GBCPA Press Release
FOR IMMEDIATE RELEASE
April 18, 2003
CONTACT: Nancy Edmonson 281-471-4567
Larry Tobin 281-326-1687

Faulty Assumptions Inflate Price Tag at Spillman¹s Island
The Port of Houston Authority¹s specifications for its proposed mega-container port are written to favor the Bayport location and to undermine alternative possible sites, charges the Galveston Bay Conservation and Preservation Association (GBCPA).
    Challenging the Port¹s repeated dismissal of several alternative sites, Nancy Edmonson of GBCPA said the Port¹s economic analysis is derived from biased assumptions. Changing these could mean that other sites such as Spillman¹s Island, Pelican Island or even the ship channel at Beltway 8 would be much more buildable than the Port has indicated.
     "It¹s like writing a job description saying the candidate must speak French even when the job requires no French, so that your preferred candidate who speaks French will get the job," said Edmonson. "Artificial specifications favoring the preferred site are misleading and unfair to the taxpayers of Harris County, whose property tax dollars will pay for the project."
One major component of the bias is specifying a cruise ship terminal as part of the project. Based on the Port¹s own figures, avoidable costs specific to a cruise terminal at Spillman¹s Island would amount to some $90 million, according to Edmonson¹s analysis in comments submitted to the Texas Council on Environmental Quality (TCEQ) earlier in April.

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    Nationally recognized cruise terminal and port consultant Ricardo Fernandez of Indigo Service Corporation has argued that cruise and container facilities should not be co-located due to national security concerns.
     "Separating the two is desirable from both security and land use perspectives, yet the Port continues to insist that they be built together," said Edmonson. "The cruise terminal skews the economic analysis. Remove the cruise terminal, and Spillman¹s Island is much more feasible."
Inefficient design creates further bias and even greater unnecessary costs. The Port¹s design covers nearly 1,000 acres, but other modern container terminals with similar capacity require less than half as much space. The size and layout of the Port¹s proposed container terminal artificially drive up projected costs by at least $172.8 million at Spillman¹s Island, Edmonson told TCEQ.
    "Since Spillman¹s Island requires more site preparation than Bayport, the large size of the project footprint disproportionately increases the costs of the Spillman¹s Island alternative. If efficient design standards were applied and the terminal area at Spillman¹s Island were 400 acres, site preparation costs would drop by $80.2 million," she said.
    The rest of the $172.8 million she identifies as artificially inflated costs involve pipeline relocation, bank armoring, and dredge spoil disposal. The Port¹s inflated costs for all these would drop if the footprint came down in size. Edmonson¹s size observation derive from a January 2003 space/efficiency comparison of U.S. container cargo terminals, concluding that the Bayport plan would create a sprawling, inefficient facility, outdated before the first container arrived.
    Container cargo is measured in "twenty-foot equivalent units" or TEUs, and the Port of Houston Authority¹s projected through-put for the proposed 1,000-acre Bayport facility is 2.2 million TEUs a year.

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    By contrast, a container port being developed on only 400 acres at Shoal Point in Texas City--for which the Corps issued a permit last week--has a projected through-put of 2.4 million TEUs a year, higher than at Bayport although occupying less than half the acreage. Further illustrating the inefficiency of Port of Houston Authority plans, a Port of Long Beach terminal of 1,017 acres has container through-put capacity of 6.5 million TEUs a year‹nearly three times greater than in the Bayport plan, though on similar acreage.
    "And notice that Long Beach container port is not property tax-supported," said Larry Tobin of GBCPA. "It is funded by revenue bonds, which means that commercial users--not taxpayers--are paying the tab. At Texas City also, shippers' lease payments will cover the costs of developing the container terminal."
    Edmonson also challenged the Port in a December 2002 analysis showing that new road construction, railroad spurs, and other special requirements at Bayport would add more than $200 million in costs that would not apply at Spillman's Island. These needs at Spillman¹s Island would be modest because the site adjoins the Barbour¹s Cut container port and could share its infrastructure.
     Spillman's Island is an active dredge spoil site fronting the Houston Ship Channel and remote from residential areas. Building on dredge spoil would mean no impacts on environmentally sensitive habitats. Despite these positive factors, the Port has steadily resisted more serious consideration of Spillman¹s Island.
    The full text of GBCPA¹s reports on costs at Bayport vs. Spillman¹s Island and on size/efficiency at U.S. ports can be seen at http://www.gbcpa.net/Publications

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Galveston Bay Conservation and Preservation Association
P.O. Box 323, Seabrook, Texas 77586
Phone: 281-326-3343
Website: www.gbcpa.net
 E-mail:  gbcpa@ev1.net