Controversy Arises Over Proposed Ship Scrapping Facility

A decision by the city of Vallejo, Calif., to award a contract to a company to build a ship scrapping facility in Mare Island, Calif., has generated controversy. California Dry Dock Solutions, a newly formed company, has submitted a plan to turn roughly 17 acres at the Mare Island site into a ship recycling, scrapping and building facility.

However, representatives from Southern Recycling point out that the backers of the California Dry Dock have no experience operating a ship scrapping facility. Polly Parks, a spokeswoman for Southern Recycling--EMR USA, notes that the company was allowed to bid on the vessels without having a facility or lease to process the vessel.
Southern Recycling itself had sought to build a ship scrapping facility at the location. The company, which has been in business since 1900, has been providing ship recycling services in the Gulf Coast area and is pre-qualified by the Maritime Administration.

In comments made to the Vallejo Planning Commission, Parks noted that her company had approached the city, as well as LNR Property Corp. and its commercial leasing agent about acquiring a lease for the Mare Island site roughly 18 months ago. However, this past fall, opted to entertain a proposal by CDDS.

According to local press articles, Dry Dock Solutions first planned venture, bidding on the dismantling and recycling of four federal reserve ships, will be funded by recycling the scrap metal, rather than by the government.

Parks also pointed out that the project is not allowing other companies to bid on the site. Further, in comments made to the Planning Commission, Park notes that while Southeast Recycling has more than 100 years of experience in the recycling industry, the principals of CDDS have limited, if any experience operating a large-scrap metal recycling operation.

Jay Anast - director of Business Operations for CDDS, however, wonders why any company would want to seek federal contracts to recycle the reserve fleet vessels if the government subsidy and proceeds from recycled metal sales were insufficient. While acknowledging that the price of metal has dropped, Anast said the company will just adjust its contract bidding to reflect market conditions.

"Scrap metal recycling is fine, but if ship recycling doesn't make sense, what possible motivation is there for anyone?" Anast said. "Our intent is to be for-profit. We hope to be a profit-making company. If we are not a profit-making company, we will discontinue."

Despite the issues, on Nov. 5, the Vallejo Planning Commission unanimously approved the project proposed by CDDS. The company, which is still seeking permitting and lease agreements, hopes to be operational by next summer, according to the Vallejo Times Herald.

The Suisun Bay Reserve Fleet is one of three anchorages maintained by the Department of Transportation’s Maritime Administration for national defense and national emergency purposes. There are currently 84 non-retention ships moored in the Reserve Fleet, of which 57 are located in Suisun Bay.

Several calls to CDDS and the city of Vallejo Planning Commission were not returned.