Guam Port Authority Proposes Yearly Tariff Increases

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Adjustments would reduce dependence on external assistance

By Mar-Vic Cagurangan

HAGÅTÑA, Guam (Marianas Variety Guam, Jan. 7, 2014) – The Port Authority of Guam is proposing the implementation of a five-year annual tariff increase of 4.36 percent to fund its projects under the revised port modernization program, as well as near-term sustainability initiatives.

The port is also proposing plans for 3.95 percent annual tariff increases after the initial five-year schedule to keep pace with inflation.

According to the Guam Master Plan Update 2013 Report prepared by Parsons Brinckerhoff, the proposed tariff adjustments would allow the port to reduce or eliminate dependence on outside funding assistance.

Currently, projects under the Port Modernization Program are funded by grants from the Maritime Administration’s capital improvement program and the Transportation Investment Generating Economic Recovery, also called the Port Security Grant Program.

Modernization projects include those identified in the 2007 master plan with a focus on providing facilities and equipment that are aligned with service needs for the military realignment. These projects are anticipated to be completed by 2016.

The second category refers to sustainability in the form of "operational practice and projects," applying to both existing and aged facilities as well as the new ones. "For aged facilities/equipment, the range of actions includes catch-up maintenance and repair, retrofit/renovation, and eventual replacement," the report said. "To be effective and efficient, sustainability is facilitated with appropriate skilled staff and systems support."

To be scheduled

Sustainability projects are identified as "to be scheduled," which require added definition. They depend on the rate of experienced deterioration, the need to have a plan for phased implementation, and can only be executed when revenue generated by the tariff structure allows this to occur, according to the report.

Parsons Brinkerhoff, the port’s consultant, is recommending the completion of the port modernization projects prior to the military buildup cargo peak in 2016.

These projects include container freight station renovation, Warehouse 2 demolition, container terminal yard expansion, breakbulk yard expansion, new gate complex, fire-fighting improvements, storm water improvements, and service life extension work on cargo terminal wharfs.

The revision of the port master plan was prompted by the adjustment in the number of Marines who will be relocated to Guam from Okinawa.

The original master plan called for more than $200 million in major capital projects to be executed in a four-year timeframe.

"At that time, it was determined that the military buildup would create significant increases in annual port cargo volumes causing the port to become a cargo-handling bottle-neck for Department of Defense construction materials and impact the logistics lifeline for all of Guam," the report said.

The original master plan was based on the assumption that 8,600 Marines and 9,000 dependents were to be relocated to Guam.

The number has since gone down to 5,000, prompting the necessary downward adjustments to the plan.

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