CPA now 90 pct. compliance with bond indenture

The head of the Commonwealth Ports Authority disclosed yesterday that the agency is nearing full recovery and compliance with both its seaport and airport bond indenture agreements, saying that CPA’s present debt service ratio is at 1:27.

Executive director Efrain F. Camacho said yesterday this status is a result of the many actions taken by the management since the lifting of the state of emergency last year.

Gov. Benigno R. Fitial placed the agency in a state of emergency in May 2008 after it was found in default of its seaport bond indenture agreement. He threatened a management takeover if the issue is not addressed immediately.

Camacho said that from the .84 debt service ratio last year, CPA posted a significant improvement in meeting its bond requirements.

“We’re very close to full compliance with our bond indentures. From the previous 0.84 debt service ratio, CPA is now at 1:27. I can say that with the improvements made by the agency, we’re more than 90 percent in compliance with the standards,” Camacho told [I]Saipan Tribune[/I].

In January, CPA increased its tariff rates by 90 percent and launched extensive collection efforts in longstanding accounts and receivables.

For the receivables alone, CPA noted a “positive” turn in its cash flow.

Camacho said the newly created model for its management also showed promising results. “It’s a work in progress…and we keep monitoring and watching every aspect of the operation to ensure that all areas and accounts are being assessed,” he said.

Camacho said it’s the vision of the management to continue the progress and avert the same “old problems” from occurring.

The agency brought in a certified public accountant for its comptroller position this year. It also hired a consultant who will solely focus on meeting the bond indenture requirements. It also instituted controls in its accounting records.

“The control that we have now is to make it more efficient…and we’re happy to see that it’s really happening,” he said.

The Federal Aviation Agency recently lowered CPA from high-risk category to moderate risk after CPA partially addressed concerns raised by FAA in previous years’ audit reports.

The federal agency placed CPA in the high-risk category in 2007 due to “questionable administrative costs” in the federal funds provided for airport projects.