CPA implements new airport fees

The Commonwealth Ports Authority is expecting to generate between $1.3 and $1.9 million from the increase in landing and passenger fees which the agency implemented beginning March 1, 2000.

CPA suspended the implementation of the new schedule of airport charges for more than eight months following pressures from the 11th CNMI Legislature which pledged government subsidy to the agency.

Two United States-based bond underwriters commissioned by the Ports Authority suggested that CPA raise its rates by 30 percent in fiscal year 2000 and fiscal year 2002, as well as reduce its personnel costs by 15 percent in FY2000 and FY2001 to mitigate the negative financial impact of the garment industry pullout.

CPA has been urged to increase its current $0.85 landing fee per thousand pounds at the airport to $1.40 for signatory airlines. The financial consultants said this is necessary as this is one of the two options left to enable the Ports Authority to pay its debt by 2008.

In addition to the anticipated increase in its aviation revenues due to the hike in airport fees, CPA also looks at an additional $200,000 from the amended fuel flowage fee, $800,000 from the collection of public parking fee, and at least $150,000 from the new rates in incinerators and ground handling fees.

CPA started implementing the new schedule of fees for fuel flowage and ground handling permit July 1999, akin to the collection of new seaport fees and the airport public parking fee.

The fuel flowage fee increased to $0.025 per gallon beginning July 1. Based on the amended schedule of airport fees and charges, the fuel flowage fee shall be paid upon the delivery of aviation gasoline and jet fuel to the airport.
At the same time, CPA raised the ground handling permit fee from $5,000 per calendar quarter to $10,000 effective Thursday last week.

All taxicab operators authorized by the ports authority management to operate a unit at the Saipan International Airport have also been charged $25 per month for the issuance of the taxicab permit.

CPA was hoping to generate more than $6 million in additional revenues from its decision to increase airport and harbor fees while cutting down operational costs, including a 10 percent across the board reduction in employees’ wages.

Aside from the increase in airport fees, CPA also increased seaport fees beginning July last year with hopes to generate approximately $1.2 million in additional revenues.

In March 1998, CPA sold more than $50 million in revenue bonds through negotiation via a syndicate led by Altura, Nelson & Co. Of this amount, $33.8 million went to the seaport while the balance was tapped to fund airport projects and pay outstanding bonds.