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Mr. HAYWARD. The status of the Palau lawsuit is two days ago Judge Heffner ruled that the amendment to the constitution was null and void. And I believe, Mr. Chairman, that that is being appealed before the Palau Supreme Court.
Mr. MURTHA. What do we do now? They're running out of money. What do you recommend here?
Mr. HAYWARD. Mr. Chairman, we believe that the best solution is an advance in the form of a loan from Compact funds which are currently in the Treasury. They were appropriated in 1986. We have proposed an amendment to the authorizing and appropriations committees which has been forwarded to the Office of Management and Budget for their review that would allow the Secretary of the Interior to advance up to $3.5 million for this fiscal year from existing Compact funds.
Mr. MURTHA. If this doesn't work, have you looked at reprogramming?
Mr. HAYWARD. We have looked at all other avenues, Mr. Chairman. Reprogramming is difficult. There are not many accounts that can be reprogrammed from, and we believe that this is the best solution for the problem at this time. However, we have not ruled out anything.
Mr. MURTHA. Once this is resolved, where does the money come from then? They have borrowed the money. Then how do you pay back the loan? Do you do that with 1989 funds? What's the solution there?
Mr. HAYWARD. We believe that there would be adequate funds, balance of funds, in the operations account if the Compact came on line in fiscal year 1989 using the appropriated money. Mr. Chairman, Palau currently receives $11.5 million under trust territory appropriations for operations. The first increment of Compact funds avails $18 million to the Republic of Palau. If $3.5 million was advanced to the Republic of Palau from the existing Compact funds, that would give them $14.5 million in this fiscal year, fiscal year 1988. If the Compact came on line in fiscal year 1989, it would give them $14.5 million for operations in fiscal year 1989.
REPORT ON CIP PROJECT DEFICIENCIES Mr. MURTHA. A draft report was recently submitted to the Committee entitled Evaluating Quality Defects of Specific Projects, which involved an examination of the CIP projects in the former trust territory to determine any deficiencies in the program. The total amount that would be needed to address all identified deficiencies according to the draft report is as high as $29.3 million. How do you intend to address the needs identified in that report?
Mr. HAYWARD. First of all, Mr. Chairman, there were some residual funds that were held back from some of the projects from which some corrections can be made.
Secondly, the report also states that a lot of the problems concerning the projects themselves were for lack of routine maintenance to the projects, which are of concern to us, that should have been ongoing by those individual governments.
We have received the report in its final draft, but have not received the final report and have not given official comments.
Mr. MURTHA. Say that again about the maintenance.
Mr. HAYWARD. The condition of many of the projects cited in the Lewis Berger report was due to lack of routine maintenance to those specific projects, which is of concern to us. And, Mr. Chairman, Congress has appropriated in previous years operations and maintenance monies. I believe $12 million was appropriated, and those monies were expended to the governments. But basically there is a routine maintenance problem in the majority of the projects.
Mr. MURTHA. Did they use the money for maintenance and then do a poor job of it? Or did they not use the money for maintenance?
Mr. HAYWARD. Most of the money was used for maintenance, and the money did not cover all maintenance. Some of that money should have been coming out of the regular operations budgets.
Mr. MURTHA. I'm not sure I follow. You are saying that they did not follow the proper procedures for routine maintenance, and that's the problem? Is that what you're saying?
Mr. HAYWARD. On certain projects, yes.
Mr. MURTHA. So, they used the money for maintenance, but they used it in your judgment-
Mr. HAYWARD. Sometimes on different projects also.
On some of the more specific areas, I believe there was a question concerning Palau roads. There are residual monies which are left in the trust territory account of which we are moving forward to correct those particular problems.
Mr. MURTHA. What is the remaining balance of the trust territory construction to be completed? Mr. HAYWARD.
Approximately $43 million. Mr. MURTHA. Will you provide for the record a complete listing of the uncompleted projects and their status?
Mr. HAYWARD. We will be more than happy to, Mr. Chairman. [The information follows:]
OFFICE OF TRANSITION
CAPITAL IMPROVEMENT PROJECTS
Quarter Ending, March 31, 1988
$ 25,000,000 4,717,386
Funds Ava: lable for CIP Projects at 03-31-88:
Net Available for CIP
Partial Funding for TTPI Deficit
Less: Funding for Other TTPI Special Programs
ESTIMATED CIP DEFICIT
NET ESTIMATED CIP DEFICIT
$ 8,248,508 VWvvvvvw
Total Encumbrances, 03-31-88, TTPI Controlled Projects
5,654,875 8,400,000 2,991,469
11 Other TTPI Special Programs:
TOTAL EXPEND I TURES
Republic of the Marshall Islands
Republic of Palau
FEDERATED STATES OF MICRONESIA:
FSM National Government
FSM for Pohnpei State
State of Yap
State of Truk
State of Kosrae
$ 76, 777,417
FY'88 CIP Appropriation
TTPI Controlled Holding Account
OICC Controlled Projects (FY'82 & Prior Years) (Net of Other CIP Projects)