Row stalls project •CUC, CPA bicker over contractual obligations

Despite fears of potential health risk to residents due to non-completion of a long-stalled sewer line project near the Saipan airport, the Commonwealth Ports Authority has threatened to shut down its construction following dispute with the utilities corporation.

Both CUC and CPA have failed in the last few weeks to iron out differences over the contractor’s claims as they continue to accuse each other of not cooperating with the settlement of about $1.9 million owed to Pacific Drilling Ltd.

Unless both government agencies resolve the long-standing problem, the contractor may be forced to take the matter to court to demand payment of fees and other charges brought about by one-year work stoppage on the project.

The new wastewater collection pipeline, costing more than $4 million and only half of it had been completed when the construction halted in May last year, runs from the airport to the Agingan Waste Water Treatment Plant benefiting some 1,000 households.

Authorities have warned further delay could pose public health risk as ground water supply in the area is prone to contamination, prompting the legislature to intervene in an attempt to push the project.

But CUC and CPA have refused to budge despite recent negotiations to work out a deal on the Pacific Drilling’s claims. Utility officials maintained the problem is not part of an earlier memorandum of agreement between the two agencies.

“If CUC is not willing to participate in the claim and the contractor is not willing to cap their claim at $750,000, then I am afraid we have no other alternative but to shut down the project,” said CPA Executive Director Carlos H. Salas.

In an interview with reporters during the inauguration of the new seaport, he maintained the cost-sharing deal with CUC must also apply to the payment of the contractor’s claims as recommended by the Federal Aviation Administration.

FAA earlier had warned CPA against funding the project beyond the airport premises, which was one of the reasons — aside from lack of funds — that prompted ports officials to seek CUC’s assistance.

Under the MOA reached late last year, CUC will shoulder 70.6 percent of the project cost amounting to $3.5 million while the remaining 30 percent will be charged to the operating and capital improvement project costs of Saipan International Airport.

“Given that kind of restrictions, I hope CUC can understand that situation and help not only the CPA, but the whole community,” Salas pointed out.

A colossal mistake, CUC says

CUC Executive Director Timothy P. Villagomez, however, has urged board directors to withhold assistance, blaming ports officials for the delay and calling the project a “colossal mistake” by CPA.

In a tersely-worded memorandum to CUC directors, he alleged that rather than helping fix the squabble, the CPA executive director had cast blame on him “personally” as well as on former ports authority officials.

“CUC customers should not shoulder the expense of CPA’s mounting mistakes and I should not be blamed for their blunder. It is my advice and recommendation that this Corporation no longer be involved with this project unless (Salas) demonstrates executive ability,” Villagomez said.

He maintained the government-owned utility firm had only been dragged into the dispute in an effort to bail out the cash-strapped CPA by paying the construction costs as well as part of the contract management and mobilization fees.

In fact, some of the $268,000 offered partly as settlement of the escalating costs associated with the stop order by the ports authority were CUC money, according to Villagomez.

Salas, on the other hand, stressed the balance from the $750,000 believed to be owed to Pacific Drilling should be paid out by the utility firm when construction resumes.

Villagomez balked at the proposal, saying CUC “cannot ‘participate or assume’ responsibility for CPA’s mammoth mistakes and breach of public trust.”

He added: “Should CPA cancel the project, the matter will likely end up in court.”