Commonwealth Ports Authority


October-19-09 -

CPA 'tentatively' commits to shipyard salvage project

The Commonwealth Ports Authority board approved on Friday a tentative commitment to negotiate a temporary lease agreement with Worldwide Salvage Saipan, which wants to build a shipyard salvage operation at the Port of Saipan.

In his letter to the company’s chief executive officer and president James L. McCollum, CPA board chair Jose Lifoifoi said the board acknowledges the firm’s interest in commercial development at the port site.

Worldwide Salvage wants a long-term lease agreement with CPA for a shipyard salvage business, which aims to bring in old military ships for dismantling.

Before the company can secure a contract with the U.S. military, it needs proof of having secured an agreement for a site for the business.

“I understand that as part of your company’s plan you require this tentative commitment for purposes of your efforts to secure a contract with the federal Maritime Administration Division, MIRAD. You may present this letter for the limited purpose of showing the CPA’s commitment to engage and negotiate into a lease agreement subject to terms,” Lifoifoi said.

He emphasized, however, that CPA at present can only make a tentative and preliminary commitment for the project.

This does not constitute any commitment by CPA except for the preliminary understanding that the agency will consider a lease agreement with the company, he added.

Lifoifoi admitted that the challenges for the company are substantial but CPA has its priority and compelling interest to protect its substantial investment in developing the Port of Saipan.

The company’s vice president for administration, David Sablan, was present during Friday’s CPA board special meeting.

Sablan told Saipan Tribune that CPA’s letter of commitment would be transmitted to its California office so it could begin securing the contract with the federal government.

CPA’s Lifoifoi said they would require clearance and resolution of all issues regarding the company’s proposed business, including prohibition of the storage or placement of discarded or cut-up ship hulls or other metals outside the designated area. The company also needs to assure that any disposal of any metal on any CNMI property is prohibited.

CPA, before it approves a formal lease agreement, will require the establishment of a facility master plan as required by the U.S. Coast Guard under the Maritime Transportation and Security Act.

A pre-approval by the U.S. Environmental Protection Agency for any incinerator or other toxic substance treating facility will also be among the requirements.

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