Port of L.A. Rejects Bids for ‘Green Terminal’

Despite Mayor James K. Hahn’s vow to reduce air pollution at the harbor, Port of Los Angeles officials last week weakened a plan to limit emissions from ships at a much-touted new “green terminal” intended as a national model.

The port has rejected all four bids from shipping companies vying for the coveted site on Terminal Island, including two that promised to meet the port’s goal of operating 80% of their ships with electrical power while docked -- rather than with diesel engines -- within two years, according to documents The Times obtained from the port.

Instead, the port launched new bidding last week with a less ambitious target for reducing pollution, requiring that 70% of docked ships use electricity within three years.

The change mystified and angered at least one of the shipping companies. Some environmentalists charged that the port weakened the requirements to benefit shipping firms that could not meet the tougher standard.

“The bottom line is that people in Los Angeles will breathe the fumes of these ships for another year,” said Gail Ruderman Feuer, a senior attorney for the Natural Resources Defense Council.

Port officials have offered several reasons for rejecting the bids, including that the initial request for proposals called the pollution reduction a “goal,” while the new request makes it a requirement. “That’s a huge difference,” said Bruce Seaton, the port’s interim executive director.

The controversy has clouded the port’s first-ever formal bidding for a container terminal, which was prompted by a stinging 2003 audit from City Controller Laura Chick complaining of no-bid leases and backroom deals.

Port and city officials have been trying to lease the four berths, known as the Matson terminal after a former tenant, for more than two years. Their fitful and confused efforts to cut a deal have come under the scrutiny of federal investigators in an ongoing probe into city and port contracting practices. The U.S. attorney’s office last spring requested the minutes of talks about potential tenants

The new documents show that two of the four bidders met the city’s goals for reducing pollution with “cold ironing,” in which docked ships plug into onshore electric power.

Plugging in a single ship per day, rather than relying on diesel power to operate the ship’s equipment, can eliminate a ton of nitrogen oxides, one of the most toxic port pollutants. Ships, trucks and trains calling at the Los Angeles-Long Beach port complex released more than 100 tons of nitrogen oxides daily in 2001. The port is the largest air polluter in Southern California.

Public concern about port air pollution has grown swiftly in recent months in the wake of research showing that it can permanently stunt children’s lung growth and that residents downwind of the ports and the 710 Freeway have unusually high rates of certain lung and throat cancers.

Two of the four shipping companies seeking to become new port tenants -- P&O; Nedlloyd Container Line Ltd. of London and Hong Kong-based Orient Overseas Container Line -- pledged to meet the port’s goal of reducing pollution by switching 80% of the ships docked at the property from diesel power to electricity within two years.

A P&O; Nedlloyd official said he does not understand why the bids were rejected. “It’s confusing and frustrating, and we’re trying to make sense of it,” said the official, who asked not to be named. “This just means the process is being pushed back, and it doesn’t need to be.”

The two other bidders -- Evergreen Marine Corp. of Taiwan and Tokyo-based Yusen Terminal Inc., existing port tenants -- did not meet the plug-in goal. Evergreen proposed switching to electricity at other berths and Yusen wants to turn the land into a storage yard.

Port officials have offered a number of reasons for rejecting the bids, including apparent confusion among shipping firms about the terms of the first request and a desire to notify bidders that proposals will be made public before a tenant is chosen.

Seaton added that the port also wanted to insist on a new environmental rule, requiring ships calling at the terminal to reduce speed 40 miles offshore rather than 20 miles, which vessel operators now do voluntarily.

Slower ships produce less pollution, but clean-air groups counter that this requirement would be far less effective than swiftly switching ships at the Matson terminal to electric power from the dock.

“It defies logic that the port would be prepared to scrap the entire bid process that would create the greenest terminal in the world in order to require this additional measure,” several environmental groups wrote last week in a letter to Hahn.

Seaton said the port also anticipated delays in its cold ironing schedule because the Department of Water and Power needed time to build the needed electrical infrastructure.

A DWP spokeswoman said that the department could provide electrical service for the ships by 2006 and could have service at one berth within three months. “We’ve been working closely with the port and see no problems whatsoever with meeting our obligations,” said spokeswoman Mary Lemelle.

If DWP can meet that target, Feuer said, “the Board of Harbor Commissioners should reinitiate the process and award the bid to the greenest terminal.”

Critics speculate that the port rejected the bids and altered its request to favor one of its existing tenants, Evergreen or Yusen, a subsidiary of Nippon Yusen Kabushiki Kaisha, or NYK, based in Tokyo.

“It looks to us like they are trying to delay or weaken the requirement to enable Evergreen or NYK to get the bid, and that approach smells foul,” Feuer said.

Port officials deny that politics played a role. “It’s disappointing that she feels that that’s our intention, because that’s not our intention,” said port spokesman Arley Baker.

The mayor’s office, however, is known to have favored leasing the land to Evergreen as part of a deal to get a sister company to move its air cargo operations from Los Angeles International Airport to Ontario airport.

“We’re not backing anyone,” Deputy Mayor Doane Liu said. “I think that’s old stuff.”

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Times staff writers Jessica Garrison, Jack Leonard and Jeffrey L. Rabin contributed to this report.