Maritime Administration Awards Contract to Remove Ships from James River Reserve Fleet

The U.S. Maritime Administration (MARAD) today announced a contract award of $2.2 million for the disposal of three high priority ships from the James River Reserve Fleet.

"The award of this contract is welcome progress," said U.S. Secretary of Transportation Norman Y. Mineta. "Working in cooperation with Congress has provided us with the program flexibility needed to remove ships from the James River Reserve Fleet in an expeditious and cost effective manner.

MARAD serves as the U.S. Government's disposal agent for merchant type vessels of 1,500 gross tons or more. There are approximately 130 obsolete vessels located in three fleet sites of the National Defense Reserve Fleet, and more than 70 are located in the James River Reserve Fleet in Newport News, VA. In fiscal year 2003, Congress appropriated $31 million dollars for ship disposal.

ESCO Marine of Brownsville, TX was awarded the contract through the Invitation for Bid process, which had two steps. First, companies laid out their technical proposals, and those were evaluated. The five companies that met the technical qualifications were then allowed to bid on the ship disposal contract. This is the second contract awarded this year to a ship disposal facility in Brownsville, TX. In February 2003, Marine Metals was awarded $600,000 to remove two high priority vessels from the James River Reserve Fleet.

Maritime Administrator Captain William G. Schubert announced the latest contracts at a field hearing held today near the James River Reserve Fleet site at Fort Eustis, Virginia. "This issue has been an intense focus during my tenure," said Schubert, who pointed out that MARAD has used a variety of processes to find cost-effective ways to dispose of the obsolete ships. "We have seen more competition and a significant decrease in disposal proposal costs since we first began paying for services in FY 2001." He acknowledged the possible risk the ships pose to the environment, and said, "Eliminating the risk to the environment by removing obsolete ships is what the Department of Transportation and the Maritime Administration intend to achieve."

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