Guam port authority to restart Matson/Horizon crane negotiations
The Guam government has decided to restart negotiations on a deal that would see two major Jones Act ocean carriers provide the island's commercial port with three refurbished gantry cranes.
Matson Navigation Co. and Horizon Lines, which combined deliver 80 percent of the containerized goods to Guam, grew concerned about the local government's two failed attempts to obtain new cranes, and in early December proposed to 'donate' the three cranes to the port.
Two weeks ago, a letter to the Guam government from Chinese crane maker ZPMC — the sole bidder in two failed crane procurement attempts — put the brakes on the proposed Matson and Horizon deal. A lawyer for the local ZPMC representative, Far East Equipment Co., said in the letter that the Port Authority of Guam should be required to go through the government bidding process for 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.
On Thursday, the PAG received advice from its legal counsel –corroborating a similar position reached by the local General Service Agency — that the port authority can move forward with the Matson/Horizon negotiations.
“As far as our position, we were very clear from the beginning that this is not a procurement process,” said Monte Mesa, chairman of PAG's board, during the Thursday board meeting.
Matson and Horizon, which won the right to purchase the three cranes from the Port of Los Angeles three weeks ago, propose to spend $12 million to $15 million to purchase, refurbish and install the three cranes at the Guam port. Part of the negotiations still to be ironed out include a request by Matson and Horizon that the PAG either reduce or abate port-user fees paid by the two carriers as an offset for the total costs for the cranes.
The PAG board on Thursday named its finance committee head, Joseph Camacho, to lead negotiations with the carriers.
The Guam commercial port operates two nearly 30-year-old gantry cranes that are increasingly prone to mechanical problems and a lack of available repair parts. 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. ' Keith Higginbotham
Guam port authority to restart Matson/Horizon crane negotiations
