SAIPAN, Northern Marianas Islands — Yesterday, Northern Marianas Governor, Benigno R. Fitial, defended his plan to takeover of the Commonwealth Ports Authority as a necessary measure to preserve the government’s financial integrity.

The ports authority has been in financial trouble for some time and is close to a technical default on the 1998 indenture on its airport bonds. In order to avoid a potential default, Governor Fitial announced last week that the executive branch would assume control of the ports authority under its state of emergency powers.

The House of Representatives voted 18-0 to pass a resolution that firmly disapproves of the Governor’s actions. Representatives claim the Governor’s “state of emergency” powers does not include assisting a “ government agency in repaying a debt.” But Governor Fitial insists that if the default happens, the ports authority would be required to pay the full principal and interest of the bonds. In addition, it is within the Bank of Guam’s authority, as the bond trustee, to issue a default notice and take over the Saipan International Airport.

Governor Fitial’s plan is to place the ports authority under the Governor’s Office for 120 days. But before any reorganization plan can be put into effect, the Legislature must have 60 days to review the proposal including the ability to amend or void it.

For more information, please see:
Saipan Tribune — House questions Fitial’s takeover of CPA — 18 May 2008

Pacific Magazine — ‘Dire Consequences’ Face Northern Marianas Agency — 16 May 2008