Helping the Port of Guam Prepare for Key Upgrades

The Port of Guam, which handles nearly all goods and supplies shipped to the Pacific island of Guam, is set for major improvements thanks to engineering and financial consulting provided by WSP USA.

As Guam’s only commercial port, its citizens – as well as U.S. military personnel stationed on the island – rely on the Port to provide essential goods such as food, building materials and fuel. More than 90 percent of Guam’s goods and supplies arrive through the Port, with 30 percent of that total cargo military-related.

Considering its economic importance, and with anticipated increases in U.S. military personnel on the horizon, the Port Authority of Guam realized that it was time to plan for future growth, replace outdated equipment and make other improvements to keep the Port fully operational.

“If the Port doesn’t work, Guam doesn’t work,” said Lou Wolinetz, WSP’s financial consultant for the project. “Day-to-day, this is how their citizens get nearly everything they consume on the island. And as the U.S. military prepares to bring in 5,000 additional Marines and their families, more construction is on its way.”

To achieve its objectives, WSP helped the Port Authority secure and close a $72.5 million bond that will allow the Authority to finance the necessary improvements. Bob Johansen served as project manager, and Shannon McLeod was the task lead.

“This is the first-ever bond issuance for the Port Authority,” Wolinetz said. “A new issuance is always challenging, and even moreso on Guam due to its remoteness. WSP worked closely with the underwriting team led by Citi bank to overcome those challenges.”

©WSP USA

The $72.5 million bond will assist the Port of Guam with key projects to upgrade the facility, including the purchase of a new gantry crane.

A Master Plan

WSP has served as a consulting engineer for the Port Authority of Guam on several major projects for more than a decade, including preparation of its master plans in 2007 and 2013. The most recent master plan focused on phasing of Port improvements, budget allocation and investment priorities. Over $100 million has been invested in the Port Modernization Program since 2013, with much of the funding coming from MARAD and the Department of Defense. The bond-funded projects will continue this critical updating of the Port facilities.

Among the strategic recommendations in the 2013 master plan was the issuance of a bond that would support a long-term focus on improvements that maintain the Port’s operational and economic sustainability.

“The bond is a major step forward for the ongoing Port modernization,” Johansen said. “This allows the Port to take control of its next set of projects and prepare for the island’s growth and the military personnel increases.”

As part of the bond application, the firm prepared cargo throughput projections and multi-year forecasts of the Authority's revenues and expenses from 2018 to 2022.

The Port currently benefits from expanded facilities and upgraded equipment that were outlined in the short-term aspects of the 2013 master plan, and with the bond closing, the Authority is now prepared to move forward with upgrades to facilities that support its long-term sustainability.

Future projects include revitalization of the Port’s access road and the long out-of-use Hotel Wharf section of the Port; repairs and improvements to Golf Pier; construction of a new administration building, which will free up space in the container yard and provide modernized facilities to the Port and its tenants; repairs and upgrades to Warehouse I; equipment maintenance and repair; building repairs and upgrades; and waterline replacement and relocation.

“Among the most important assets on the Port are the gantry cranes,” Johansen said. “Guam is a corrosive environment because of the natural conditions, and it is critical that the Port Authority of Guam has instituted a program to continually replace aging crane assets.”

Modernization plans for the Port also include:
• continuing to optimize the new terminal operating system (TOS) to record, control, and report cargo movements into and out of the port along with cargo storage protocols within the terminal;
• a gate operating system (GOS) that will automate the link of cargo gate transactions with the TOS, further enhancing operations;
• further upgrades to the financial management system will link the accounting system seamlessly with the TOS for cost tracking and billing.

“WSP worked with the Guam Economic Development Authority on debt issuance, and helped the Port establish confidence from oversight agencies, including the Public Utilities Commission and Guam Legislature, in the Port’s ability to manage its finances,” Wolinetz said.

©ANTHONY TAMAYO JR./OFFICE OF THE GOVERNOR OF GUAM

Upgrading the facilities at the Port of Guam will be critical to maintaining the flow of goods in and out of the U.S. territory.

Every Step of the Way

Guam’s commercial Port facilities are located on Cabras Island along the northern shoreline of the Outer Apra Harbor, a natural lagoon on the western side of Guam. It is enclosed by a submerged coral bank and a barrier reef enhanced with a breakwater.

Covering 212 square miles, Guam boasts a rich 4,000-year history of indigenous Chamorro culture, and is currently home for nearly 170,000 citizens, in addition to an estimated 20,000 military personnel.

“It is a hilly island with high cliffs and numerous coves and beaches and it is a popular destination for tourists, especially from Japan and South Korea,” Wolinetz said. “The largest of the 2,000 islands in Micronesia, Guam serves as the economic hub for the region of western pacific islands.”

With the bond now closed, WSP will continue to partner with the Authority on implementing many of the projects outlined in the consulting engineering report that WSP prepared for the bond.

“WSP will continue to serve as the Port’s agent engineer as it implements its capital program, provide financial consulting and tariff sufficiency analysis, and assist the Port with key projects,” Johansen said. “WSP has been with the Port every step of the way, and that relationship will continue.”

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