Harbor repair plans find Capitol support

Pacific Business News (Honolulu)
Friday, January 18, 2008

Pacific Business News (Honolulu) - by Chad Blair Pacific Business News

Legislators, the Lingle administration and commercial harbor users say there is broad agreement at the Capitol to embark on a costly plan to fix and expand Hawaii's harbors and ports.

Even with the sudden and urgent interest in fixing the University of Hawaii's decaying campuses, work that could cost more than $400 million, no one appears worried that the proposed $842 million Harbors Modernization Plan will get shoved aside or gutted.

"This is badly needed," said Sen. Kalani English, D-E. Maui-Molokai-Lanai. "We haven't done this kind of infrastructure work in probably 75 to 100 years. Maui is beyond capacity, and Oahu will be there in three years."

The harbors plan was introduced by Lingle and legislative leaders on Dec. 18, with the details to be worked out in public hearings during the session, which opened Wednesday.

One major advantage the harbors plan enjoys is that the money to pay for most of the work won't come from the general fund but from tariffs, leases, land rentals and user and wharfage fees paid by businesses. Most businesses that depend on the harbors have said they would gladly pay more if the state improved its ports and expanded room for warehousing and container storage, which would enable them to handle more business.

Mike Formby, deputy director of harbors for the state Department of Transportation, said administration officials are developing a new rate structure to be phased in over several years. The increases will be accompanied by the issuing of revenue bonds, with the debt service and principal repayment also coming out of the harbors' special funds.

Federal funds also will be sought to help pay for the work.

While plans for fixing the ports have been drafted, discussed and shelved since the mid-1990s, the latest initiative was driven by cargo carriers, cruise lines, stevedores, oil and construction companies and other harbor users -- many of them competitors -- who agreed they had to join together to develop one plan and speak with one voice.

Gary North, senior vice president for Matson Navigation Co., was instrumental in forming the Hawaii Harbor Users Group.

"We've all worked very hard since 2005 to bring this to the table," he said. "The reaction from legislators and the administration has been very, very positive."

Worried they would be delayed for years awaiting more state-funded studies, HHUG's members went ahead and paid for the studies of deteriorating conditions at Hawaii's six major harbors. Hiring consultants and surveying officials of big ports around the world, HHUG compiled all of the homework they knew the governor and legislators would need before committing to the project.

Behind closed doors, HHUG leaders also offered blunt assessments about the damage already being done to the Hawaii economy, as well as the costs to consumers, because of the traffic jam of ships and containers at island ports.

English, chairman of the Senate Transportation and International Affairs Committee, said he will make sure smaller harbors are taken care of, as well as the big harbors. Among the projects is $20 million for the harbor at Hana, where the pier has been condemned.

"We are so isolated, yet we have bridges out from an earthquake, new bridges already cracking, and an airport that gets socked in a lot," he said. "I need a harbor facility that works and that can bring in supplies during emergencies and not."

Rep. Scott Nishimoto, D-Kaimuki-Waikiki, is among the Oahu legislators who are convinced of the need to fix the harbors.

"I feel that there is support among my colleagues, the political will to do this," said Nishimoto, vice-chairman of the House Transportation Committee. "When you've got containers just sitting at the docks waiting for trucks to pick them up, but there's not enough space, it's really not good for the economy."

About 80 percent of all commercial goods are imported to the state, and almost everything that's imported comes by ship.

If harbor upgrades are not made soon, state officials say the cost of food, household goods and furniture could rise 18 percent by 2030. Meantime, with a growing population, cargo container volume is forecast to increase by as much as 93 percent by 2020.

The only harbor project that has a development plan is the former Kapalama Military Reservation off Sand Island Access Road. That's where construction of a container deep-draft wharf with berthing capacity to accommodate two container barges will occur.

North agrees that Kapalama is a priority, as is Kahului, Hawaii's third-busiest port, where dock space has been further pinched by the Hawaii Superferry, which is a member of HHUG.

Kalaeloa Harbor in West Oahu, the state's second-busiest port after Honolulu, also is a top priority. A dedicated fuel pier and utilities infrastructure are planned.

If approved by the Legislature this year, the harbor improvements are expected to be completed by 2014.

Hawaii harbors modernization plan

Kahului Harbor (Maui): $345.1 million
Honolulu Harbor (Oahu): $257.3 million
Kalaeloa Harbor (Oahu): $57.9 million
Hilo Harbor (Big Island): $61.4 million
Kawaihae Harbor (Big Island): $87.8 million
Nawiliwili Harbor (Kauai): $10.3 million

Source: Hawaii Department of Transportation

cblair@bizjournals.com | 955-8036

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Original article URL: http://pacific.bizjournals.com/pacific/stories/2008/01/21/story1.html

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