CUC weighs purchase of drilling equipment

The Commonwealth Utilities Corporation is mulling over a request from the Tinian municipality to purchase well drilling equipment that will help in finding water sources for island residents, according to its executive director.

The equipment, valued between $200,000 to $250,000, is part of federally funded project on Tinian involving water well drilling, rehabilitation and an overall water resource study that has been terminated due to failure by town officials to meet its financial obligations.

CUC chief Timothy P. Villagomez said the municipal government is facing potential lawsuit from the federal government unless they pay their debts amounting to more than $1 million incurred since the project began in 1991.

The U.S. Geological Survey has called off the Tinian project due to failure by the municipality to pay its contribution. The U.S. government is demanding payment of some $1.09 million for the services performed by USGS.

The Tinian mayor is currently seeking ways to meet its obligations and is now asking the government-owned utility firm whether it is willing to buy the drilling equipment which can be used in other CUC projects.

“I will be the first to say that I want to buy it because it’s a valuable equipment that we can use elsewhere,” Villagomez explained. “If that is one way of doing it, then I am buying it so that we can use that payment possibly towards some of the bills associated with this project.”

Although CUC was not directly involved in the Tinian project, the utility firm can acquire the drilling equipment for its water well projects on Saipan.

In fact, the equipment has been shipped to Saipan and is being used for drilling of some of the wells on the island, according to Villagomez.

USGS is doing an inventory of the equipment and estimates of its value range from $200,000 to $250,000. “That has to be reviewed and do a fixed asset evaluation, but the usefulness of this equipment cannot be questioned,” the executive director said.

A legal opinion has supported the CUC purchase of the equipment which is underscored by its success records in the past when Tinian was able to pinpoint water wells.

“Under the current economic conditions, the municipality of Tinian does not have the money to pay for its share of the project,” the opinion said. “It appears that CUC has and will benefit from the project at a minimum by using the equipment on Saipan.”

The Tinian mayor’s office, meanwhile, is working on a payment schedule in an attempt to hold off collection actions by the federal government.