Bonanza for Builders at Port of L.A.

The Port of Los Angeles has essentially completed the $330 million land-building portion of Pier 400, the biggest U.S. dredge-and-fill operation ever undertaken, and now a wave of $300 million in contracts is about to be unleashed.

The contracts being awarded will go toward the construction of a wharf, roads, rail yards, berths, cranes and buildings on about half of the 590 acres of newly built land. Once complete, Pier 400 will be the nation's largest single-operator shipping terminal; it will be run by Maersk Sealand Co. under a lease agreement in which the shipping giant will pay the port $2 billion over 25 years.

"This is the last great development in the Port of Los Angeles. After this, there simply won't be any more room for a new terminal this size," said Stephen Erie, professor of history at UC San Diego, who has extensively tracked Southern California's ports, airports and water supply.

The infrastructure contracts are expected to generate in excess of 1,000 jobs when they are in full swing later next year, port officials say. When completed, the Pier 400 terminal is projected to generate several thousand jobs with more than $500 million in cumulative annual wages and $1.7 billion in overall economic impact.

The terminal, located on the east side of the L.A. harbor, is scheduled to begin operating in the spring of 2002, simultaneous with the debut of the Alameda Corridor. The final phase of Pier 400 is then slated to begin in spring 2002, when another $150 million in contracts will be awarded to build out the other half of the newly created land.

"This is prime work for anybody involved in port construction, with so many major contracts coming together," said Aileen Cho, transportation construction editor for Engineering News Record, an engineering and construction trade industry publication. "I would expect competition for these contracts to be very intense."

Meeting trade demands

Driving the expansion is the ever-increasing amount of cargo plying the world's oceans, especially between Asia and North America. After a dip in 1998 and early 1999, trade with Asian countries has picked up and is expected to rebound even more sharply in the next few years.

The Port of L.A. is not alone in expanding to meet expected increases in cargo trade. With the amount of cargo crossing the world's oceans expected to double or even triple over the next 20 years, many of North America's major ports are embarking on expansion programs, said Jean Godwin, executive vice president of the American Association of Port Authorities.

On the West Coast, Port Vancouver completed its Deltaport container terminal in 1997, doubling its container capacity. The Port of Seattle is in the midst of spending $300 million to build 150 acres of new terminals; that project is also expected to wrap up in early 2002. And the Port of Oakland has plans to build 250 acres of new marine terminals and container yards; in March it sold $400 million in revenue bonds to fund the first phase of that expansion.

Closer to home, the Port of Long Beach last fall signed a letter of intent with Hanjin Shipping Co. to build and lease out a 375-acre container terminal on the former Long Beach Naval Station and Naval Shipyard. That project is also expected to come on line in early 2002.

But the Long Beach project is merely a conversion of an already existing shipyard, while L.A.'s Pier 400 is being built from scratch, including even the most basic infrastructure. Installing that will require hundreds of millions of dollars in private-sector contracts over the next 10 years, starting with seven contracts being put out to bid this summer and awarded later this year. Among these are:

* Wharf construction, estimated at between $65 million and $70 million;

* Container storage and handling yards, at an estimated cost of $70 million to $75 million;

* A terminal administration building, along with vessel and rail-yard operations buildings, projected to cost $70 million;

* A four- to seven-lane highway, with overpasses, estimated to cost $30 million to $35 million;

* An intermodal rail yard, at a projected cost of $32 million to $38 million;

* Bridge construction, estimated to cost between $11 million and $15 million.

After all this work is completed in early 2002, the port and Maersk Sealand will award the $150 million in phase-two contracts, work on which is slated to be finished in early 2005.

Deepening the harbor

But even the complete build-out of Pier 400 will not be enough to keep up with the ever-expanding world of cargo. Port of L.A. officials say more work will be needed to upgrade the rest of the port to accommodate the next generation of cargo megaships, which are expected to be up to 50 percent larger than the largest cargo ships operating today.

To handle those seafaring behemoths, the Port of L.A.'s main channel will be deepened and berths enlarged later this decade.

"The ships are getting ever larger and all the world's major ports are having to go back and do more dredging to accommodate them," said Chief Harbor Engineer Stacey Jones, who also manages the Pier 400 construction program.

But that project, notes Erie, will face major environmental challenges, as the Pier 400 project did. In order to get permission to dredge Out the harbor, the Port of L.A. had to find wetlands elsewhere to offset the loss of wetlands at the harbor; the port has spent tens of millions of dollars to finance the purchase of wetlands in Orange and San Diego counties.

"Getting the OK for this project will not be an easy task," Erie said. 'They've been trying to deepen that channel for decades."

As part of the effort to satisfy environmentalists over impacts of the Pier 400 project, port authorities set aside about 15 acres as a nesting site for the California least tern, a bird on the federal endangered species list. The least terns had at one time made their home on Pier 300, but were relocated last year to the newly created land on Pier 400.

Port officials say they are in negotiations now with state and federal environmental agencies to again relocate the least tern nests once Pier 400 is completely built out in five or six years.