Guam – The Guam Economic Development Authority has ceased negotiations with the Bank of Guam for the renovations of the Guam Memorial Hospital’s maternity ward, but GEDA Administrator Jay Rojas says it should not delay the project by much longer.
In a release issued late yesterday, GEDA announced that they are now working with the USDA to waive the requirement for interim financing for the hospital’s labor and delivery ward.
The release says they were in the thick of negotiations when, according to GEDA, the Bank of Guam began requesting terms that do not comply with the law that authorizes the financing. This is despite a guaranteed loan payout through the USDA which required the interim financing.
Essentially, Rojas explains, the USDA had already agreed to fund the maternity ward project, but required that GovGuam get a loan first.
“Bank of Guam wanted us to put assurances on the sole amount of the full four percent of the BPT which, in that law, for the specific borrowing, we couldn’t guarantee because it wasn’t authorized in the borrowing to this loan in particular,” explained Rojas. “The bank or the respondent was actually looking at a potential of risk and risk management and tried to compensate for that. So they would have raised the rate for the interim financing, which they did. So that should have secured the loan on its own. But we tried three times to be able to get the Bank of Guam to help us be in compliance with the law and they just came back saying the language needed to stay in the contract. So that’s why we had to pull the plug.”
Rojas pointed out that there was little to no risk for the Bank of Guam since the loan had been guaranteed through the USDA after three years.
At this point, Rojas says they are requesting the USDA to allow GovGuam to move forward with the renovation project without the interim financing requirement.
“We’re not really nervous. It’s just that we had to share the news. There’s one road block that we had to roll over,” said Rojas.
Bank of Guam did not respond to our request for comment as of news time.