GUAM COMMISSION CONCERNED OVER FUNDING FOR UPGRADES

admin's picture

HAGATNA, Guam (Pacific Daily News, Aug 15) – Guam needs as much as US$800 million to beef up its power and water infrastructure to accommodate the proposed military buildup, but so far the only funding that appears to be available to the island is in the form of long-term loans, facilitated by the Japanese government.

Most of the US$10 billion cost of transferring 8,000 U.S. Marines from Okinawa to Guam will be paid by Japan, either in cash or financing, including as much as US$740 million in financing for infrastructure improvements, through "special purpose entities."

Special purpose entities are similar to the current "build-operate-transfer" scheme used by Guam Power Authority, in which a private company pays to build and operate a new power plant, and power customers pay for the new power plant over 20 or 30 years.

"That's what's emerging -- (Department of Defense) is expecting to get free money for all of its needs, and Guam is expected to pay," said Simon Sanchez, chairman of the Consolidated Commission on Utilities. "It's not fair for the buildup to have Congress give free money to DOD and not give any money to Guam."

Sanchez said the military is scheduled to receive as much as US$9 billion in "free" money from Japan or the U.S. Congress to pay for the move, but the needed utility upgrades would be funded by local residents.

While Guam is already paying to improve its infrastructure, the transfer of military personnel and their families mean projects need to be accelerated and expanded -- additional costs that Sanchez said should be paid by the military.

Retired Maj. Gen. David Bice, who is in charge of the local military office that will facilitate the military buildup on Guam, on Monday gave a congressional subcommittee a breakdown of Japan's proposed US$6 billion contribution to the Marine move:

US$2.8 billion in direct funding (cash), for operational facilities, such as headquarters buildings, mess halls, barracks and quality-of-life facilities;

US$2.55 billion in "special purpose entities," to build 3,500 homes; and

US$740 million in special purpose entities for utilities to support the military move, including power, water, wastewater and solid waste costs.

It is unclear how much of the infrastructure money can be spent for off-base utility improvements, Sanchez said, adding that port improvements are a clear example of spending that needs to happen off-base.

And it does not make sense for the military to invest in separate power and water systems, Sanchez said, because it would be much cheaper to improve existing private utilities and have the military as a customer.

If the military shares utility systems as local officials have proposed, then it would cost about US$800 million to make needed improvements, Sanchez said, including accelerated existing water and sewer projects.

Rate this article: 
No votes yet

Add new comment