Lang to CUC: Force gov’t. to pay bills

Warning that the mounting utility bills incurred by the government is hurting the image of the CNMI to potential investors and financial institutions, former Gov. Froilan C. Tenorio has urged anew the Commonwealth Utilities Corporation to pressure the present administration to settle its $12 million debt.

Amid its crucial action on the controversial Saipan power project, the CUC board is again a target of criticisms from the former governor over its handling of the government’s outstanding balance and the request for discounted power rate by the Tinian Dynasty Hotel and Casino.

“The CUC problems I have been focusing on are but the tip of the iceberg,” he said in a four-page letter to CUC Board Chair Jesus T. Guerrero.

“There are even more serious ones… This problem with the administration… is hurting our bond ratings. [T]his is a serious matter,” he added.

According to Mr. Tenorio, he spoke to a finance company official from Japan whose firm is looking at opportunities in the CNMI, but that the interest rate, if the government were to borrow money from them, would depend on the bond ratings.

Gov. Pedro P. Tenorio’s administration is hoping to float $60 million bonds for its various capital improvement projects, but the plan is still being mapped out by its bond underwriter Paine Webber. Final details are expected to be disclosed by July.

However, the former governor considered its debt to CUC and the latter’s handling of the 80-megawatt power generation project, which he said is “another fiasco” by the board, are two factors that will affect CNMI’s ability to float the bonds.

He dared Mr. Guerrero to use his leadership to address the problems besetting the utility corporation, or give up his post and resign from the policy-making body.

Jabs

Mr. Tenorio, who has become CUC’s chief critic since attending its board meeting last month, renewed his attacks in the May 24 letter, punctuating his comments with jabs at his successor, and incumbent elected officials seeking higher posts in next year’s polls whom he said are all parties to the government’s inability to settle the debt.

He has announced his intention to run in the 2001 gubernatorial election under the Reform Party which he formed after his defeat in the 1997 polls to the incumbent governor.

In the letter, Mr. Tenorio also warned the present board members would be liable for failure to carry out their fiduciary responsibility by demanding payment from the government.

“You are not putting enough pressure on the legislature and the governor to pay their utility bill,” Mr. Tenorio said. “But if you are not forceful in demanding payment, you and the other board members will be liable. Take my word that the legislators will not come to your rescue. You and your colleagues will be left holding the bag.”

Mr. Guerrero could not be reached for comment on his latest statement. Pamela Mathis, CUC’s chief information officer, did not call up again as she promised when sought for reaction on Mr. Tenorio’s letter.

The government has ran up unpaid billings due to its failure to meet its monthly obligations to CUC. Gov. Tenorio has pledged to settle the debt, but finance and utility officials have yet to reach a compromise agreement following several negotiations.

Ms. Mathis, responding to the ex-governor’s initial accusations, has blamed him for failure by the present administration to pay all its obligations because of the liabilities it inherited during his four-year term.

Help

But Mr. Tenorio emphasized he helped the bankrupt corporation during his tenure by paying its debt to Mitsubishi for a $10 million loan for a power generator despite the fact that he was not a signatory to the contract and that he is still facing a lawsuit until now for his action to seek the funding.

He said the governor has no obligation under the law to ensure that CUC is being managed properly because, as an autonomous agency, the corporation must be free from interference from lawmakers and government officials.

Mr. Guerrero, in a response to the ex-governor’s initial letter, has defended CUC from his allegations of ignorance in administering the government corporation, saying that he should have corrected “perceived deficiencies” during his tenure.

Mr. Tenorio countered the only course left for the governor is to fire his own appointees to the board “But would this governor do that under these circumstances when through the board’s gross neglect, the members are in effect making it easy for his administration to get away with it,” he asked.

Noting that CUC made money during his administration, he said it is now using those revenues to “subsidize” the present government.

Aside from the $12 million debt, Mr. Tenorio also harped on CUC’s position that the Dynasty should not be given a discounted power rate because it is not a non-profit organization like the Voice of America station on Tinian which is only paying the residential rate of 11 cents per kilowatt-hour.

“VOA may be a government agency, but it is managed and operated by a private firm which is responsible for its utility bill… Regardless, I still say that if any customer deserves a similar discount rate, Tinian Dynasty is it,” he said.