CPA files emergency regulations on tariff rates

An emergency regulation that imposes new tariff rates in local seaports was filed by the Commonwealth Ports Authority in an effort to fast track the implementation of increased rates.

In a 10-page document published last Jan. 28, the agency indicated the immediate need to enforce the 90-percent hike on all seaport fees to avoid the adverse effect of “management takeover” at the agency.

It cited that current loan balance of CPA and its at risk default of $35 million.

“Any further delay in cost recovery for any rates or fees would threaten the public welfare with the specter of a default and acceleration of the balance of approximately $35 million due and/or a takeover in management of the Saipan seaport resulting in even more increased fees, more detrimental to the public,” the regulation stated.

Last Jan. 14, the CPA board approved the recommended hike. However, stakeholders had requested a delay of its implementation citing the cycle of shipping schedules.

An emergency regulation becomes effective immediately upon filing with the Commonwealth Register and delivery to the governor. It is also exempted to the commenting period as required in any regulation.

“These rules and regulations provide for the immediate increase fees that will allow CPA to generate sufficient revenue to maintain the 1.25 percent revenue-to-bond payment ratio at all times for the duration of the bond,” the regulation stated.

CPA is compelled by its bond indenture agreement with the Bank of Guam for the seaport revenue bonds to pledge its revenue from its operations toward debt service.

Yesterday, CPA executive director Efrain Camacho revealed that seaport rates had not been adjusted for the last five years. He added that analysis of the most recent seaport financial condition forced a 90-percent hike in the terminal tariff to meet the requirements of the bond indenture.

Though disappointed, Camacho said stakeholders understand the CPA’s situation.

Saipan Tribune learned that in 1998 and 2005, CPA and Bank of Guam—as the bond trustee—signed the seaport revenue bonds committing CPA’s revenue to service the principal and interest in return for financing for the seaport construction and renovation.

The bond agreement requires CPA to have sufficient revenue to service the debt.

Fiscal Year 2007 audit of CPA disclosed that the agency’s debt service ratio is .843 and so CPA must immediately implemented cost recovery measures.

‘New rates’

CPA’s terminal tariff effective last Wednesday included wharfage of $11.40 per revenue ton for all cargo other than liquefied petroleum products off-loaded or on-loaded by pipeline; and $8.55 per revenue ton for liquid petroleum products which includes gasoline, diesel, bunkers, and other liquid petroleum products.

Limitations are also provided to the ocean bill-of-lading transshipments which sets a minimum $2.38 per revenue ton if the final destination of the cargo is a port within the CNMI.

Except for military and government-owned vessels, a port entry fee is collected. These include $220.40 for vessels of 1,000 registered gross tons or less; $438.90 for those between 1,001 and 2,000 registered gross ton and up.

The CPA declares that the commercial docks and wharves of the CNMI are intended for active loading and unloading vessels.

The regulation also declared a bunker fee of $0.86 per barrel for residual oil and $1.43 per barrel for diesel fuel.

A new rate for the home port fee was also established by the regulation, along with the passenger fee which shall charge $16.76 per person that boards a vessel through any port or harbor.

For the parking fees, a dollar is charged for a minimum of one hour parking at the CPA property, while vehicles with a 25-seat capacity shall pay a monthly fee of $125 per vehicle while $100 for those vehicles less 125 seats.

Taxi cabs are charge $15 monthly until January 2010 and which thereafter will pay $25 per taxi cab.

Seaport tenants who park at the port of Saipan public parking stalls shall also pay an annual fee of $35 per vehicle; while frequent community parking permit fee amounts to $400 annually and $250 semi-annually.