Guam box terminal privatisation coming in on final approach

According to Joe Mesa, general manager of the Port Authority of Guam, while it is difficult to say precisely when the process will be complete, “the port authority is anxious to finalise the process and hopes to complete it within a month.”

Industry sources say that auditors working on behalf of the port authority have completed the review of the financial proposals which together with technical submissions comprise the main elements of the bids received from the three bidders: ICTSI, SSA/Matson and Portek; and that by the end of November the Preferred Bidder should have been selected and the port authority be in a position to sit down with this party and commence detailed negotiations about the concession.

Tony Ahillen of Matson, Guam, a major carrier to the island, underlines the importance of the privatisation process: “There are good people in the port, ” he says, “but there are factors such as the procurement law that applies here in Guam that inhibit the proper working of the container terminal under public sector control. As it stands at present, if any item is required that costs over US$10,000 for, say, the essential repair of a container crane, then the port authority is required to tender this job via a procedure that is very time consuming. The private sector will undoubtedly be in a position to respond faster and thereby lift the performance of the container terminal.”

Other benefits that come with privatisation are also anticipated including removing the burden from government of future investment. Over the short term one major capital expenditure item is expected to be a new container crane.

This will assist with the simultaneous working of two large vessels, a situation that occurs on a weekly basis in Guam. Currently three quayside gantries are in operation at Guam’s twoberth container terminal.

The candidate operators and developers of the container terminal come from three distinctly different cultures: ICTSI is a 100% neutral international container terminal operator focusing on small to medium throughput container terminals;

Matson/SSA is the joint venture combination of the island’s largest shipping line and SSA; and Portek has developed an interest in operating terminals from its roots in cargo handling equipment manufacture.

Once the port authority makes a final recommendation, Senator Tony Unpingco, chairman of the Maritime Committee at Legislature, says the Guam Senate will be ready to act. The Senator acknowledges that in the privatisation process to-date the pros and cons of the approach have been keenly debated but notes that when the final decision is made by the board of the port authority the Legislature will be ready to ratify it.