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Telesource says it incurred $1M-plus deficit in ’08
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Posted on Apr 06 2009
Independent power producer Telesource CNMI Inc. said its audited 2008 financial statement shows a revenue loss of more than $1 million and projects a loss of $1.3 million for 2009.
Telesource, which operates the power plant on Tinian, said the existing contract with the Commonwealth Utilities Corp. does not provide the company with incentive to invest any more funds into the island of Tinian, according to a statement from the company.
When Telesource signed the contract with CUC 12 years ago, it was required to invest tens of million of dollars into the future of the island, including upgrading Tinian’s entire power distribution system.
“Telesource has lived up to its commitment,” the statement said. “In return, the parties expected Telesouce to have a reasonable opportunity to receive a modest profit. However, this has never occurred and the result has been unconscionable.”
Individuals from both sides who are no longer with the companies signed the contract, Telesource noted.
During the last four years, new management at Telesource has directed more than $7.5 million dollars in addition to the more than $42 million the company already invested on Tinian, they said.
“These are invested dollars that, under our current contract with CUC will never yield a return,” the statement added.
CUC executive director Antonio Muna was off island yesterday and could not be reached for comment.
Charles Reyes, press secretary for the Governor’s Office, said the Public Utilities Commission must also take note of Telesource’s concerns. PUC sets the rates for the utility agency.
