Port operator price gouging and screwing Rota people for years, lease should be terminated, senator says

Paul Manglona

Paul Manglona believes the Commonwealth government has been overly generous to a company owning the monopoly on the movement of food and other goods into Rota, and that company’s exclusive lease to the Terminal Warehouse Facility of West Dock, Rota should be terminated. In a letter to the chairman and executive director of the Commonwealth Ports Authority, which issued the lease in 1996 to Rota Terminal & Transfer Co., Mr. Manglona said the CPA’s generous arrangements with RT&T were supposed to result in lower prices for the people of Rota.

Instead, the senator wrote, “the shipping costs in Rota have been and continues to be excessively high compared to the shipping costs in Tinian and Saipan.” He referred to a 2009 change to the lease, called Amendment 2, which reduced RT&T’s annual $50,000 lease payment plus 5% of gross revenues to CPA to a $0.50 per revenue ton surcharge.

“It appears that any profit or savings realized by RT&T since Amendment 2 have not been passed on to the consumers in Rota,” Mr. Manglona said.

When Kandit was last in Rota, prices for basic food staples cost anywhere from 100% to 300% of the same products sold in Saipan and Guam. For example, a 50-pound sack of Calrose rice in early 2023 was about $80. A case of chicken cost about $85.

According to the CNMI Department of Commerce’s 2017 Labor Force Survey, the median personal income in Rota was $13,662. That was seven years ago and far before the deleterious effects of the pandemic and the subsequent decimation of tourism.

Newsrooms throughout the CNMI already have reported RT&T’s proposed increases in tariffs – an average of 73% more than what they are now – which will translate into far higher prices for almost everything sold in Rota.

“These price increases are tantamount to price gouging,” Mr. Manglona said. “I completely support Mr. Pedro Q. Dela Cruz, an agent for Seabridge Isla Shipping Company, who is requesting CPA to intervene and delay the implementation of the new tariffs until CPA reviews the lease agreement to determine if RT&T is in compliance with all its terms. I further submit that RT&T is not in compliance with a majority of its lease agreement terms and conditions.”

The CNMI’s Registrar of Corporations already has issued a notice to RT&T that it is delinquent in filing its annual corporation report for tax years 2018 through 2023. The registrar has ordered RT&T not to conduct further business. If RT&T fails to cure its delinquency, the registrar has said she will dissolve the corporation, in compliance with CNMI law.

Mr. Manglona is questioning whether RT&T has even paid taxes during these years, surmising that if RT&T has not filed its corporation reports, and has not had a valid business license since 2020 as reported, then how did the Division of Revenue and Taxation recognize any payments of taxes?

“Moreover, in the past 28 years or so of the lease, RT&T appears to have repeatedly violated and failed to adhere to substantial terms, conditions or requirements of the 1996 Lease Agreement,” Mr. Manglona wrote to Jose Ayuyu and Leo Tudela, the chairman and executive director of CPA, respectively.

In the letter, the senator questioned and provided references to allegations that RT&T has not been in compliance with lease terms including tax filing, casualty insurance, the purchase of equipment, the payments of employee social security, Medicaid, income tax, and worker’s compensation, and even its own utilities bills.

“Does CPA pay for RT&T’s utilities services,” Mr. Manglona asked in his letter. “If RT&T has not paid for RT&T’s utility bills directly to CUC, it would be a violation of the Lease.”

“These are just a few terms and conditions of the 1996 Lease Agreement that RT&T has or may have violated that warrants CPA to review and investigate RT&T’s statements, books and records and demand copies of all pertinent business documents including the current annual corporation reports and business licenses,” Mr. Manglona wrote. “Pursuant to Section 29 of the Lease, CPA may enter the lease premises at any time during the term of the lease for the purpose of determining whether or not RT&T is complying with the lease terms and conditions or any other purpose incidental to the rights of CPA.”

The senator is calling for CPA to do what is within its authority to rid the Commonwealth of RT&T’s monopoly of West Dock, and essentially of their exclusive profits on transporting goods into Rota that the senator alleges are the root cause of the high prices for his people.

“The 1996 Lease Agreement created a shipping monopoly that has price gouged the people since its inception,” the senator wrote, adding that companies in Saipan, Tinian, and Guam “are willing to help the people of Rota but RT&T’s exclusive use of the West Dock in Rota under the 1996 Lease Agreement prohibits any other company from using the West Dock to operate a shipping business.”

“CPA has the chance to correct an egregious shipping monopoly that has strangled the economic progress and prosperity of the people and businesses of Rota,” Mr. Manglona wrote. “We need immediate action from CPA to terminate the exclusive use of the West Dock in Rota and allow other shipping companies to use the West Dock to provide affordable and reliable shipping and stevedoring services to the people of Rota.”


  • Jerry Barcinas

      04/13/2024 at 5:17 AM

    For the most part your main focus here is RT&T. So let’s say you get RT&T out and get your soul source company in to Rota as the replacement, the new company will be monopolizing. Maybe a better plan, is instead of getting rid of RT&T, another cargo handler would set up by RT&T and compete best rates. Their for the people n businesses here on Rota both win, getting best rates. Also, it seems and the overall push her paints a picture of personal interest instead of help for the people. I believe
    The other major issue here you should be pushing is addressing shipping cost aswell, airfare, and no competition for
    Both airport n seaport. I am.very surprised how fast for to put this out to the media instead of sitting down with
    RT&T to establish a dialog and offer assistance to then. Understanding that they are a business to n they have staff n bills to pay. It ain’t fair that you should
    Focus and blame the issues on them. Make it a level playing field per the Governor said. Investigate all, shipping company rates, CPA terminal charges, tariffs, Rota stores and other avenues to come to a happy medium. Now, why is it that when the large cargo ship didn’t arrive for 2 to 3 months on Rota and only the small boats coming in from Saipan n Guam. Why is the Camrose sack of rice same price at all the stores and all the items brought on those small boats. So it clearly shows
    That maybe the issue here isn’t just RT&T but all are in the loop to price gouging. You need to address the issue to the CNM Commerce to regulate or inforce price control. My question here is why only now when the people of Rota have been suffering. The answer is: it’s politics time and let’s now show the people who’s on their side. I’m against anyone, but when it comes to
    Let’s downs, put down to our people and to a local business, then the people
    Speak up. By the way why didn’t you and the senate body make the effort to give a call to Mr. Stan Little, President of Southern Airways to talk and establish a dialog during that though time of Marianas Southern Airways? You and the senate body promised to make that call to save MSA. We waited hours, weeks, months and NO CALL!!!. Fir one n many things, i/we the Rota people don’t see our suppream Rota Leaders
    Sitting down and seeking to help our Major. It seems our Major is working alone n doing all possible on her own to tackle the issues of our Rota Island n its people. Just for the record, RT&T i believe has not changed their rate tariffs since they aquired RT&T. Senator
    Please extend an olive branch or Flores Rosa to RT&T,CPA,Commerce, Store owners and sit down to have a dialog and help the and not shut them all down. So please, work with us, the people of Rota and not just for personal gain.

  • Our people of Rota has been suffering for so long that we need a change in life. When will our economy be better once again that our people would stop suffering for all that debts that we have to encounter. Why does the people in Rota economy has to suffer while other islands economy are lower than ours? Prices have been going up instead of going down and about to be raise again. We the people of Rota had to maintain a job or a double job just to be able to feed or put food on the table for our children as if we’re still in depression Era. This has got to change in our Island!! So many of our people had to move to another island or states just to make a leaving for there family due to our lack of economy and resources we have to deal with that was place on our shoulder. Don’t they realize that we hardly can’t keep up with the prizes along with the job that pays minimum wages that only afford a can of goods just to feed our family of 3 to 5 in a household. This is absurd we need a change in our island.

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