The V.I. Port Authority board of directors approved a negotiation with Orion Marine Construction Wednesday to keep the Texas-based contractor in the territory long enough to complete phase two of its Crown Bay dredging project.
The project, which will allow larger cruise ships access to Crown Bay Marina, has already passed the November 2014 deadline that VIPA and cruise lines agreed on.
After completing phase one of the dredging in October, Orion told VIPA it was leaving the Virgin Islands to start a job in the Dominican Republic because phase two, which involves dredging in the East Gregorie Channel, appeared to be stalled in the permitting process.
The permit was approved by the Legislature last July but has yet to be approved by the Army Corp of Engineers. VIPA Executive Director Carlton Dowe said he expected the permit to be approved this week.
Not all of the members of the board were immediately comfortable with the new deal with Orion, which has VIPA paying the company a daily $5,000 stand-by fee just to stay in the territory each day after December 29th. The negotiation also involves a $22,500 fee for each day of dredging once the permit is approved and a $350,000 penalty to be payed in the event that the permit is denied.
Board member Manuel Gutierrez Jr. was hesitant, saying that it appeared to be "completely open-ended" and that there is no "incentive to be efficient" since the deal does not mandate a specific amount of material to be dredged each day. Guitierrez was concerned that the project could be stretched out for as long as Orion wished and VIPA would still be locked into daily payments.
Gutierrez also asked the board to consider what would happen in the event that bad weather or other unforeseen circumstances caused dredging to end early or be canceled for a day. Under the deal being offered VIPA would still owe Orion its entire daily fee.
Executive Director Dowe said that although the agreement wasn’t perfect, he was faced in December with the option of either negotiating with Orion to stay in the territory or putting the project out to bid again, which would set the project back months and cost at least another $500,000 to mobilize a new company from the mainland.
"The decision was whether or not it’s in the interest of the port for us to go back out now and rebid this whole thing, knowing that we have made commitments that we are paying for up to today," said Dowe.
Dowe said that pushing for the approval of the permits so that Orion can move forward has been a priority, and that he and Director of Engineering Dale A. Gregory flew to Puerto Rico three times to meet directly with the Army Corp of Engineers.
"We pressed as much as we could humanly press," he said.
Legal Council Don C. Mills said that because the board was being presented with a change order and not a final contract, language could be added later to clarify Orion’s responsibilities to VIPA. He said that if the contract said Orion would only be paid if they completed the job up to "industry standards" it would protect VIPA legally.
Incoming board Chairman Roberto C. Cintron said that as an engineer he understood why the negotiation had been made for a daily rate, since it’s hard to measure the amount of material that comes out of a dredging project in a given day.
"I just have to trust in the enforcement, and if we add some additional language to cover ourselves from some of the concerns raised, I’m for it," he said.
Dowe and outgoing board Chairman Robert O’Connor Jr. both urged the board to consider the long and difficult history of the project and place some faith in the agreement. Dowe said that to draw the dredging project out any further would be "a huge detriment to the entire territory."
A motion to recommend approval of the deal passed with six yes votes and Gutierrez abstaining.
Phase one of the Crown Bay dredging project was originally estimated at $1.3 million. The board was asked Wednesday to transfer an additional $224,423 from another project due to unexpected costs, which they did in a unanimous decision.
New officers elected at Wednesday’s meeting were Allison "Allie" Petrus, board secretary; Beverly Nicholson-Doty, vice-chair, and Cintron as chairman.
Also present Wednesday were board members Yvonne E. L. Thraen, and Jose Penn. Board member Gustav James was present for an executive session, but left early.
