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CPA, Mobil settle on uncollected fee
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Posted on Oct 17 2005
The Commonwealth Ports Authority has reached a settlement agreement with Mobil Oil Marianas on the $6 million in retroactive wharfage fees that CPA failed to collect from the oil firm between 1997 and 2004.
Under the settlement signed Friday, Oct. 14, Mobil will have to make a lump-sum payment of $2.7 million to CPA within five days of execution of the agreement.
Also pursuant to the agreement, Mobil will be collecting $3.4 million from the Commonwealth Utilities Corp. for wharfage on fuel supplied by Mobil to CUC during the subject period.
Mobil has 15 days to collect the amount from the utility firm and remit the funds to the ports authority. If CUC does not pay within this period, the right to demand the money will be assigned to CPA.
The settlement agreement noted that Mobil had discussed the issue with its legal counsel and believed that retroactive charges were collectible from CUC under the provisions of its previous and current supply contracts.
Mobil is also tasked by the agreement to collect from Mariana Acquisition Corp., which operates Shell Marianas, the $718,7755.03 in retroactive charges that Mobil asserts is due as a result of fuel products brought by Mobil into the Commonwealth for Shell.
However, the full amount that is due from Shell will be Mobil’s sole responsibility to collect and will remain with Mobil.
In the agreement, CPA also acknowledged receipt from Mobil of $1.27 million in wharfage at the Port of Saipan and $117,759.18 at the Tinian seaport for the period of July 2004 through September 2005.
CPA and Mobil started negotiating about the back-bills after the ports authority found that Mobil had not been billed for wharfage fees for a seven-year period starting October 1997, when the Saipan Harbor Improvement Project was completed.
Mobil’s unbilled wharfage fees amounted to $6 million when CPA discovered the oversight last year. This amount includes charges from the Port of Saipan and the West Tinian Harbor, where Mobil maintains fuel facilities.
CPA charges a wharfage fee of $5.50 per revenue ton of goods passing through its ports.
