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Los Angeles and Gambol Industries Get Closer to the Rocks

Posted to Martin Rushmere (by on December 2, 2010

A debacle is on the way if the problem is not resolved

Bond ratings for the Port of Los Angeles might just be getting a downgrade within the next year, and by extension, so will those for Long Beach.
The Gambol Industries shipyard controversy will be the reason. Lawyers have ramped up the verbal onslaught against the port with accusations that the port's "actions demonstrate a calculated course of conducts designed to harm Gambol's efforts to comply with the memorandum of understanding [which holds both parties' feet to the fire about coming up with a plan to consider a yard]."
Gambol's objections center on cost estimates for different aspects of the port's project to deepen the main shipping channel and the dumping sites for the soil. A comprehensive summary of the argument can be found in the Cunningham Report.
But, regardless of who is to blame, the dispute is perilously close to heading to the courts.
To the maritime community, the squabble over the cost estimates misses the main point of Gambol's argument. To quote Admiral Nelson at the Battle of Copenhagen, "I see no ships."
Few people can see an economically viable number of ships coming off the slipways, or being repaired, to make the yard worthwhile. Likely customers have not yet materialized. And yet, the talk is all about who said what to whom.
Skepticism is taking hold of onlookers because they cannot see anything tangible coming out of the shipyard.
 If the worst comes to the worst over the legal wrangling, the port's two new terminal projects are set back years. (They are the main reason for the channel deepening.) And with them, outside confidence in the port.
This will place all future finances in doubt, along with capital and maintenance budgets and Moody's plus the other agencies will take a severely critical view of the financial wellbeing.
Long Beach will inevitably suffer, because the two ports are seen as one entity. Almost every issue that crops up involves both – the Clean Air Action Plan being the obvious example – and Long Beach has already been dragged in by Gambol's lawyers, who avow that there was talk of the dredging silt being taken there. (LA also mentioned it in the environmental assessment.)
Once the courts get involved, the lawyers will make darn sure to involve Long Beach – if only to complicate matters, drag out the wrangling and earn more money.
As ever, only the lawyers stand to gain and an outside arbitrator is needed urgently to head off a public calamity.

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