Guam News - Guam News
Senator Ada Chairs the Legislature's Transportation Committee.The Oversight Hearing is scheduled for this THURSDAY, August 9th at 5:30 in the Legislatures hearing room.
He is concerned about the Cementon's lease on the Port's parcel 3-1, and Parcel 3, known as Hotel Wharf.
In a release, Ada notes that both properties "have excellent revenue generating potential" but the Port hasn't been able to turn that potential into reality.
He asks 2 questions:
1. In its capacity as the Landlord, what actions is the Port taking to resolve obstacles preventing the commencement of operations by Cementon
2. What course of action will the Port take to generate revenue from Parcel 3?
The release quotes the Senator as saying: "It is imperative that the Port operates efficiently and maximizes its revenue potential, as tariff increases will result in an increase in the cost of household goods for all of us.”
READ Senator Ada's release in FULL below:
SENATOR TOM ADA CALLS OVERSIGHT HEARING ON THE PORT AUTHORITY OF GUAM
Hagåtña, Guam (August 7, 2012): Senator Tom Ada has scheduled an Oversight Hearing on the Port Authority of Guam, to be held on Thursday, August 9, 2012, at 5:30pm in the Public Hearing Room of I Liheslaturan Guahan.
The Oversight Hearing will address issues and concerns relative to the development of Parcel 3-1, currently leased by Cementon Micronesia, LLC and Parcel 3, also known as “Hotel Wharf”.
Senator Tom Ada states, “These two property parcels have excellent revenue generating potential; however, it seems that the Port has had difficulty in realizing this potential. Why?” Parcel 3, a wharf, has not generated revenue for more than a decade. Furthermore, Cementon Micronesia, LLC, the Lessee of Parcel 3-1, has constructed a cement facility, a project that cost approximately twenty million dollars ($20,000,000), but has been unable to commence operations. Senator Tom Ada states, “I have two questions: (1) In its capacity as the Landlord, what actions is the Port taking to
resolve obstacles preventing the commencement of operations by Cementon, and (2) What course of action will the Port take to generate revenue from Parcel 3?”
Such issues are concerning as the Port Authority of Guam is slated to undergo significant capital improvements, such as the repairs of its wharfs, implementation of the Port Master Plan and replacement of critical cargo handling equipment, an endeavor that will cost approximately $60 million dollars. Ultimately, such investments will require the Port to increase its revenues to service the associated debt that will have to be taken out.
Generally, the Port can enhance its revenue capacity by maximizing the revenue potential of its real estate assets, reducing operating expenses or increasing its tariffs.
Senator Tom Ada states, “It is imperative that the Port operates efficiently and maximizes its revenue potential, as tariff increases will result in an increase in the cost of household goods for all of us.”
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