U.S. PORTS WORRY ABOUT INCREASED SECURITY COSTS

U.S. PORTS WORRY ABOUT INCREASED SECURITY COSTS    While Congress works out the future rules for maritime security, the nation’s seaports worry about how much it will cost to implement them.
   “The extraordinarily high cost of security, if it had to be borne solely by the ports, will put many of us out of business,” said Frederick R. Ferrin, executive director for the Jacksonville Port Authority in Florida, to members of the House Subcommittee on Coast Guard and Maritime Transportation Thursday.
   “If we try to pass those costs on to our customers, the carriers, shippers and terminal operators, they will vote with their wake, potentially moving their business to ports outside the U.S. in Canada and Mexico,” Ferrin added.
   The Maritime Administration and Coast Guard, through the Transportation Security Agency, will administer $93.3-million Port Security Grants Program to help “critical” national seaports improve security. The applications for the grants are due from the ports by March 27. A selection board from MarAd and Coast Guard will “base the awards on consideration of the most urgent needs from a homeland security perspective,” said Capt. William G. Schubert, head of MarAd. The grants are expected to be awarded in June.
   However, port officials don’t think the $93.3-million grant program goes far enough, especially if many ports are expected to apply. According to a recent American Association of Port Authorities’ survey, 52 public port agencies intend to apply for the port security grants.
   “These ports expect to request $222.8 million to secure ports as a result of this new terrorist threat,” said Richard Steinke, executive director for the Port of Long Beach in California, and chairman of the AAPA. “This far exceeds the $93.3 million appropriated by Congress for this program … The grant applications proposed by individual ports will range from $100,000 to $50 million, with half of the respondents indicating that they intend to request grants of $1 million or more.”
   The AAPA estimates that recommended port security enhancements could reach as high as $2.2 billion. Or as the Interagency Commission on Crime and Security at U.S. Seaports reported in late 2000, security costs could range from $12 million to $50 million per port.
   For example, the Port of Jacksonville, as part of the state’s 14-port Florida SeaPort Security Act, faces a one-time $6.5-million cost to improve its security infrastructure. It’s estimated that the port would have to spend $4.4 million a year for the security upkeep.
   “It is imperative that the federal government and the states work in close cooperation to provide ports with desperately needed funding, for both capital and operations expenses incurred in order to insure port security and national safety,” Ferrin said. “The alternative will unfortunately be financial disaster for many ports and do irreparable damage to their region’s economy.”
   Some port officials believe the government should find sustained ways within its budget to help ports pay for security programs.
   “Congress should create a dedicated funding mechanism for port and intermodal cargo security requirements, based on existing revenue streams such as a set portion of U.S. Customs’ duties,” said Paul F. Richardson, president of Paul F. Richardson Associates on behalf of the U.S. Maritime Association, Pacific Maritime Association, and National Association of Waterfront Employers.
'    “Such a mechanism is broad-based and borne by the public — those consumers and producers who benefit from the development and continued long term expansion of the ocean borne intermodal transportation system,” Richardson said.