VIDEO: Senator Tom Ada Concerned Momentum to Repair Damaged Wharf “Lagging”

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Guam – Senator Tom Ada is concerned that the momentum to repair the damaged F-5 wharf is “lagging” and he sent a letter to Port GM Joanne Brown ask about the status of the loan to make those repairs and find out how its going to be paid for.

Senator Ada, whose Comittee has Port oversight,  told PNC News that he understands that a $10-million dollar loan has already been tentatively approved by the Bank of Guam, but it was not made clear during last week’s Port informational hearing, how the loan would be paid back. 

“It was unclear if the project would be funded from current revenues or from new revenues generated by an increase in the Port’s tariffs,” said the Senator.

Ada points out that the repair work is “very critical to the sustainability of the Port’s operations” and  if the plan is to repay the loan by raising rates, the Public Utilities Commission [PUC] will have to approve and in his letter to the Port GM, the Senator asks when the Port plans to file a rate increase petition with the PUC.

“Considering the processes involved in increasing a rate, it will take approximately 120-days to implement a new tariff,” says the Senator adding “if the loan is to be repaid by reducing operational expenses, the Port would need to identify about $1 million in annual operating expenses to cut.”

Senator Ada is asking the Port to provide its response to his questions no later than Monday, March 25.

READ the release from Senator Ada below:

Senator Tom Ada Asks Port How It Intends To Pay for $10M Loan.

On March 11, 2013, Senator Tom Ada wrote a follow up letter to the General Manager of the Port Authority of Guam (PAG) to obtain clarification on how the PAG intends to finance the Marine Service Life Extension (MSLE) work on the F-5 Wharf.

In February 2012, Senator Ada, along with the Governor of Guam, PAG management and Members of the PAG Board of Directors traveled to Washington D.C. to meet with the Maritime Administration (MARAD) to pursue a balanced approach to the PAG Modernization Program, and to address accelerating deterioration of the F-5 Wharf structure and the potential adverse impacts to sustainable operations, facility insurability and service life expectations.

Senator Ada states, “It now appears that the momentum is lagging; a situation that is of great concern to me.”

During the March 5, 2013 Information Briefing, it was unclear how the Port intended to finance the MSLE work on the F-5 Wharf. “More specifically, it was unclear if the project would be funded from current revenues or from new revenues generated by an increase in the Port’s tariffs,” said Senator Ada.

If the loan is to be repaid by increasing the PAG’s tariffs, Senator Ada is also asking when the PAG plans to file a rate increase petition with the Public Utilities Commission. “Considering the processes involved in increasing a rate, it will take approximately 120-days to implement a new tariff,” said Senator Ada. “Alternatively, if the loan is to be repaid by reducing operational expenses, the Port would need to identify about $1 million in annual operating expenses to cut”, added Senator Ada.

The repair of the F-5 Wharf is very critical to the sustainability of the Port’s operations.

Ensuring that the wharf is capable of supporting the loading and unloading of cargo is imperative considering 90% of the island’s commodities are brought to Guam through the Wharf,” said Senator Ada.

Senator Ada asked the Port to provide its response no later than Monday, March 25, 2013.