21 Apr 2008

Marshall Islanders hopeful of reaching agreement over Kwajalein

1:40 pm on 21 April 2008

One of the most important US military bases in the Northern Pacific could be shut over a rental dispute.

The landowners in the Marshall Islands are demanding an increase of four million US dollars on the current 15 million dollars paid to them annually by the US military for the use of Kwajalein Atoll

But the US says they reached a five-year agreement in 2003 for the 15 million dollars and that no more money would be paid out.

Our correspondent, Giff Johnson, says the US appears to be standing its ground while the landowners seem hopeful.

"This is put up or shut up time, there's eight months left to sort something out and the Marshall Islands side say they're optimistic but the there hasn't really been anything from the US side to indicate why people should feel optimistic."

An escrow account was also set up in 2003 which has now accrued more than 20 million dollars to be paid to the landowners.

But this sum is to be returned to the US Treasury if no agreement is reached.