REGIONAL AIRLINE PROPOSAL House opposes money for study

The plan to establish a regional airline suffered a setback yesterday after members of the House of Representatives opposed a resolution proposed by the Association of Pacific Island Legislatures requesting the Pacific Island Development Bank to allocate some $100,000 that will fund a study on the feasibility of a regional air carrier.

House Speaker Diego T. Benavente questioned the resolution, saying it is not right for the CNMI government to seek funding since it has failed to meet its financial obligation of contributing $1 million to PIDB. So far, the Northern Marianas has only paid $650,000.

Rep. Manuel A. Tenorio, a member of the Aviation Task Force, said the funding allocation is necessary if the Commonwealth is serious in its goal to establish a regional airline. Tenorio offered the APIL resolution that was discussed during a board meeting last week.

“Why can’t we ask for funding when we have already paid that much?” an irate Tenorio asked. He even suggested that CNMI withdraws portion of its money in PIDB to ease its funding woes.

However, Benavente disagreed to such move, saying PIDB should not be faulted if the CNMI has not benefited from the bank.

Rep. Heinz Hofschneider supported the House Speaker’s position as he noted that taking out CNMI’s money from the bank would send wrong signals to other Pacific island nations. He said the Commonwealth Development Authority should be tapped instead to come up with the money for the feasibility study.

The resolution was referred to the House Ways and Means Committee for further study.

According to the APIL resolution, the study shall be administered by the task force on regional airline whose task is to conduct the feasibility study beginning Jan. 1, 2000. They believe that a regionally-owned or jointly operated air carrier would help the island governments in the Pacific improve their economy.

Members of APIL have agreed during a general assembly meting in Guam last June to proceed with the establishment of a unified air service in view of the downsizing of Continental Micronesia’s operations on the islands.

The decline of visitor arrivals in the CNMI has been partly blamed on the decision of Continental Micronesia to reduce its direct service from various destinations in Japan to Saipan. Beginning Oct. 1, 1999, the airline will no longer have any nonstop service to Saipan.

Since PIDB was established 10 y ears ago, it has yet to receive payment for its initial capital from its seven member states amounting to $7 million. Failure of members to meet its obligation to the bank has discouraged the Export-Import Bank of Japan from providing additional funds.

Japan EXIM Bank has expressed willingness to lend money to PIDB for its development projects provided it develops a sound lending track record and hires permanent staff member.

So far, only Yap, Palau and Pohnpei have paid their contributions to PIDB.