"…it is most appropriate that our government manages its own fuel farm for the benefit of our people"

June 13, 2007

The Kaselehlie Press

(Pohnpei, FSM) - The ancient concept of "Divide el Impera", or "Divide and Conquer" has long been practiced by military leaders and negotiators who want to win. Mobil Oil Micronesia, Incorporated (MOMI) had nothing to do with it, but the "opposition" seems at least on the face of things to be dividing itself.

In his January 27, 2006 State of the State address Governor Johnny David said, "A major problem that we need to deal with is the rising cost of fuel. Pohnpei State is a member of the FSM fuel task force. Our efforts in this area will be in concert with others in this nation."

In a May 16 letter to the Speaker of the 6th Pohnpei Legislature, Senator Nelson N. Pelep, Governor David announced his appointments to a new Pohnpei Fuel Task Force. The Governor appointed Lt. Governor Jack E. Yakana to be the Chairman. Other committee members include State Planning Advisor Hubert Yamada, Acting Attorney General L.M. Bacalando, Jr., Director of Treasury and Administration Finley S. Perman, and Budget Officer Semensin James. The Task Force is already working to find a way to fund the purchase of the Fuel Farm in Dekehtik, Pohnpei. Pohnpei Utilities Corporation, the State's largest consumer of fuel did not have a representative appointed. Governor David did invite the Legislature to make two additional nominations to the task force. Due to a very crowded schedule during the graduation week, Speaker Pelep was not available to tell The Kaselehlie Press who they would appoint to the Task Force.

Pohnpei State wants to own the fuel farm in Pohnpei. Governor David said in his letter, "I am concerned that under a FSM entity Pohnpei State's specific interests will be superseded by the general interests of the three fuel farms under one management. I believe that fuel management is an important matter that must be directly managed by one government rather than grouped with other governments….The area that we need a joint arrangement is the supplying of fuel for the three groups under one arrangement because it is cost effective."

Lt. Governor Jack Yakana, in a quick interview in his office said that if Pohnpei State owns the facilities it would allow the State to lease the facility to a professional operator so that they could make some money from the operation of the fuel farm.

The national government has its own plans for the fuel farms. FSM President Mori said in a letter to Speaker Isaac Figir that the negotiations with MOMI "have now advanced to the stage where a purchase of MOMI's assets on behalf of the FSM is a realistic possibility, with a formal offer from MOMI having been received and a counter-offer on behalf of the FSM having been tendered." President Mori announced in the letter his intention to dissolve the current ad hoc Fuel Task Force in preference of a new corporation requiring full time management that will be able to exercise "ownership and control over the assets at closing."

He announced that he was appointing, "…Mr. Peter M. Christian to head the transition from the Fuel Task Force to the new fuel corporation, both as interim FTF chairman and as my advance nomination to the Board of Directors of the new corporation."

Lt. GovernorYakana said that the Pohnpei State Government has no problem with Mr. Christian and that it might actually be good to have a Pohnpeian on the National FTF but that he felt there was a problem with President Mori simply making an appointment. "We have a problem with the process."

Lt. Governor Yakana was a signator to the Economic Policy Implementation Council (EPIC) resolutions calling for a national purchase of the fuel farms which according to those resolutions was supposed to have been accomplished by May 10. Governor

David said in his letter that June 30 is now the deadline for the FSM to decide on the disposition of the fuel farms in the FSM. A cloud of rumors has been circulating around what have been very tightly guarded negotiations between MOMI, and the FTF. Now the new Pohnpei Joint Commission has been added to the mix. MOMI, requires confidentiality on their negotiations, along with the details of individual agreements they make with retail and government consumers of fuel. The National Government has been concerned that giving too much information may jeopardize their negotiations with MOMI. One of the rumors circulating is that Governor David made the move for a new task force because he is trying to set himself up for retirement which, at least on the Government front will come with the election of a new Governor in November. The rumor mill also says that Governor David wants Tan Holdings or Luen Thai to lease and run the fuel farm if the State Government obtains that asset and that he would somehow benefit from an arrangement with them. Governor David was unavailable for comment but Lt. Governor Yakana, chair of the Joint Committee on Fuel emphatically said that neither of the rumors is true. He said that not only are there no plans for any particular firm to run the Fuel Farm on Pohnpei's behalf but that Governor David wouldn't personally benefit from any arrangement with any company. "I know him personally and I would be very surprised if he would do anything like that. I know the man."