29 July 2012

Fitial actions worry Tinian ship recycling investor:

Gov. Benigno R. Fitial met with U.S. Office of Insular Affairs director Nik Pula and First International Corp. consultant retired U.S. Navy Rear Adm. Christopher Weaver in Washington, D.C. last week on a planned Tinian ship recycling project, but FIC and other local officials are now raising concerns that a contract may be awarded to another firm despite the CNMI government's assurances of support to FIC for months.

Other sources said the administration may favor a Chicago-based company, and not FIC.

The governor won't be back until later this week. The administration said yesterday that this was the first time it became aware of FIC's letter to CNMI officials.

Paul Slater, chairman and chief executive officer of FIC, wrote to CNMI officials on Tuesday, expressing his disappointment and surprise with what transpired last week in Washington, D.C.

That meeting was attended by Fitial, his counsel Jim Stump, Pula, OIA's Keith Aughenbaugh, and Weaver.

“In the meeting of last week at the OIA, representations were made that the CNMI government didn't understand the MOU [memorandum of understanding] and could not agree to something they did not understand,” Slater said.

He said FIC is confused by this position since 1) The MOU has been in CNMI/Commonwealth Ports Authority's hands since March and no objections or questions were brought forward; and 2) The proposed MOU was discussed in the CNMI/Tinian/CPA meetings of June 22 and 23, and agreed to on June 23 by Stump.

Slater said that CPA offered its support for the undertaking but that it lacked the resources to repair the Tinian Harbor.

“FIC seeks clear guidance on CNMI/Tinian/CPA's desires for the way ahead. FIC felt this way ahead was clearly defined as a consequence of the June meetings on Saipan and Tinian, and was disappointed and surprised to be told in last week's meetings that CNMI had questions and reservations regarding the proposal, but intended to issue an RFP for the Tinian harbor repairs and proceed with the work without any agreement with FIC to manage the project or have an operator to run the ship recycling business,” Slater said.

Senate Vice President Jude Hofschneider (R-Tinian), when asked for comment, said all parties need to come to the table once again, given the confusion and shifting positions others may have on the issue.

“The Tinian leadership would like to have that meeting as soon as possible. I believe that's the best thing to do. My understanding was, based on meeting by all parties involved just last month, that the government is entering into an agreement with FIC, unless there's something that already transpired that we can no longer undo,” Hofschneider told Saipan Tribune.

Slater said FIC began working on this ship recycling project in 2010, visiting Guam and then Saipan and Tinian in 2011.

“We met several times with the U.S. Maritime Administration in Washington and succeeded in getting written clarification from the Maritime Administrator David Matsuda in April 2011, that the islands of the CNMI were legislatively approved locations for ship recycling as part of Public Law 110-417-Oct.14, 2008,” he said.

Slater said FIC fully advised the CPA executive director of these facts in response to his March 21, 2011, letter.

“We met with the Office of Insular Affairs in Washington in Feb[ruary] 2012 and discussed funding for the project, having sent them a White Paper fully describing it. We were given to understand that funding for the harbor repairs could be available and we relayed these facts to Gov. Fitial at a meeting during his visit to Washington for the US Governor's conference at the end of Feb[ruary] 2012,” he added.

He also attached an MOU that he said Fitial suggested that FIC submit to the CNMI and CPA after his and Weaver's meeting with the governor in Washington, D.C. in February 2012.

The MOU was submitted to CPA in March, and CPA acknowledged receipt and confirmed that it would be forwarded to the CPA executive director and CPA board.

On April 9, Slater said, FIC was advised that the CPA board had reviewed the MOU and referred it to their legal counsel to draft a response. On April 16, CPA executive director Edward M. Deleon Guerrero wrote a letter, posing no objections to the proposed arrangement and encouraged FIC to pursue business opportunities on Tinian, said Slater.

However, CPA said it has no resources to undertake the repairs to Tinian Harbor that would be prerequisite to introducing a ship recycling industry to the CNMI.

This was discussed in a meeting with Fitial, CPA, Pula, and Tinian leaders on Saipan last month. Slater said Pula confirmed at the time that funding for the harbor repairs was available.

“As a result of these meetings FIC advised the Indian operators that the funding for the harbor repairs was now available and the MOU between FIC and the CNMI/CPA had been agreed. The Indians stated that when the final MOU was signed they would sign an MOU with FIC in the form that they had agreed, and plan on visiting Tinian very soon to finalize all the operating issues,” he added.

Don Farrell from the Tinian Mayor's Office said when Tinian officials left the Senate chamber in June, “we were all under the impression that Governor Fitial was in full support of the project.”

Source: Saipan Tribune. By Haidee V. Eugenio., 26 July 2012

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