With plans by the Port of Long Beach to build a terminal for the China Ocean Shipping Co. on the verge of being killed by a congressional committee, the neighboring Port of L.A. is stepping up its efforts to land the shipping giant.
Port of L.A. officials will meet with top executives of the controversial Chinese government-owned shipping line in Los Angeles later this month to discuss a possible lease arrangement for a state-of-the-art, build-to-suit facility on the port's new Pier 400 development, said port Director Larry Keller.
"I think our prospects are good," Keller said. "There has been a very active dialogue, and those things don't happen unless they are interested."
Keller's optimism stands in contrast to the mood at the Port of Long Beach, which was dealt a severe blow last week when a congressional conference committee considering the annual defense authorization bill agreed to include language that would bar the shipping line, known as Cosco, from leasing terminal space on the redeveloped site of the former Long Beach Naval Station.
Opponents of that project, led by Sen. James M. Inhofe, R-Okla., have raised fears that the facility could serve as a base for espionage, smuggling and other illegal activities.
Port officials and their supporters have argued that Cosco, a port tenant for 17 years, is simply a commercial operation that poses no national security risk. But recent controversies over technology transfers to China and alleged Chinese contributions to U.S. political campaigns have tended to overshadow such arguments.
The conference committee which is haggling over a host of other issues, such as gender-integrated training in the military and the production of tritium for use in nuclear weapons is scheduled to meet again this week. A final decision on the bill is expected before Congress adjourns for the year next month.
Should the legislation pass with the anti-Cosco language, the Port of Long Beach will attempt to shuffle some of its current tenants and reconfigure existing terminals to accommodate the shipping line, said port spokeswoman Yvonne Avila.
"We will sit down with Cosco and look at alternatives. We could offer them something every bit as good" as the Naval Station property, she said.
But the Port of Los Angeles is crafting a proposal of its own. The port is in the midst of building Pier 400, an ambitious landfill project in the San Pedro Bay, which will include a $365 million, 315-acre container terminal with on-dock rail capabilities. The project is scheduled for completion in 2003, and port officials have offered to lease the terminal to Cosco.
The site, port officials point out, has never been used as a military base and as a result is free from the symbolic baggage that has plagued the Naval Station.
Cosco officials have had a "concrete proposal" from the Port of L.A. in their hands since May, Keller said. Port officials last spoke with Cosco representatives about three weeks ago, he added, "to reiterate the deal, and clarify some information that they requested on financial details."
The stakes for Long Beach and Los Angeles are high. China is the region's second-largest trading partner, with more than $18 billion worth of cargo moving between L.A. and China a year. Cosco handles about 25 percent of U.S.-China trade.
The port is in negotiations with three other shipping lines interested in a terminal on the property and hopes to have a deal signed by the end of the year, Keller said.
A Los Angeles-Cosco deal also faces potential opposition. While the bulk of the funds to build Pier 400 were raised by the port, the project also received about $116 million in federal funds, about a quarter of the project's total price tag a fact that could spark concern in Congress.
"Congress would probably have the ability to block Cosco in Los Angeles," said Avila. "It's only moving them from one point to another in the same harbor."
Gary Hoitsma, an aide to Inhofe, said the senator would be troubled by a large Cosco presence in Los Angeles, and could very well come back next session with legislation targeted at a Cosco terminal there.
"Our language is specifically targeted to the Long Beach base, but we would have concerns if they tried to do something somewhere else," Hoitsma said. "Our concern is a national security concern about Cosco. It is not specifically related to any one facility."
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