Private panel urged to manage trade zone

A government body tasked to draw up a free trade zone in the Northern Marianas has proposed a nine-member board, comprised largely of private sector representatives, to run the first ever special economic site on the island.

The Subcommittee on Free Trade Zone has also given way to a requirement of the Commonwealth Ports Authority for a lease payment on public lands to be used for the establishment of the zone, according to a member of the panel.

Rep. Karl T. Reyes, who also chairs the House Ways and Means Committee, said the governor will still have to appoint members of the board as provided under a proposed legislation.

The subcommittee’s private sector representatives had recommended that the Saipan Chamber of Commerce have a hand in selecting people who will sit on the board.

They could name at least five representatives who are not necessarily from the chamber, but from the local business community, according to Reyes.

“Five members will come from the private sector, all appointed by the governor because the board will be dealing with public lands and it’s a government function,” he said.

The body, however, agreed in a meeting last Wednesday to discuss the proposal with Gov. Pedro P. Tenorio next week so that they can come up with a final draft of a proposed legislation.

The government is eyeing completion of the measure to present before the scheduled CNMI economic summit on March 19 as part of its efforts to revitalize the slowing economy.

The island is reeling from its worst crisis in years spawned by the recession in Asia, NMI’s main tourism market and source of foreign investments.

Local leaders are hoping that the planned free trade zone will help spur the economy with the creation of new industries and jobs for the indigenous population.

While the subcommittee has worked out on a package of incentives for potential investors in the site, such as tax exemption and access to foreign manpower, the ports authority may charge for the use of its properties, Reyes said.

Since the areas should be situated near seaports and airports, CPA has idle lands which can be converted into the plan. The Tinian municipality has already requested the ports authority to set aside some six hectares of public lands near the dock for this purpose. …

“CPA will provide them for reasonable fee,” the legislator explained. “The fee should be attractive to allow investors to come in.”

Although CPA has yet to determine how much the lease payment, Reyes said the subcommittee is pushing for an amount comparable to other free trade areas in other countries, which is equivalent to around $1 per square meter every year.

The lease is needed by CPA because it has to meet its financial obligation under the $53 million bond it secured last year for airport and seaport improvement projects.

“It’s not that they want to charge fees, but because it’s connected with the issuance of the bond,” he said.