members and even from Mr. Pellegrino in an effort to finally resolve the three-year long dispute on Outer Cove.

The Senate Committee on Resources, Economic Development and Programs will also release its findings of its investigation into the controversy.