Port board OKs draft deal with shipyard

PORT: Port Authority of Guam General Manager Rory Respicio speaks during a board meeting Tuesday at the Port's headquarters in Piti. David Castro/The Guam Daily Post

The board of directors at the Port Authority of Guam has approved a draft memorandum of understanding with Guam Shipyard, which would allow the latter to perform in-kind services for the port in lieu of paying off its debts to the PAG. 

"We're all aware the Guam Shipyard has been in active litigation with the Port for moneys it has owed the Port over the years," PAG General Manager Rory Respicio said at Tuesday's meeting with board members. "Instead of having them pay that, we're asking them to do in-kind services to remove the two gantry cranes (and) to remove the barge at F-6."

Respicio said approving the draft MOU could be considered a first step. With the board's approval, he can now ask the Port's legal counsel and the government of Guam chief procurement officer to determine if the draft and board approval is all that's needed, or if approval from the Legislature and governor is necessary. 

Under the MOU, Guam Shipyard is to demolish and dispose of two inoperative ship-to-shore container cranes, or gantry cranes, and to lift, cut and dispose of the port's partially sunken barge in waters adjacent to the F-6 pier. A similar arrangement ended unsuccessfully in October 2016.

Instead, the Port issued a procurement on the barge removal. However, the project did not move forward because the scope of work did not include lifting the barge. Bids also were issued to demolish and remove the cranes but the winning company canceled. 

"Three years later, these Port 'assets' are now a liability and must be removed immediately. We maintain that the proposal submitted by Guam Shipyard is an innovative solution, which does not require any cash outlay," a memo from Respicio to the board stated.  

But the amount of in-kind work would exceed the debt owed to the Port and so there must be some kind of reconciliation, according to Respicio.

The Port also is offering credits the shipyard can levy against any future leases with the Port. The shipyard is amenable to a potential 75% credit, so it would not be dollar-for-dollar, Respicio said. 

The Port did not disclose the estimated cost of in-kind work the shipyard would perform.

"We cannot and should not put those numbers in the MOU because in the event this doesn't go through, this whole thing will go out for bid. And if it goes out for bid, having exposed their numbers, it puts them at an unfair advantage," Respicio said.  

Recommended for you