Showing posts with label Rising Costs. Show all posts
Showing posts with label Rising Costs. Show all posts
Sunday, July 05, 2009
Tuesday, June 30, 2009
House Bill Would Sharply Raise Cost of Guam Project
House Bill Would Sharply Raise Cost of Guam Project
By Walter Pincus
Tuesday, June 30, 2009
Washington Post
A little-publicized provision in the fiscal 2010 defense authorization bill approved by the House last week would double the $10 billion cost of construction on Guam as part of the realignment of U.S. military forces in the Pacific.
The planned move of 8,000 U.S. Marines and about 3,600 other U.S. military troops and their dependents from Okinawa and mainland Japan to Guam over the next five years was originally expected to cost about $15 billion.
Of that total, $10 billion would be in construction of facilities, family housing and public utilities.
But a provision in last week's House bill would require that construction companies pay their employees working on Guam's realignment construction projects wages equivalent to rates in Hawaii, which are 250 percent higher than those on Guam, according to the Joint Guam Program Office.
The Congressional Budget Office report attached to the House bill estimates the growth in labor costs from this provision alone "would increase the need for discretionary appropriations by about $10 billion over the 2010-2014 period."
The provision was authored by Rep. Neil Abercrombie (D-Hawaii), the fourth-ranking Democrat on the House Armed Services Committee.
Another amendment Abercrombie added to the bill would limit to 30 percent the proportion of foreign workers that would be allowed to work on these projects.
"At a time when a depressed economy has dealt a body blow to our construction industry, the Department of Defense should not even consider turning over badly needed jobs to foreign workers at questionable wages," Abercrombie told his constituents.
"This is a huge opportunity to put Americans to work, in an American territory, building an American military base. My amendments provide clear guidelines to manage the buildup while ensuring quality work for our service members and their families," he added.
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Another provision would require the secretary of labor to report to the House and Senate Armed Services committees by June 30, 2010, "on efforts to expand the recruitment of construction workers in the United States to support this effort; on the ability of labor markets to support the Guam realignment."
Not everyone agreed with Abercrombie's proposals. Rep. J. Randy Forbes (R-Va.), also an Armed Services Committee member, said during debate on the bill, "This provision will lead to inflated wages in Guam, while taking American jobs from construction projects in Texas, Maryland and Virginia."
The realignment, first agreed to in 2006 by the Bush administration and Japanese government, was designed to reduce tensions caused by a large, unwanted American military presence on Okinawa. In February, during her trip to Japan, Secretary of State Hillary Rodham Clinton restated the U.S commitment "to modernize our military posture in the Pacific."
The government of Japan is expected to contribute about $2.8 billion to pay for the move. The U.S. government is to contribute $4.2 billion, and an additional $3.2 billion worth of family housing construction will be financed by third parties, who would then take a fee for managing those properties.
The Congressional Budget Office said it "does not expect the Japanese government to increase its share," thus leaving Washington to pick up the additional costs for construction projects if the provision remains in the bill.
A Government Accountability Office report in April raised questions about whether the U.S. government and the military had made adequate preparations on Guam. The GAO pointed out that military members and their families would create roughly a 14 percent increase in Guam's current population of 171,000, which would "substantially impact Guam's community and infrastructure."
There also would be a need for an estimated 22,000 additional construction workers, at least temporarily.
The GAO suggested that Guam's two major highways would need upgrading to carry the increased traffic. In addition, the island's major port would have to double its capacity.
Its electric capacity would need a major buildup, as would its water and wastewater systems, which the GAO said are near capacity already. The estimate was that the latter would have to be increased by 25 percent.
One question was who would fund the additional demands on Guam's roads, schools and public utilities. In last week's bill, the House expressed its "sense of the Congress that utility improvements on Guam should incorporate military and civilian utilities on Guam into a unified [electric] grid."
By Walter Pincus
Tuesday, June 30, 2009
Washington Post
A little-publicized provision in the fiscal 2010 defense authorization bill approved by the House last week would double the $10 billion cost of construction on Guam as part of the realignment of U.S. military forces in the Pacific.
The planned move of 8,000 U.S. Marines and about 3,600 other U.S. military troops and their dependents from Okinawa and mainland Japan to Guam over the next five years was originally expected to cost about $15 billion.
Of that total, $10 billion would be in construction of facilities, family housing and public utilities.
But a provision in last week's House bill would require that construction companies pay their employees working on Guam's realignment construction projects wages equivalent to rates in Hawaii, which are 250 percent higher than those on Guam, according to the Joint Guam Program Office.
The Congressional Budget Office report attached to the House bill estimates the growth in labor costs from this provision alone "would increase the need for discretionary appropriations by about $10 billion over the 2010-2014 period."
The provision was authored by Rep. Neil Abercrombie (D-Hawaii), the fourth-ranking Democrat on the House Armed Services Committee.
Another amendment Abercrombie added to the bill would limit to 30 percent the proportion of foreign workers that would be allowed to work on these projects.
"At a time when a depressed economy has dealt a body blow to our construction industry, the Department of Defense should not even consider turning over badly needed jobs to foreign workers at questionable wages," Abercrombie told his constituents.
"This is a huge opportunity to put Americans to work, in an American territory, building an American military base. My amendments provide clear guidelines to manage the buildup while ensuring quality work for our service members and their families," he added.
ad_icon
Another provision would require the secretary of labor to report to the House and Senate Armed Services committees by June 30, 2010, "on efforts to expand the recruitment of construction workers in the United States to support this effort; on the ability of labor markets to support the Guam realignment."
Not everyone agreed with Abercrombie's proposals. Rep. J. Randy Forbes (R-Va.), also an Armed Services Committee member, said during debate on the bill, "This provision will lead to inflated wages in Guam, while taking American jobs from construction projects in Texas, Maryland and Virginia."
The realignment, first agreed to in 2006 by the Bush administration and Japanese government, was designed to reduce tensions caused by a large, unwanted American military presence on Okinawa. In February, during her trip to Japan, Secretary of State Hillary Rodham Clinton restated the U.S commitment "to modernize our military posture in the Pacific."
The government of Japan is expected to contribute about $2.8 billion to pay for the move. The U.S. government is to contribute $4.2 billion, and an additional $3.2 billion worth of family housing construction will be financed by third parties, who would then take a fee for managing those properties.
The Congressional Budget Office said it "does not expect the Japanese government to increase its share," thus leaving Washington to pick up the additional costs for construction projects if the provision remains in the bill.
A Government Accountability Office report in April raised questions about whether the U.S. government and the military had made adequate preparations on Guam. The GAO pointed out that military members and their families would create roughly a 14 percent increase in Guam's current population of 171,000, which would "substantially impact Guam's community and infrastructure."
There also would be a need for an estimated 22,000 additional construction workers, at least temporarily.
The GAO suggested that Guam's two major highways would need upgrading to carry the increased traffic. In addition, the island's major port would have to double its capacity.
Its electric capacity would need a major buildup, as would its water and wastewater systems, which the GAO said are near capacity already. The estimate was that the latter would have to be increased by 25 percent.
One question was who would fund the additional demands on Guam's roads, schools and public utilities. In last week's bill, the House expressed its "sense of the Congress that utility improvements on Guam should incorporate military and civilian utilities on Guam into a unified [electric] grid."
Sunday, June 07, 2009
Navy Raises Water Rate
Navy raises water rate
Sunday, 07 June 2009
Marianas Variety News Staff
(Navy) – The Naval Facilities Engineering Command Marianas has notified the Consolidated Commission on Utilities that the Navy will charge $4.06 per 1,000 gallons of water supplied to the Guam Waterworks and Power Authorities beginning Oct. 1.
This rate is consistent with the Navy’s promise toward graduated rate adjustments designed to minimize financial impact to GWA and GPA, and to bring the previously reduced water rate in line with the rate charged to Navy and other Department of Defense customers, according to a press release from the Navy.
The fiscal year 2009 rate of $3.80 for GWA and GPA was less than the rate paid by Navy and other DoD customers.
According to the Navy, the adjustment is based on the current cost of operations and maintenance to continue to produce reliable and safe drinking water to the Naval Base and other customers in the southern villages of Agat, Santa Rita, Piti, Nimitz Hill, parts of Asan and Maina, and the Apra Harbor area.
“The Navy operates, maintains and repairs its water production and distribution system through the Navy Working Capital Fund (NWCF) and not direct appropriated funds,” said Capt. Paul Fuligni, NAVFAC Marianas commanding officer. “As such, our rates are developed to cover the operation and maintenance of our water system,” he added.
In a letter to CCU chairman Simon Sanchez, Fuligini said the Navy’s current projection is for a water rate of approximately $4.12 per 1,000 gallons. “However,” he added, “this rate is subject to further review and adjustment.”
Sunday, 07 June 2009
Marianas Variety News Staff
(Navy) – The Naval Facilities Engineering Command Marianas has notified the Consolidated Commission on Utilities that the Navy will charge $4.06 per 1,000 gallons of water supplied to the Guam Waterworks and Power Authorities beginning Oct. 1.
This rate is consistent with the Navy’s promise toward graduated rate adjustments designed to minimize financial impact to GWA and GPA, and to bring the previously reduced water rate in line with the rate charged to Navy and other Department of Defense customers, according to a press release from the Navy.
The fiscal year 2009 rate of $3.80 for GWA and GPA was less than the rate paid by Navy and other DoD customers.
According to the Navy, the adjustment is based on the current cost of operations and maintenance to continue to produce reliable and safe drinking water to the Naval Base and other customers in the southern villages of Agat, Santa Rita, Piti, Nimitz Hill, parts of Asan and Maina, and the Apra Harbor area.
“The Navy operates, maintains and repairs its water production and distribution system through the Navy Working Capital Fund (NWCF) and not direct appropriated funds,” said Capt. Paul Fuligni, NAVFAC Marianas commanding officer. “As such, our rates are developed to cover the operation and maintenance of our water system,” he added.
In a letter to CCU chairman Simon Sanchez, Fuligini said the Navy’s current projection is for a water rate of approximately $4.12 per 1,000 gallons. “However,” he added, “this rate is subject to further review and adjustment.”
Monday, July 14, 2008
Farmers Face Difficulties
Farmers face difficulties:
Farmers co-op would help agricultural leaseholders
By Steve Limtiaco
Pacific Daily News
July 15, 2008
Dededo farmer Ernie Wusstig, who leases 20 acres of agricultural land from the Chamorro Land Trust, said there are many farmers who use their Land Trust property.
"But a lot of them aren't using it either," he said. "They're planting (junk) cars."
Wusstig, who is using his leased property to grow sweet corn -- which he sells along the roadside in Barrigada -- doesn't fault those who aren't using the land.
It's more expensive than ever to farm on Guam, he said, because of increases in the price of water and fertilizer. The water agency increased the price per gallon for agricultural accounts, and fertilizer that used to cost $600 a ton now costs $1,200.
And there also isn't a consistent market for local produce, he said -- one of the reasons he sells produce on his own instead of to local grocery stores. Grocery stores sometimes buy local only until their off-island shipments arrive, he said.
But ongoing efforts to form a farmers cooperative could change all that, he said, and make it easier and profitable for those with agricultural leases from the Land Trust to begin using their land.
Of the 3,666 leases issued by the Land Trust, 955 are one acre or larger, which means they are considered agricultural leases.
The Land Trust requires agricultural leaseholders to use their land -- at least two-thirds must be cultivated at all times -- or risk losing it, but that requirement hasn't been enforced since the Land Trust lease program was implemented nearly 13 years ago.
Land is leased for 99 years to Chamorros -- defined by law as those who are citizens because of the Organic Act, or their descendants.
"With the military coming in, we're going to be using more produce. I believe our farmers can supply that. We've got to plan it out good and make it work," said Wusstig, who is vice president of the new cooperative's board of directors.
The involvement of Land Trust leaseholders is critical to the success of the new farmers cooperative because the Land Trust administers 90 percent of the island's agricultural land, particularly the larger parcels, said Bob Barber, agricultural economist for the University of Guam's Cooperative Extension Service.
Wusstig said the Cooperative Extension Service currently is working on grants for a feasibility study and is entering into an agreement with the Guam Hotel and Restaurant Association to begin supplying local produce to its member businesses.
Farmers co-op would help agricultural leaseholders
By Steve Limtiaco
Pacific Daily News
July 15, 2008
Dededo farmer Ernie Wusstig, who leases 20 acres of agricultural land from the Chamorro Land Trust, said there are many farmers who use their Land Trust property.
"But a lot of them aren't using it either," he said. "They're planting (junk) cars."
Wusstig, who is using his leased property to grow sweet corn -- which he sells along the roadside in Barrigada -- doesn't fault those who aren't using the land.
It's more expensive than ever to farm on Guam, he said, because of increases in the price of water and fertilizer. The water agency increased the price per gallon for agricultural accounts, and fertilizer that used to cost $600 a ton now costs $1,200.
And there also isn't a consistent market for local produce, he said -- one of the reasons he sells produce on his own instead of to local grocery stores. Grocery stores sometimes buy local only until their off-island shipments arrive, he said.
But ongoing efforts to form a farmers cooperative could change all that, he said, and make it easier and profitable for those with agricultural leases from the Land Trust to begin using their land.
Of the 3,666 leases issued by the Land Trust, 955 are one acre or larger, which means they are considered agricultural leases.
The Land Trust requires agricultural leaseholders to use their land -- at least two-thirds must be cultivated at all times -- or risk losing it, but that requirement hasn't been enforced since the Land Trust lease program was implemented nearly 13 years ago.
Land is leased for 99 years to Chamorros -- defined by law as those who are citizens because of the Organic Act, or their descendants.
"With the military coming in, we're going to be using more produce. I believe our farmers can supply that. We've got to plan it out good and make it work," said Wusstig, who is vice president of the new cooperative's board of directors.
The involvement of Land Trust leaseholders is critical to the success of the new farmers cooperative because the Land Trust administers 90 percent of the island's agricultural land, particularly the larger parcels, said Bob Barber, agricultural economist for the University of Guam's Cooperative Extension Service.
Wusstig said the Cooperative Extension Service currently is working on grants for a feasibility study and is entering into an agreement with the Guam Hotel and Restaurant Association to begin supplying local produce to its member businesses.
Friday, June 06, 2008
Unclear How Guam Will Be Impacted by Continental's Cuts
Impact of airline's cuts on Guam still unclear
By Gaynor Dumat-ol Daleno
Pacific Daily News
June 7, 2008
The parent company of Guam-based Continental Micronesia announced it will reduce flights and lay off about 3,000 managers and employees worldwide because of jet fuel prices.
"Our fuel expense this year would be $2.3 billion more than it was last year. That increase alone amounts to about $50,000 per employee," Houston-based Continental Airlines stated in a bulletin to employees.
What Continental Airlines' cutbacks mean to its employees on Guam and the rest of Micronesia is unclear at this time. Continental Micronesia's Guam office isn't commenting on the flight cuts and layoffs announced by its parent company's corporate office.
Grace Garces, with Continental Micronesia's marketing office, said there's nothing to add to what corporate has announced.
On Guam, Continental Micronesia employs about 1,500 people and its $90 million annual payroll has been an asset to the local economy.
When Continental Airlines trimmed as many as 12,000 of its 56,000 global workforce weeks after 9/11, about 250 Continental Micronesia employees were furloughed, according to Pacific Daily News files.
"Continental doesn't anticipate any further comment until after it has had the opportunity to meet with employees during the next week," the airline's Houston corporate office stated.
The airline stated fare increases haven't been enough to cover its soaring jet fuel costs.
They acknowledged, with higher fares, fewer people will fly.
"As fewer customers fly, we will need to reduce our capacity. ... As we reduce our capacity, we will need fewer employees to operate the airline," according to the company statement to its employees.
Continental's 3,000 global job cuts translate to almost a 7 percent reduction in its 45,000 global workforce. The job reductions will take effect after the peak summer season, except for management and clerical reductions, which will begin sooner, the airline states.
"The company will offer voluntary programs in an effort to reduce the number of co-workers who will be furloughed or involuntarily terminated due to the capacity cuts. Details of these programs will be available next week," the airline states.
The airline industry is facing its worst crisis since the terror attacks in 2001, Continental states.
Guam tourism
There's concern globally in the tourism and travel industry about soaring fuel prices, said Gerry Perez, Guam Visitors Bureau general manager.
He said airlines in general are trying to cope by reducing flights and maximizing capacity. The best way to insulate Guam from the impact of any reduction in flights is to aggressively promote the island, he said.
But the visitors bureau's marketing cash has been dwindling, from as much as $18 million for Japan marketing alone in the late 1990s to less than $6 million for Japan marketing last year.
When fuel prices make travel to longer-haul destinations more expensive, Perez said there's a possible "a silver lining" for Guam in the race for tourists from Japan.
But Perez said that silver lining is "a maybe."
Overall, fuel-related economic jitters and the global credit crunch have dampened enthusiasm for travel worldwide, he said.
Still, Guam's visitor arrivals in May showed a rebound from April. Preliminary arrival numbers show Japanese arrivals went up 5 percent and South Korean arrivals increased 15 percent last month compared to May last year, Perez said.
Houston cuts
Continental Chairman and Chief Executive Lawrence Kellner, and President Jeff Smisek, will forgo pay for the rest of the year, the airline stated.
Last year, Kellner's salary was $712,500 and total compensation was valued at nearly $6 million by the company, down 9.3 percent from the year before, according to an analysis by The Associated Press of a company filing with the Securities and Exchange Commission.
However, about one-third of Kellner's compensation was in stock and option grants that are now worth far less than they were when granted in February 2007, because of the slump in the company's stock, the AP reported.
Fewer flights
The airline states it will implement flight reductions in September, at the end of the summer season. Available seats for domestic flights will drop by about 11 percent in the fourth quarter, compared to the same period last year.
Continental will retire 67 Boeing 737-300 and 737-500 aircraft between now and next year and replace them with fuel-efficient aircraft, the airline states.
In the second half of this year, Continental will receive its order for 16 new, next-generation Boeing 737-800s and 737-900ERs. It will receive 18 more of the fuel-efficient aircraft next year. Continental's fleet will shrink from 375 this year to 344 aircraft next year.
Jet fuel is at $151 a barrel now, a 75 percent increase from a year ago, according to Continental.
By Gaynor Dumat-ol Daleno
Pacific Daily News
June 7, 2008
The parent company of Guam-based Continental Micronesia announced it will reduce flights and lay off about 3,000 managers and employees worldwide because of jet fuel prices.
"Our fuel expense this year would be $2.3 billion more than it was last year. That increase alone amounts to about $50,000 per employee," Houston-based Continental Airlines stated in a bulletin to employees.
What Continental Airlines' cutbacks mean to its employees on Guam and the rest of Micronesia is unclear at this time. Continental Micronesia's Guam office isn't commenting on the flight cuts and layoffs announced by its parent company's corporate office.
Grace Garces, with Continental Micronesia's marketing office, said there's nothing to add to what corporate has announced.
On Guam, Continental Micronesia employs about 1,500 people and its $90 million annual payroll has been an asset to the local economy.
When Continental Airlines trimmed as many as 12,000 of its 56,000 global workforce weeks after 9/11, about 250 Continental Micronesia employees were furloughed, according to Pacific Daily News files.
"Continental doesn't anticipate any further comment until after it has had the opportunity to meet with employees during the next week," the airline's Houston corporate office stated.
The airline stated fare increases haven't been enough to cover its soaring jet fuel costs.
They acknowledged, with higher fares, fewer people will fly.
"As fewer customers fly, we will need to reduce our capacity. ... As we reduce our capacity, we will need fewer employees to operate the airline," according to the company statement to its employees.
Continental's 3,000 global job cuts translate to almost a 7 percent reduction in its 45,000 global workforce. The job reductions will take effect after the peak summer season, except for management and clerical reductions, which will begin sooner, the airline states.
"The company will offer voluntary programs in an effort to reduce the number of co-workers who will be furloughed or involuntarily terminated due to the capacity cuts. Details of these programs will be available next week," the airline states.
The airline industry is facing its worst crisis since the terror attacks in 2001, Continental states.
Guam tourism
There's concern globally in the tourism and travel industry about soaring fuel prices, said Gerry Perez, Guam Visitors Bureau general manager.
He said airlines in general are trying to cope by reducing flights and maximizing capacity. The best way to insulate Guam from the impact of any reduction in flights is to aggressively promote the island, he said.
But the visitors bureau's marketing cash has been dwindling, from as much as $18 million for Japan marketing alone in the late 1990s to less than $6 million for Japan marketing last year.
When fuel prices make travel to longer-haul destinations more expensive, Perez said there's a possible "a silver lining" for Guam in the race for tourists from Japan.
But Perez said that silver lining is "a maybe."
Overall, fuel-related economic jitters and the global credit crunch have dampened enthusiasm for travel worldwide, he said.
Still, Guam's visitor arrivals in May showed a rebound from April. Preliminary arrival numbers show Japanese arrivals went up 5 percent and South Korean arrivals increased 15 percent last month compared to May last year, Perez said.
Houston cuts
Continental Chairman and Chief Executive Lawrence Kellner, and President Jeff Smisek, will forgo pay for the rest of the year, the airline stated.
Last year, Kellner's salary was $712,500 and total compensation was valued at nearly $6 million by the company, down 9.3 percent from the year before, according to an analysis by The Associated Press of a company filing with the Securities and Exchange Commission.
However, about one-third of Kellner's compensation was in stock and option grants that are now worth far less than they were when granted in February 2007, because of the slump in the company's stock, the AP reported.
Fewer flights
The airline states it will implement flight reductions in September, at the end of the summer season. Available seats for domestic flights will drop by about 11 percent in the fourth quarter, compared to the same period last year.
Continental will retire 67 Boeing 737-300 and 737-500 aircraft between now and next year and replace them with fuel-efficient aircraft, the airline states.
In the second half of this year, Continental will receive its order for 16 new, next-generation Boeing 737-800s and 737-900ERs. It will receive 18 more of the fuel-efficient aircraft next year. Continental's fleet will shrink from 375 this year to 344 aircraft next year.
Jet fuel is at $151 a barrel now, a 75 percent increase from a year ago, according to Continental.
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