Overview:
Koror State is expected to receive about $29.1 million and gain an expanded Ice Box Park under the Malakal port agreement, but Gov. Eyos Rudimch says the bigger question is how to make the benefits last for future generations.
By: L.N. Reklai
KOROR, Palau (Sept. 9, 2026) — “We had $25 million before and it was gone in four years. This money for the port is not a lot,” Koror Gov. Eyos Rudimch said, stressing that the state must take a more disciplined approach to managing the approximately $29.1 million it expects to receive under an agreement transferring Malakal port to the Palau national government.
Rudimch said he wants Koror State to use the proceeds carefully, working with the Koror State Legislature to address immediate needs while investing most of the money to provide long-term benefits for the state and its people.
“We had $25 million before and it was wiped out in four years because of COVID,” Rudimch said. “I am worried about this and want to make sure the funds are managed well for the future of Koror.”
Rudimch signed the agreement transferring ownership of Malakal port and adjacent areas totaling about 47,000 square meters to the national government.
The transfer is intended to comply with Sections 321 and 322(b) of the Compact of Free Association between Palau and the United States, which require Palau to make designated defense sites, including the Malakal Port Defense Site in Koror, available for joint, exclusive and nonexclusive use.
Under the arrangement, the United States is expected to repair and improve the port, which will be jointly used by the U.S. military and the Palau government.
Of the approximately 47,000-square-meter area covered by the agreement, 42,961 square meters will be designated for joint use, 975 square meters for exclusive U.S. use and 3,209 square meters for nonexclusive use.
In exchange for the transfer, Koror State is expected to receive approximately $29.1 million, Rudimch confirmed.
The agreement also provides for Koror State to receive Ice Box Park, including its ponds and waterfront, as well as about 22,300 square meters of filled land that will expand the park area.
For Rudimch, the value of the arrangement will depend not only on the payment but also on how the proceeds and other benefits are managed over time.
He emphasized that $29.1 million is not an amount that can simply be spent without a plan, particularly given the state’s experience with previous funds that were depleted within several years.
Rudimch said he wants Koror State to take care of necessary priorities but invest the bulk of the money so it can continue benefiting the state in the future.
The agreement also allows Koror State and the national government to revisit its payment terms in the 25th year.
Asked whether that provision could leave room for future negotiations, Rudimch said he believes it opens the door for the two governments to discuss the arrangement again.
He said the funds have not yet been received. The land transfer process must first be completed before payment is issued to Koror State.
The agreement gives Koror State an immediate financial payment, additional park land and the prospect of improvements to a key port facility. But Rudimch said the larger challenge will be ensuring that the money is managed prudently and produces lasting benefits for Koror and future generations.