14 May 2008

CNMI's governor places Port Authority under direct control

8:47 am on 14 May 2008

The Governor of the Northern Marianas Benigno Fitial has placed the Commonwealth Ports Authority under his direct control amid a possible bank takeover for violation of bond terms.

The move has suspended the Port Authority's board of directors.

The administration said the move is necessary because the authority's board of directors had been unable to muster a quorum for a special meeting to act on CPA's bond indenture agreement.

The Bank of Guam is the bond trustee.

The CPA is nearing technical default on the 1998 indenture on its airport revenue bonds, and under the agreement if it defaulted, the bank could issue a notice of default and take over.

Governor Fitial says he will issue several directives that will raise CPA rates, impose austerity measures, and end the incentive program for airlines flying to the Northern Marianas.