Matson, Horizon offer to buy gantry cranes for Guam port
Two major Jones Act shipping lines, concerned with failed governmental attempts to replace aging port equipment at the commercial port on Guam, are offering to provide and install three used gantry cranes.
Oakland, Calif.-based Matson Navigation and Charlotte, N.C.-based Horizon Lines made the offer — worth an estimated $12 million to $15 million — following the Guam government's latest rejection of a sole bidder in its efforts to purchase two new gantry cranes for the port. Maintenance for the port's current cranes, which are 24 and 28 years old, is becoming increasingly difficulty. A lack of new cranes could create a bottleneck for a U.S. military transfer of personnel and facilities to Guam from Okinawa set to begin in 2010. Cargo volumes through the Guam port are expected to triple during and after the buildup.
In return for picking up the tab for the three refurbished cranes, the two shipping lines are asking that the cranes be used at the Guam port for at least five years. The firms are also asking that their gantry-crane costs be offset with Port Authority of Guam user fees. Future negotiations would be required to set the cost offsetting.
The Guam government has made several attempts to purchase new cranes, with the most recent effort being stymied by the government's own General Service Agency. The Guam GSA found that the sole bidder in the most recent 10-month-long bidding process, Shanghai-based crane maker ZPMC, did not meet certain criteria in the bid and went $2 million over the port's budget of $14 million for the cranes. ZPMC has said it needed to pass along higher manufacturing and shipping costs, mainly due to the world price on steel and fuel, which have developed in the past 10 months.
Matson and Horizon officials are expected to formally approve the offer at separate board meetings in the next week. The carriers indicated they needed a quick response from the Guam government as bids for the three cranes, now owned by and located in the Port of Los Angeles, are due by Dec. 18.
While Guam port officials appeared ready to entertain the offer, they have yet to formally accept it.
Matson, Horizon offer to buy gantry cranes for Guam port
