Wednesday, July 23, 2014

Sanchez: $1.3 Billion For Guam Infrastructure Coming Soon

Guam News - Guam News

Guam - CCU Chairman Simon Sanchez says progress is being made on securing the $1.3 billion dollars required to prepare Guam's aging power, sewer and water infrastructure for the military buildup.


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$740 million dollars will be coming from the Japanese Government via the Japan Bank for International Cooperation [JBIC].

JBIC Officials have been on Guam this past week meeting with DoD officials in an effort to finalize the mechanics of transferring that money to U.S. administration and working out the details of how it will be paid back.

Sanchez got a briefing on the results of those meeting Wednesday morning and he told PNC News "The bottom line is very encouraging. DoD and Japan are making some progress on how the money, that DoD is going to repay, is going to be put into play."

Although millions of dollars is already in the pipeline for on-base projects, no money has been awarded for any projects to help Guam deal with the buildups impact on its already over burdened infrastructure. The $740 million from the Japanese Government would be the first such commitment of funding.

Sanchez said that DoD told him "they are encouraged by the tone and pace of the discussions. They think that they are closer to having some solutions acceptable to Japan and JBIC."

Nothing is finalized and DoD and JBIC Officials will continue to meet in an effort to reach an agreement. But Sanchez says he expects a solution soon, and many of the critical infrastructure project should be underway by the end of next year.

In addition to JBIC's $740 million, another $560 million is required. A total of $1.3 billion.

And its not GovGuam that came up with that figure. Its the U.S. EPA that is requiring it, making the agency an ironic ally in the effort to leverage what Guam needs from the Federal Government.

"The impact of the buildup on our infrastructure has been estimated at $1.3 billion and it is the responsibility of DoD to come up with that money. They're getting some from Japan. They will get the rest from the United States."

"All of those upgrades will benefit all of us," said Sanchez. "It is the One Guam Solution."

The big news now is that the Department of  Defense has accepted that figure,  and accepted that the money will have to come from the Federal Government,  and not from Guam Ratepayers.

"We, the current rate payers," said Sanchez," will not have to pay for the capital costs or the debt service or any loan repayments from that money."

More than half of the $740 million in JBIC money will go towards upgrading the Northern and Hagatna Wasterwater Treatment plants.

"The biggest priority is about $340 million .... to move them not only to primary treatment, but all the way to secondary treatment. The highest form of treatment. This is something that U.S. EPA was going to force GWA to do and force us to pay for it. Now we're going to have the Department of Defense pay for this upgrade."

Sanchez provided the following breakdown of what the $740 million in JBIC funds would pay for:

                                             $740 Million From Japan Bank for International Development

*$340 million to upgrade Northern and Hagatna Wastewater Treatment plants

*$80 million for new wastewater collection lines

*$160 million for power lines

*$160 million on a new northern water system

"The remaining $600 million, that's coming from  ... non Japanese money ... but coming from U.S. money, that's for a whole array of projects that GWA was going to borrow the money for. Now it appears DoD will put all that money in on our behalf, at no cost to us."

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