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“Everybody expects 2009 to be a bleak year. Now, it looks like 2010 is going to be just as bleak.”

Idle ports signal two ‘bleak’ years ahead in world trade
 Loss of financing threatens sector that accounts for 25% of world economy
BY MICHAEL JANOFSKY AND MARK DRAJEM JANUARY 5, 2009

 Chris Lytle, chief operating officer of the port of Long Beach, Calif., took in a panorama of the slumping world economy from his rooftop observation deck one day this month.

Shipping cranes stood still, truck traffic trickled and a cargo vessel sat idle, moored to a pier.

“You never see that,” Lytle said. “It’s quiet. Too quiet.”

Port traffic is slowing around the world — everywhere from North America to Asia — as a recession erodes consumer demand and the credit crisis chokes off loans to export-dependent companies. International trade is set to fall by more than two per cent next year, the most since the World Bank began measuring it in 1971. Idle ports are showing how quickly a collapse in trade can spread, undermining growth in each country it reaches.

September and October are typically Long Beach’s busiest months as U.S. retailers take deliveries for holiday sales. This year, September imports fell 15.8 per cent from a year earlier, October’s dropped 9.5 per cent, and November’s slid 13.6 per cent.

“Everybody expects 2009 to be a bleak year,” said Jim McKenna, chief executive officer of the Pacific Maritime Association, a San Francisco-based group representing dock employers at U.S. West Coast ports. “Now, it looks like 2010 is going to be just as bleak.”

Read the rest of the article >

Updated December 9, 2008 9:54:24 AM
The JOURNAL of COMMERCE ONLINE

 

The Port of Portland has suspended its search for a private investor to lease and operate its Terminal 6 container facility. 

Port officials decided to put the terminal concession process, which began earlier this year and was spearheaded by Morgan Stanley, on ice in light of economic conditions and tight capital and credit markets.

As recently as October, officials had said that the Columbia River port was on track for a final decision by the end of the year on proposals from about 10 potential partners for the long-term concession to operate up to 215 acres of the 428-acre facility.

They said at that time that the concession project would be unaffected by current economic and financial conditions because of its long-term nature — 50 years or more.

The move by the port was intended to take it out of direct operation of the container business at T-6. The terminal has never reached its full 700,000-TEU capacity while under port management.

Portland’s T-6 is the only remaining port-operated container facility on the West Coast.

Final marine terminal report complete
The Times-Standard
Article Launched: 11/01/2008 01:16:20 AM PDT

A final business plan for turning the Redwood Dock in Samoa into a marine terminal is now available for review.

The plan can be viewed at the Humboldt Bay Harbor, Recreation and Conservation District’s Web site, http://www.humboldtbay.org, or at the district’s office at 601 Startare Dr. on Woodley Island between 8 a.m. and 4 p.m. Monday through Friday.

The district board will hear a presentation by consultant TranSystems on Nov. 14.

Written and oral comments on the first draft business plan were taken by the board at five meetings and over a 64-day comment period ending Aug. 28. At the Nov. 14 meeting, TranSystems will present an updated report providing additional information based upon the comments received.

At the conclusion of the presentation, the board will consider receiving and filing the business plan and directing district staff to proceed with the environmental review process.

The board meeting will be held at the Wharfinger Building in Eureka at 7 p.m.

 

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“The first issue that needs to be addressed will be economic feasibility”

By CERENA JOHNSON, The Eureka Reporter
Published: Sep 12 2008, 11:35 PM · Updated: Sep 13 2008, 1:02 AM

Discussion returned to the future of the railroad at Thursday’s Humboldt Bay Harbor, Recreation and Conservation District meeting.

North Coast Railroad Authority Chairman Allan Hemphill provided the board with an update on current projects.

Currently, the NCRA is focused on reconstruction of the southern end of the line, with a $70 million reconstruction geared toward signals work, restoration of levees in Shellville and bridge reconstruction, Hemphill said.

As the harbor district has yet to reach a final decision on the Redwood Marine Terminal Project, Hemphill said there is “not much of a place to table” for the NCRA.

Once a decision is reached, Hemphill said, “we are required by staff to respond to that.”

The proposed marine terminal project includes construction of a multipurpose berth and long-term expansion dependent on operation of the railroad.

The way the process is set up, Hemphill said several issues need to be addressed.

“The first issue that needs to be addressed will be economic feasibility,” Hemphill said, along with assessing whether there is a sufficient traffic base.

Hemphill also said environmental issues need to be addressed in order to handle that traffic — in the case of the Eel River canyon, an environmental impact report — and said the question of where funds come from for restoration needs to be answered.

“We’re waiting for something to respond to,” he said.

Two years ago, the NCRA began the process of assessing the cost of fixing the canyon, starting an environmental review process and engaging an engineering company to do photo mapping to determine where problematic areas are, as well as a geo-tech study.

That is now in the final stages, Hemphill said, after which it will be delivered to the NCRA board and made available to the harbor district and public.

“I think it will finally answer some of the questions that have been hanging out there,” Hemphill said.

The harbor district board also continued discussion of the Goldman Sachs negotiations.

“We have not accepted their proposal because it does not cover items the board feel are necessary,” said Commissioner Roy Curless.

Curless said a lot of negotiating remains to be done between the board’s committee and Goldman Sachs.

“They’ve kind of come dead in the water,” Curless said.

The next step will be for Goldman Sachs to come up with a proposal that is accepted by the committee, which the committee would then bring to the board for fine-tuning, he said.

Read the story in the Eureka Reporter >

An important message from David Gurney
David Gurney spoke at last week’s HBHRCD meeting

It is apparent that Humboldt Bay is about to be blindsided by oil and gas development.

Pacific Gas and Electric Co. has staked claim to a 136 sq. mi. area of ocean right outside the mouth of the Humboldt Bay. They also have permits for 68 square miles off the Mendocino Coast, and are apparently in negotiation with the Minerals Management Service to lease even more large tracts of ocean, just outside of these huge areas. These tracts correspond to offshore oil drilling zones, that were under negotiation for Oil and Gas Lease/Sale # 91 back in 1988.

PG&E does not need such huge areas of ocean to test wave energy devices, and instead has the potential to “site sit” these locations, until such a time that the leases can be converted to natural gas and oil drilling permits. It says so in their permit documents.

Also documented is the fact that P.G.& E. has approached as two companies as consultants on their wave energy projects : Black & Veatch and CH2M Hill. Both are world-wide conglomerates engaged in natural gas and oil development.

Furthermore, Goldman Sachs has offered to lease and develop the marine terminal of Humboldt Bay, supposedly for the benefit of commerce and tourism. But Goldman Sachs is heavily involved in speculation on oil futures, and is in fact one of the major players in such speculation, and thus could have a serious conflict of interest in what is best for the Bay and the citizens of Eureka.

I believe that Goldman Sachs, along with PG&E and their consultants have the potential to turn Humboldt Bay into a scene similar to Martinez in the East Bay, with refineries, natural gas processing facilities, cogeneration plants and storage tanks, not to mention tanker traffic. Read the rest of this entry »

“I would really like someone from the NCRA or the operator to hold a joint meeting or something,” Wilson said. “We’re not getting any acknowledgment that this project even exists.”

Answers lacking in big Bay plans – July 29, 2008

Jennifer Savage
Eye Scene Editor

WOODLEY ISLAND – Ongoing concerns over the future of Humboldt Bay prompted more than 50 people to attend last week’s Humboldt Bay Harbor, Recreation and Conservation District meeting. 

In addition to the usual attendees offering their usual critiques, a significant number of new constituents showed up.

With the room filled to capacity, many attendees could only listen through the doors, kept open through the mostly temperate evening.

Fill the marina

Prior to the big ticket items, open public comment took place. Humboldt Fishermen’s Marketing Association representative Ken Bates reiterated the association’s request that the Bay District strive to decrease the Woodley Island Marina vacancy rate. “We still would like to see it 90 percent full,” Bates said. 

The HFMA has sought to mitigate an upcoming slip increase by suggesting the district instead  increase income by reworking its leasing policy. The association suggests the Bay District evict derelict and non-used boats, reassign boats to more appropriately sized slips and reduce the percentage of slips reserved for transient vessels to make room for local residents currently on the marina’s four-year waiting list.

Revenue bonds, explained

A presentation by District Treasurer Mark Wetzel addressed the revenue bond portion of the draft Redwood Marine Terminal Business Plan. Revenue bonds, he explained, are a form of debt secured by the revenue of a specific project, as opposed to “general obligation” bonds paid through taxes and needing voter approval. Revenue bonds are more risky, Wetzel said, and in this case, would be secured solely by projected marine terminal income. If the revenue failed to meet expectations, discharging the debt would be “a long and painful process,” he finished.

Cruise ship projections questionable

Like many, Third District Commissioner Mike Wilson questioned consultants TranSystems’ reliance on an unprecedented number of cruise ships visiting Humboldt Bay.

“It’s TranSystems’ report,” District Chief Executive Officer Hull said. “It’s theirs to justify – they need to justify.” The didn’t “just make it up,” he continued, but they failed to explain how the increase would occur. Hull said he expected the final draft to contain a better rationale.

Rail tie-in

The proposed port development necessitates the return of rail to Humboldt County, a component which continues to polarize the county. Wilson suggested seeking funding based not on revenue bonds, but by presenting the port as a coastal barge feeder alternative to the rail. “Then it actually becomes a reasonably fundable project,” he said, citing California Transportation Commission support. “It would drastically change the equation,” Wilson continued, instead of continuing what he called, “The path of most resistance.”

Discussion of the rail component prompted questions over why the North Coast Railroad Authority had yet to officially recognize its role in the proposed development plan.

“I would really like someone from the NCRA or the operator to hold a joint meeting or something,” Wilson said. “We’re not getting any acknowledgment that this project even exists.” Hull assured him that an NCRA representative would attend the next district meeting. Read the rest of this entry »

The Times-Standard

Humboldt Bay Harbor, Recreation and Conservation District representatives on Thursday reported that negotiations with financial powerhouse Goldman Sachs and Co. over a port and rail marketing arrangement were potentially dead.

”I would say right now that there are huge, huge issues and questions that may be insurmountable,” said district counsel Paul Brisso.

Brisso — who sits on the committee handling the matter along with Commissioner Dennis Hunter, Treasurer Mark Wetzel and Executive Officer David Hull — said it’s highly unlikely a tentative agreement will be produced for the commission to consider.

Goldman Sachs approached the district in May, looking to market the port and the North Coast Railroad to investors. A Goldman Sachs representative said that billions in pension funds around the world were looking for long-term investment, and that infrastructure fit that bill.

Brisso said he was unable to go into detail on the sticking points of the negotiations, citing their confidentiality.

“If that sounds like tossing the family furniture in the fireplace to keep the house warm, you’re getting the message.”

 

 

Infrastructure: A Road to Riches?

By Jerry Knight
Washington Post
Monday, March 20, 2006; D01

If somebody asked if you wanted to buy the Brooklyn Bridge, you’d know it was a con. But how about buying the Indiana Toll Road?

Before you snicker, you should know the Indiana highway was auctioned off last week for $3.8 billion.

For the next 75 years, the more than 150 miles of Interstate 80 will be run by a pair of Spanish and Australian companies that will collect the tolls, operate the pit stops, keep up the highway and try to make a profit.

Cintra SA, the Spanish firm, and Macquarie Infrastructure Group, the Aussies, are teaching Americans the business of investing in roads, bridges, water mains and the like.

You may have heard of Macquarie. Last year it bought a controlling interest in the company that operates the Dulles Greenway for $533 million. A year ago, Macquarie and Cintra took over the Chicago Skyway, adding it to a network of toll roads and bridges around the world. And Macquarie is part of one of the rival groups bidding $1 billion to take over the Dulles Toll Road for 50 years, with the money expected to underwrite Metrorail’s extension to Dulles.

The Australians launched a sister company in the United States in December 2004. Since the $25-a-share initial public offering, Macquarie Infrastructure Co. Trust (MIC on the New York Stock Exchange) has climbed to $34.45. Counting reinvestment of the hefty $2-a-share dividend, investors have made a 45 percent total return since the company went public 15 months ago.

With that kind of money to be made, Americans are lining up to try their luck at Wall Street’s hottest new game — investing in infrastructure.

Washington’s biggest financial firm, the Carlyle Group, just created an eight-member team to get into roads, bridges, etc.

Goldman Sachs & Co., which made $9 million advising Chicago on the Skyway sale and stands to collect about $20 million in fees for putting together the Indiana Toll Road deal, is raising a multibillion-dollar fund to buy infrastructure.

Wall Street is getting into infrastructure because politicians have bailed out on one of the most important issues facing the nation.

Read the rest of the story >

“Economic reality suggests it is time to cut our losses on the idea of competing for the West Coast container trade and recognize that the railroad cannot be cost-effectively restored as part of a container shipping related enterprise.”

Time to weigh in on the bay’s future

Patrick Higgins/My Word/The Times-Standard
Article Launched: 07/15/2008 10:23:46 AM PDT

 

The Humboldt Bay Harbor, Recreation and Conservation Commission, to which I was elected last year, will soon make critical decisions that will either bind us to a 10 to 50 year commitment to large scale industrial Port of Humboldt Bay development or choose another course. Concerned citizens need to weigh in before the end of August regarding the proposal to develop a container-shipping terminal in Samoa.

The commission will make two decisions soon and public comment is invited for each: 1) consideration of adoption of the Redwood Marine Terminal Business Plan, and 2) whether to sign a contract with Goldman Sachs to be our sales representative to auction port assets. The latter agreement would entail an even closer relationship between the harbor district and the North Coast Railroad Authority, which also would have to agree to a long-term lease of railroad assets.

On June 26, the consulting firm TranSystems presented the Draft Redwood Marine Terminal Business Plan to a packed house at the Wharfinger Building. Their report does not show tangible prospects for profitable operation, yet they recommend that the district take on $32-$38 million in bond debt to build a multi-purpose terminal anyway. Positive cash flow in the report is based such unlikely prospects as dozens of cruise ships a year coming into Humboldt Bay, when only two have come in the last five years. Shipping tariffs and dockage fees associated with large-scale terminal development are similarly fabricated. How bonds would be secured will be discussed during our July 24 meeting.

The business plan also recommends that the district attract capital for container port infrastructure by becoming a port landlord, which is the framework that would allow Goldman Sachs to auction our assets in combination with those of the railroad.

The commission on May 22 authorized district staff and counsel to begin negotiations with Goldman Sachs to act as our sales agent to find port investors. The decision to bind the harbor district to an agreement will likely be considered in August. In order for Goldman Sachs to auction off use of the Redwood Dock and NCRA assets, full environmental review of Humboldt Bay and rail corridor impacts must be completed and developments approved by government agencies. I will likely recommend that we hold off on any formal agreement until the environmental analysis has been completed.

I recently voted against passing the district’s 2008-09 budget because we will incur a loss of nearly $600,000 due to investments in port development that have not brought economic return. The business plan does not provide any substantive evidence that we will generate significant revenue from shipping in the next five years, and I am concerned that the harbor district may become insolvent. Our cash reserves are down to a 10-year low of $3.4 million and we have been in the red annually since deepening the mouth of the Humboldt Bay in 2000. Economic reality suggests it is time to cut our losses on the idea of competing for the West Coast container trade and recognize that the railroad cannot be cost-effectively restored as part of a container shipping related enterprise.

At the June 26 meeting, at least 100 new people came and respectfully addressed our commission regarding reservations about container ships, the railroad and Goldman Sachs. My hope is that hundreds more will attend future meetings so my fellow commissioners understand the depth and breadth of public sentiment on the proposals under consideration and how many of their neighbors perceive their economic viability. Commission meetings are normally held at Woodley Island Marina on the second and fourth Thursdays of the month (July 24, August 14 and 24).

The comment period on the business plan has been extended to August 30 and both the Arcata and Eureka City Councils will have agenda items concerning the plan during the month of August. The business plan can be viewed on-line at http://www.humboldtbay.org and written comments via email can be directed to dhull@portofhumboldtbay.org. You can contact me at phiggins@humboldt1.com.  

Patrick Higgins is a Humboldt Bay Harbor, Recreation and Conservation District commissioner.

“It does seem odd that they are effectively teeing up assets for their corporate clients to buy,” he says. “In most situations, that wouldn’t be deemed ethical.” John Foote, the Kennedy School fellow, also suggests that Goldman Sachs has “some decisions to make. People don’t want them playing on both sides of the fence.”

“THE ROAD IS ONE SUCCESSION OF DUST, RUTS, PITS, AND HOLES.”So wrote Dwight D. Eisenhower, then a young lieutenant colonel, in November 1919, after heading out on a cross-country trip with a convoy of Army vehicles in order to test the viability of the nation’s highways in case of a military emergency. To this description of one major road across the west, Eisenhower added reports of impassable mud, unstable sand, and wooden bridges that cracked beneath the weight of the trucks. In Illinois, the convoy “started on dirt roads, and practically no more pavement was encountered until reaching California.”

It took 62 days for the trucks to make the trip from Washington, D.C., to San Francisco, and another 37 years for Ike to complete a quest, inspired by this youthful journey and by his World War II observations of Germany’s autobahns, to build a national road system for the United States. In 1956, President Eisenhower signed the Federal-Aid Highway Act, which called for the federal and state governments to build 41,000 miles of high-quality roads across the nation, over rivers and gorges, swamps and deserts, over and through vast mountain ranges, in what would later be called the “greatest public works project in human history.” So vital to the public interest did Eisenhower, an old-style fiscal conservative, consider the interstate highway system, he even authorized the federal government to assume 90 percent of the massive cost.

Fifty years to the day after Ike put his pen to the Highway Act, another Republican signed off on another historic highway project. On June 29, 2006, Mitch Daniels, the former Bush administration official turned governor of Indiana, was greeted with a round of applause as he stepped into a conference room packed with reporters and state lawmakers. The last of eight wire transfers had landed in the state’s account, making it official: Indiana had received $3.8 billion from a foreign consortium made up of the Spanish construction firm Cintra and the Macquarie Infrastructure Group (MIG) of Australia, and in exchange the state would hand over operation of the 157-mile Indiana Toll Road for the next 75 years. The arrangement would yield hundreds of millions of dollars in tax breaks for the consortium, which also received immunity from most local and state taxes in its contract with Indiana. And, of course, the consortium would collect all the tolls, which it was allowed to raise to levels far beyond what Hoosiers had been used to. By one calculation, the Toll Road would generate more than $11 billion over the 75-year life of the contract, a nice return on MIG-Cintra’s $3.8 billion investment.

Read the rest of the story >

Port should sack Goldman Sachs

Times-Standard My Word
Saturday, May 5, 2008

In the Saturday, May 24 edition story “Goldman Sachs to pitch port-rail,” the claim was made by Goldman Sachs’ VP Jeffrey Holt that “improvements to the port and rail assets will potentially bring thousands of jobs to the region.” The key word is “potentially.”

The dollar has lost 40 percent of its value since 2000 and it’s projected to go even lower. The purchasing power of every dollar you hold will buy less and less as the wave of inflation rolls over the globe for the next several years, an inflation caused by the now-18 percent annualized increase in the money supply created by the Federal Reserve.

Goldman Sachs is one of the large New York firms that accesses this newly created money before inflation sets in, and they deal in trillions of it. By the time regular folks like us get any money, if we ever do, we’re dealing with double-digit energy, health and food costs.

Dumping this paper in exchange for Humboldt Bay’s physical infrastructure is a good trade for GS and their investors, but one has only to look at what GS has done with other small town infrastructures to see Humboldt’s future

Take Montana Power and Light, a small power company in Montana that gave its residents some of the lowest electric bills in the lower 48, and its shareholders regular dividends, but was then “advised” by GS. Montana Power and Light ended up with their assets divided, sold off, and the company left bankrupt from insurmountable debt. Apparently, Goldman Sachs advised both the “investors” and the power company, but the investors were on the winning end. GS often has a conflict of interest as it holds stakes in many of the companies it’s “advising.”

Consider the continuing mortgage securities debacle that left most on Wall Street heavily leveraged with huge losses. Not so for Goldman Sachs. As they sold risky mortgage-backed securities to their clients on the one side, GS heavily shorted the same market on the other side, using their own money, eventually posting record gains for their own shareholders in 2007.

While foreclosures abound all across this country, GS executives, as a reward for their acumen, get some of the highest bonuses on Wall Street.

Further, GS has been implicated in IPO stock fraud, naked short selling, and gold price suppression in order to mask the real inflation rate calculated by independent researchers as over 11 percent, even as official statistics claim a 4 percent annualized increase in consumer prices.

Goldman Sachs is the largest investment bank in the world and an acting arm of the U.S. Treasury, whose former members and CEOs have many seats in the federal government with the revolving door always spinning. The current and former treasury secretaries Rubin and Paulson, White House Chief of Staff Joshua Bolton, current head of the World Bank Robert Zolick, the chairman of the New York Stock Exchange, to name a few, are all former executives of Goldman Sachs. If you like recent economic policy and think this country is doing well, then you’ll love what Goldman Sachs has to offer.

There is no need for a large port operation in Eureka. If there is any congestion in West Coast ports today, there will not be tomorrow. Shipping a container from China to the United States has climbed from $3,000 to $9,000 and as costs for any kind of shipping continue to rise, the global economy will be looking a lot more local. A burgeoning recession in the United States means we will need to have local resources consumed locally, including products from California’s Central Valley.

A better option for the bay would be a major hub for the Sail Transport Network, a group of sailors currently setting up a network of transportation and freight all without diesel, using sailing ships. And eventually, we will want the benefits of a passenger rail running the length of the coast from Seattle to San Diego. Difficult propositions for sure, but much better than giving away Humboldt Bay to a hungry global giant.

Ruby Carter is a Eureka resident. Opinions expressed in My Word pieces do not necessarily reflect the editorial viewpoint of the Times- Standard. MY WORD Ruby Carter

A powerhouse of the ports

For SSA Marine, high cargo volume means success. Global terminal operator SSA Marine focuses on moving lots of cargo from many shippers. It will bring a different business model to the Port of Tacoma.

KELLY KEARSLEY; The News Tribune
Published: September 16th, 2007 01:00 AM

Seattle-based SSA Marine, working with the Puyallup Tribe of Indians, plans to build a multimillion-dollar container terminal on Tacoma’s Tideflats. Scheduled to open in 2012, SSA’s terminal will likely look like other terminals at the port: stories-high cranes unloading large rectangular boxes off ships, stacks of containers lining the asphalt.

But the company brings a business model not yet seen in the Port of Tacoma.

The company depends on high volume – moving as many containers through its terminal as possible to generate lower costs for its customers. To do that, SSA Marine brings container ships from many shipping lines through its dock instead of designating one carrier for the terminal, as has been the tradition in Tacoma.

“This is not rocket science,” said Bob Watters, SSA Marine’s vice president of business development. “It’s a concept used everywhere in the world, except on the West Coast of the United States.”

Watters says SSA Marine’s operations maximize the use of the terminal land. But industry experts note that the company’s success depends on its ability to attract enough customers and cargo to its facility.

Here’s a look at the company, which is setting itself up to be a powerhouse in Tacoma’s expanding port.

HOW IT WORKS

SSA Marine’s parent company, Carrix, has 125 operations around the world, including container terminals, rail terminals and rail yards. The 58-year-old company handled 22 million TEUs (20-foot-equivalent-unit containers) last year – roughly 10 times the containers that came through either the Port of Seattle or the Port of Tacoma.

The company started managing terminals in Seattle and began marketing its abilities to manage terminals elsewhere only in the last decade. Carrix was family-owned until this past month, when it sold a 49 percent stake to investment firm Goldman Sachs.

 

Before you read further consider these facts and follow the links:


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“The cost to public health, restrictions on other bay activity, heightened terrorism interest and attendant security costs are nowhere to be found in the plan. Nor are there any restrictions on military, weapon, nuclear material, or hazardous chemical shipments.”

The Privatization of Humboldt Bay

Opinion by Dave Spreen, June 20, 2008

The action by three Humboldt Bay Harbor, Recreation, and Conservation District (HBHRCD) Commissioners authorizing negotiation of an agreement with Goldman Sachs to move forward before the Redwood Marine Terminal (RMT) business plan was even finished was not only a waste of staff and legal time, but a disservice to over half of the residents of Humboldt County who have clearly expressed through the last 3 general elections that they do not want scarce resources wasted pursuing another boondoggle project, but rather those that are of an appropriate scale.

The privatization of public assets of the HBHRCD was not a focus of the feasibility study. Now it seems the NCRA (North Coast Railroad Authority) and NWP (Northwestern Pacific Railroad) will have to be rolled into the deal in some sort of Public-Private Partnership (PPP). The package will then be marketed to large hedge, retirement, multinational and foreign investment funds by auction. Goldman Sachs takes its money off the top. Those who went this way on LNG (Liquid Natural Gas) plants now find they sit empty because the market changed making domestic supplies more competitive than foreign.

Obviously, the idea is to transfer the risk to the private sector, but it doesn’t always work out that way. The Port Authority in NYC stands to lose $160 million of future lease payments from Goldman Sachs due to construction delays there.

Meanwhile the NCRA is claiming they are exempt from California environmental laws because they are involved in interstate commerce and therefore regulated by the feds only. Ironic isn’t it – an agency created by the California legislature now claims its authority exceeds that of the state! Incidentally, the NCRA has already sold-out those hoping for passenger service or a tourist train because their 99-year lease deal with the NWP operator made no provision for such services. Despite violating its own bylaws in doing so, the HBHRCD Executive Director continues to defend loans to the NCRA as a “good investment”.

There have been 2 major assumptions carried through in the feasibility and business plan that are outdated and misleading: the projected increase in containerized shipping and the thousands of jobs to be created by the project.

The first assumption was based on projections during the building boom from 2000-2005. Already, those projections are woefully inaccurate, but still pushed as justification for the huge risk by proponents of the port/rail project. They ignore the fact the Port of Oakland is now reducing operating expenses, cutting 60 to 70 jobs this year, and trimming over 30 percent of its capital improvements planned for the next 5 years.

The 1999 World Bank report Measuring Port Performance states, “The recent study shows a relatively constant productivity of about 1000 TEUs per staff per year, for a large array of yearly throughput, from 150,000 up to 600,000 TEUs. This includes all staff: operational, administrative and management.”

The RMT business plan calls for about 200,000 TEUs (20 ft. shipping containers) annually for the first few years reaching about 300,000 TEUs maximum. That translates to about 200 to 300 jobs total. If the public share of the project cost runs about $300 million, that’s about $1 million per job, without even considering a few alternative projects.

The cost to public health, restrictions on other bay activity, heightened terrorism interest and attendant security costs are nowhere to be found in the plan. Nor are there any restrictions on military, weapon, nuclear material, or hazardous chemical shipments. Read the rest of this entry »

“Now we know what it’s worth,” Commissioner Steve Radack told the standing room-only crowd of observers. “We can erect a sign on the toll road that says, `Not for Sale.'”

Goldman Sachs’s Conflicts of Interest Convulse Chicago, Indiana
By Eddie Baeb and Justin Baer

July 17, 2006 (Bloomberg) — If you want to know about conflicts of interest at Goldman Sachs Group Inc., just ask Chicago’s city government.

Goldman, the world’s most profitable securities firm, was a frontrunner to advise Chicago on the potential sale of Midway Airport after helping the city lease a toll highway last year. That was until April, when Dana Levenson, Chicago’s chief financial officer, read about Goldman’s plan to buy an airport company in Europe that might eventually bid for Midway. Within a day, he called Goldman to complain and in May told the New York- based firm that it wouldn’t get the assignment.

“It’s an obligation we have to taxpayers,” said Levenson, who denied Goldman a formal interview at his office and hired Credit Suisse Group. “If we think anything could hinder us from maximizing proceeds, we have to fix the situation. And that may involve making sure our advisers don’t have conflicts.”

A growing number of U.S. public officials are asking how an adviser charged with selling assets at the highest price can play the role of investor at the same time, seeking to buy them for as little as possible. Like Levenson, 49, administrators in Indiana, Oregon and Texas are getting wise to Wall Street’s efforts and forcing firms to choose between fees and investment returns. Read the rest of this entry »

America’s new FAST Track to Fascism

wakeupfromyourslumber.blogspot.com

“Every day on national cable, Lou Dobbs curses the steady flow of desperate migrant workers who cross our borders, laboring in exchange for increasingly worthless dollars. Meanwhile, under the radar, Goldman Sachs gives new meaning to the term “highway robbery” by facilitating the massive flow of foreign capital in exchange for American highways.”

Goldman Sachs & Co., which made $9 million [!!!] advising Chicago on the Skyway sale and stands to collect about $20 million in fees for putting together the Indiana Toll Road deal, is raising a multibillion-dollar fund to buy infrastructure.
 

The Long and Short of It at Goldman Sachs

Published: December 2, 2007
The New York Times Online

“From what I have observed over the years, Goldman has a fascinating culture. It is sort of like what I imagine the culture of the K.G.B. to be. You always put the firm first. The long-ago scandal of the Goldman Sachs Trading Corporation, which raised hundreds of millions just before the crash of 1929 to create a mutual fund, then used the fund’s money to prop up stocks it owned and underwrote, was a particularly sad example. The fund, of course, went bust.

Now, obviously, Goldman Sachs does many fine deals and has many smart, capable people working for it. But it’s not the Vatican. It exists to make money for the partners and (much farther down the line) the stockholders. The people there are not statesmen. They are salesmen.

Read the rest of this entry »