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By Giff Johnson

MAJURO, Marshall Islands (Marianas Variety, July 4) —The recent rejection of a floating drydock project in the Marshall Islands is a major blow to Ching Fu Shipbuilding Co. Ltd. of Taiwan, which had picked the location as the most suitable for the football field-size facility that aims to service the large number of Taiwanese and other purse seine fishing vessels in the region.

The Marshall Islands Environmental Protection Authority turned down the company’s plan to locate a nearly $20 million floating dry-dock in the urban center of its capital city, saying the location is not appropriate.

The Marshall Islands is one of six Pacific nations that have diplomatic ties with Taiwan.

Aside from it being the biggest-ever foreign investment proposed for this nation of 55,000, proponents said it would annually generate more than $11 million in revenues to the country, about 11 percent of the gross domestic product.

The government’s port authority had already signed a land lease giving Ching Fu access to land adjacent to the proposed location, and in his state of the nation address last January, Marshall Islands President Kessai Note told the country that the Taiwan dry-dock would be in Majuro by May this year.

But government officials didn’t count on Ching Fu’s plan generating vehement opposition from nearby hotel operators and residents who argued against it being located in the urban and commercial center of Majuro.

The opposition forced the government’s Environmental Protection Authority in March, some nine months after the plan to bring the dry-dock to Majuro was first announced, to tell Ching Fu that it had to file an environmental impact assessment on the plan.

Worried that opposition to the dry-dock might interfere with Taiwan President Chen Shui-bian’s visit to Majuro in May, the dry-dock arrival was also postponed.

With the Environmental Protection Authority board voting Friday against permitting the proposed floating dry-dock to be located in the Uliga area of Majuro, Ching Fu will have to look for an alternate location. The EPA made it clear that the only reason it rejected a permit is because the proposed location was not appropriate, and encouraged Ching Fu to find another site in the atoll.

"It is the mutual interest of EPA, other Marshall Islands government offices and Ching Fu to have this project proceed, though not at the expense of other commercial and social activities already situated at the Uliga site," said the board’s decision issued by EPA general manager John Bungitak.

Local resident Benjamin Chutaro, whose waterfront property is located a stone’s throw from the proposed site of the dry-dock, had been the leading opponent of the dry-dock since the plan first emerged in 2004. He argued that locating the dry-dock in the vicinity of two hotels, scuba dive operations and residences would seriously damage tourism development. He said the plan for the dry-dock to be located next to the Japan government-funded Uliga Dock had already resulted in Japan halting plans to invest more money in a major dock extension.

"It’s not that the dry-dock isn’t going to bring positive economic development," Chutaro said. "It’s that Uliga is not the right place. Putting the dry-dock in Uliga is a big mistake and will kill tourist and other developments."

The government’s Minister of Resources and Development has been the most vocal supporter of the dry-dock plan for the jobs it will create, and criticized opponents for being racially motivated. "I would hate to have us project an image of being unfriendly to foreign investors because they come from Asia," Minister John Silk said in an interview last week.

"This is really the first time where a foreign company is putting its own money into an investment in the Marshall Islands," Silk said of Ching Fu’s plan. "I’d hate to see a serious investment lost because of prejudice that over-shadows all other issues."The overriding concern of the government in this central Pacific nation is to generate employment opportunities for Marshall Islanders, Silk said. "Our goal is to get as many people as possible on the payroll," he said. "Sixty percent of our youth are unemployed and lack skills. If the dry-dock comes, Majuro will become the central focus of the fishing industry (in the region). This means when boats come in, crews use living quarters on shore, the boats buy more fuel, and there’s more money, job opportunities and other spin-off benefits from the dry-dock. It will be an economic boom for the Marshall Islands."

The environmental statement issued in May by AEC Group Ltd. of Australia, which represents Ching Fu, echoed this positive economic view. The dry-dock would give a boost to the local economy equal to 11 percent of the nation’s entire gross domestic product, or about $11.2 million annually in salaries, taxes and sales, the report said.

"The very significant economic impact also involved with the project demonstrates that through industrial developments of this type, it is possible to have economic growth without further exacerbating the very significant environmental challenges already facing the country," the environmental report submitted to the EPA said.

While the Marshall Islands EPA was not swayed by the economic arguments in favor of the dry-dock being located in the heart of downtown Majuro, it urged Ching Fu to look at alternative locations.

"The RMI EPA board would be prepared to accept an alternative location that removes the operation from the central (downtown) residential and commercial areas of Majuro, where its industrial nature is more compatible with the surrounding environment and its human uses," the EPA said in a statement.

"It is important to make clear that the only reason this assessment is being refused is the proposed location," the EPA said. "Otherwise, with several adjustments and clarifications in the memorandum of understanding, the environmental impact assessment (submitted by AEC Group Ltd.) is sufficient to justify approval of this proposed project."

In an effort to encourage further discussions on the dry-dock, the EPA board added that it "has been conveyed to the EPA that the Marshall Islands government is prepared to work with Ching Fu and other interested parties toward the development of appropriate infrastructure at an alternative site in Majuro that would enable the dry-dock to operate safely, and in comport with long-term plans for the development of our fisheries sector."

July 4, 2005

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