THE Commonwealth Ports Authority Board of Directors and GPPC Inc. President H. Chieng Tan have signed a settlement agreement resolving all claims and disputes related to a 2009 contract to rehabilitate Francisco C. Ada/Saipan International Airport’s runway that went awry and resulted in litigation.
The lawsuit filed by GPCC in Aug. 2016 involved breach of contract claims related to the contract between CPA and GPPC for Phase 2 of the runway rehabilitation project. GPPC demanded $38.9 million from CPA, in addition to payment for incidental and consequential damages, prejudgment interest, and court costs.
Prior to GPPC’s completion of the project, CPA terminated the contract “for cause.” CPA then completed the scope of work with substitute contractors and submitted claims for compensation from Fidelity & Deposit under a performance bond.
According to a settlement agreement signed on Jan. 23, 2025, the CPA board agreed to pay GPPC $9.75 million, $2 million of which is payable to GPPC on or before Feb. 25, 2025.
For the rest of the amount, CPA will pay GPPC $100,000 per month starting April 1, 2025, until the settlement amount is paid in full.
During its meeting on Wednesday last week, the CPA board agreed to tap the ports authority’s investment account to fund the initial $2 million payment on Feb. 25. The source of the investment account is the Tinian airport divert funds.
CPA and GPPC agreed to “cause the lawsuit and all of the claims, counterclaims and third-party claims pending therein, dismissed through a stipulated voluntary dismissal with prejudice, which shall stipulate that the CNMI Superior Court shall retain jurisdiction over the matter to enforce the terms of the agreement.”
Both parties also agreed that simple interest in the amount of 6% per annum shall accrue on the unpaid balance of the settlement amount. The CPA board likewise agreed to rescind its decision on Sept. 12, 2016, when it terminated the GPPC contract for default.
