Posted February 13, 2018
As unexpected changes and rising cost estimates for a major East Terminal expansion continue to whittle away at Port Panama City’s budget, port officials are hoping Triumph Gulf coast oil spill funds come through.
“Our budget is a little bit stressed, so we’re hoping to get some dollars from the Triumph funds,” Port Executive Director Wayne Stubbs said after Thursday afternoon’s port meeting.
The authority on Thursday approved allocating $643,665 it wasn’t expecting to spend for a planning study to dredge a channel that is part of the East Terminal port expansion project. The port thought the federal government would be funding this PD&E study, but the port instead is spending the funds so the project isn’t delayed, Stubbs said.
“The next step is deepening the channel to the former Westrock property,” Stubbs said. “To keep things moving, we are agreeing to spending the funds to get that done and improve our chances of getting dredging done in 2019.”
The authority on Thursday also approved a contract with Mott MacDonald, not to exceed $457,451, for engineering work associated with the East Terminal deepening. Port officials were expecting those engineering costs.
Stubbs said the East Terminal expansion is necessary to keep ships going to the paper mill.
“Ships are getting bigger,” he said. “They need not only deeper water but more cargo to justify calling a port. The port needs to grow if Panama City wants to be a port city 25 to 30 years from now.”
The authority on Thursday approved three joint participation agreements with the Florida Department of Transportation that will cost the port about $6 million in matching funds for port improvements over five years.
One of the agreements calls for the port spending $2.5 million, with the DOT pitching in another $2.5 million, toward warehousing and cargo facilities at the East Terminal. The funds will be used for demolition of existing buildings and the construction of new warehousing, outside storage, lighting and gate improvements.
In addition to some unanticipated expenditures, the port also is coping with cost estimates for the project itself coming in higher than projected.
Stubbs said the original estimate of the cost of the bulkhead for the East Terminal was in the $8 million range, but estimates now are coming in as high as $13 million.
“We’re concerned about our budget because the original estimate for the bulkhead wall was closer to $8 million,” Stubbs said. “The (East Terminal) warehouse came in a little bit higher than estimates.”
The increased costs might be tied to hikes in steel and concrete prices and a rebounding economy, Stubbs said.
The authority is hoping to get some help from Triumph Gulf Coast oil spill funds to avoid having to borrow any more money for the East Terminal project. The authority is applying for $10 million to help complete the planned improvements in the first phase of the project, with enough left over for the channel deepening and berth dredging.
Stubbs said the authority already had borrowed $12 million to pay for the property for the East Terminal expansion.
“We’ve gotten good support from the state in terms of matching grants for the improvements, so we’ve been using the cash accumulated over the last years and matching grants. So far, we haven’t had to borrow additional money.”
He said the port is dedicated to getting the project done, but if the business has to borrow significantly more and add to its debt service, “it simply slows down port development for years and years.”
Stubbs said the port expansion and the deeper channel will allow more ships to come into the port.
“We’re still very positive about the whole project,” he said.
Source: NEWS HERALD