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HDOT Kicks Off Phase I of Harbor Modernization Plan

Tue December 27, 2016 - West Edition #26
Construction Equipment Guide

The Hawaii Department of Transportation (HDOT) Harbors Division kicked off the initial construction phase of the state's Harbor Modernization Plan with the announcement of the Phase I, landside construction segment of a new berthing and container handling facility at the former Kapalama Military Reservation.

The Kapalama Container Terminal (KCT) is the centerpiece of the Harbor Modernization Plan resulting from the approval of Act 200 (2008) and is necessary to maintain the vital, just-in-time shipping logistics necessary to sustain our island state.

More than 80 percent of all goods consumed by Hawaii residents and its visitors are imported to the islands, and of that, more than 98.6 percent flows through the Port Hawaii commercial harbor system.

The Harbor Modernization Plan initiative has been championed by the Hawaii Harbors Users Group (HHUG) and supported by the Legislature since 2008. It identified key improvements designed to expand harbor system capacity, address advancements in containerized cargo handling, alleviate congestion issues and the lack of available operational space and to develop more adaptable and resilient port facilities.

As a self-funded agency, HDOT Harbors Division is employing new methods to manage its finances to generate sufficient capital to fund the Modernization Plan, which includes the critical KCT project. The department recently completed seven public hearings on six islands to present its proposed harbor rate increases that garnered final approval by the Governor prior to the announcement of the bid release.

“I'm pleased to see this modernization plan that was initiated by the state Legislature nine years ago advance and progress so much over the past two years. This project ensures that vital goods and services are available to our communities when they need it,” said Gov. David Ige. “It gives me great pleasure that the KCT project is a key component of my administration's efforts to support increased economic activity, and also become the starting piece of my 21st Century Kalihi initiative to revitalize that working class community.”

“Hawaii's commercial harbors represent our lifeline to the goods that supply our communities. This plan ensures the continued delivery of goods to our island state,” said Gary North, executive director of the Hawaii Harbors Users Group

Stated Glenn Hong, president of the Hawaii Harbors Users Group and president of Young Brothers, “We commend Governor Ige, Director Fuchigami, Deputy Director Young and his Harbors employees, as well as the members of our Hawaii Harbors Users Group and their employees in their steadfast commitment since 2008 to bring this project to the start of construction.”

Additionally, HDOT Harbors Division announced that it finalized a bond purchase totaling $91.2 million by Bank of America and its affiliates in early December, which results in the division's refinancing of its outstanding revenue bond debt for series 2004, 2006 and a portion of series 2007 bonds.

This transaction (similar to a mortgage refinancing) lowers interest rates for those revenue bonds, which will result in lower debt service payments for future years. It should be noted that the department's bond ratings of A+ and A2 by Standard & Poors, Moodys and Fitch, have been maintained, allowing the division to finance future projects at the lowest cost and interest rates possible.

KCT will serve as the heart of Hawaii's intra and inter-state cargo handling operations, supporting greater efficiencies, which will allow for decreased costs. Construction is scheduled to begin in spring/summer 2017 and will be completed in two phases over four years.

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