Matson/Horizon crane deal with Guam on hold following ZPMC protest

Matson/Horizon crane deal with Guam on hold following ZPMC protest A letter from Chinese crane maker ZPMC to the Guam government has put the brakes on a proposed deal that would see two major Jones Act ocean carriers provide the island's commercial port with three refurbished gantry cranes.
   Officials for the Port Authority of Guam on Thursday had planned to move forward with the procurement of the three cranes from Matson Navigation and Horizon Lines until the ZPMC letter came to light during the PAG meeting. A lawyer for the local ZPMC representative, Far East Equipment Co., said in the letter that the PAG should be required to go through the government bidding process for the three cranes.
   The PAG has twice tried to bid out a contract for two new gantry cranes. In both bidding processes ZPMC was the sole bidder, but the PAG decided both times not to award the contract.
   Matson and Horizon, which deliver 80 percent of the containerized goods to Guam, reportedly grew concerned about the faltering process to obtain new cranes and earlier this month proposed to 'donate' three refurbished gantry cranes to the port. The two lines, which won the right to purchase the three cranes from the Port of Los Angeles two weeks ago, propose to spend from $12 million to $15 million to purchase, refurbish and install the three cranes at the Guam port. They are asking that the PAG to either reduce or abate the two carrier's port user fees to offset the total costs for the cranes.
   The PAG currently operates two nearly 30-year-old gantry cranes at the island's port. The two ocean carriers believe there is a critical need for new cranes to prevent a backlog of material when the U.S. military begins shifting its operations on Okinawa, Japan to Guam in July 2010. Cargo volumes through the Guam port during and after the transfer are expected to rise by as much as six times.
   The ZPMC letter, addressed to the Guam government's General Services Agency, protested the PAG license agreement with Matson and Horizon over the three cranes. The crane maker filed a first protest letter with the GSA on Nov. 29 following the second bid rejection for the new cranes.
   Following the revelation of the second ZPMC letter on Thursday, the PAG put the deal with Matson and Horizon on hold pending a review of the ZPMC protest by GSA legal staff. The PAG has asked the GSA to clarify the issue and Guam Governor Felix Camacho's office said that the governor was confident that the matter would be dealt with appropriately. ' Keith Higginbotham