PACIFIC ISLANDS REPORT
Pacific Islands Development Program/East-West Center
GUAM UTILITY HOPES COMPACT WILL HELP SALE
By Mark-Alexander Peiper
HAGATNA, Guam (Pacific Daily News, Dec. 19) - The Guam Telephone Authority's general manager believes President Bush's signing of the compact bill will make the agency more "enticing" to potential buyers.
The president yesterday signed into law the bill that could, among other things, forgive $157 million worth of government of Guam debt to the federal government.
GTA General Manager Larry Perez said forgiving the telephone agency's $108 million worth of debt to the U.S. Department of Agriculture for telephone infrastructure could make the agency more appealing to buyers.
Government officials have been trying to sell the utility for years. An attempt to sell last year yielded only one bidder that did not meet all the requirements established under local law.
In hopes of making the telephone agency more attractive, GTA officials have submitted draft legislation in the form of Bill 204 to the Guam Legislature outlining proposed new sale terms.
The new terms are based on solicited ideas from 12 unnamed prospective bidders. The proposed changes include:
·Lowering the current sale price of GTA from $175 million to $130 million;
·Reducing the no-layoff provision from five years to two years; and
·Removing the Legislature from the final process of approving the deal with the buyer.
Perez said the new federal compact-funding act will likely be discussed during today's hearing; however, he noted that the telephone agency is not guaranteed the debt relief as the government of Guam will have to prioritize which debts will be covered.
"But if GTA just so happens to be the top of the priority and our debt gets forgiven, basically what that translates to is that now if GTA goes up for sale the potential buyers will just have to fork out the cash and deposit that into the General Fund," he said.
"As opposed to just paying $30 million cash into the General Fund and then assuming the arduous debt. Now that the debts are gone, that $130 million will be deposited into the General Fund."
Perez said the $130 million would be the minimum sale price for the telephone authority, though that number could increase because the agency will be sold through the competitive bid process.
Speaker Ben Pangelinan, D-Barrigada, has said some sections of Bill 204 are unacceptable, notably the provision to remove the Legislature from the process of approving a GTA buyer.
December 19, 2003
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