Port Security Faces Funding Abyss

Not long after terrorists hijacked jetliners and killed thousands of people in the terror attacks of 2001, the United States was hit with a sobering realization

Terminal and vessel security, the third leg of the three-legged stool, is a tall order. By their nature, port sites offer easy access from the water. They're typically near large population centers. And thousands of people from all walks of life work there. Congress wants to make sure the sites and vessels have enough security personnel, gates, fencing, lighting, surveillance and video systems for security. And they also need to upgrade in the next few years to accommodate new transportation worker cards that use fingerprinting or other biometrics.

Each was to submit a security plan to the Coast Guard by last Dec. 31 and, after Coast Guard approval, began abiding by the plan, starting July 1. About 3,147 sites nationwide -- including about 70 in Hampton Roads -- have to abide by the new rules, as do about 9,000 ships and vessels.

Some federal money has come. Since 2002, Congress has given out about $491 million in grants. The Virginia Port Authority oversees Norfolk International Terminals, Portsmouth Marine Terminal and Newport News Marine Terminal. It's received about $9 million in three grants, covering part of the more than $25 million it says it needs for security in the next few years. The VPA has used the money for, among other things, radiation portals, surveillance cameras, an access-control system and a new command and control center. But more demand for grants is on the way -- and soon. Many small port sites didn't even realized until late last year that they had to abide by the security regulations. They're just now applying for grants. The Coast Guard can issue fines of up to $25,000 for sites that aren't following their plans, and initial compliance inspections are under way now.

Homeland Security Secretary Tom Ridge has argued that the maritime industry needs to pay for making its sites more secure. The president's budget proposal submitted to Congress earlier this year gave another indication of where the administration stands: The proposal, for fiscal 2005 that begins in October, contained $46 million for the port-security grant program -- only about 12 percent of what the industry says it needs each year to pay the costs -- and didn't offer any other financing.

The Senate has since upped that to $150 million and the House to $125 million, with the difference between the chambers to be ironed out in conference committee.

Those who say the industry needs to step up to pay the security costs say the new measures can be good for traditional business reasons, like preventing theft and tracking products. And with the federal budget deficit growing, they say, the government can pay only so much.

"It would be nice to think the federal government would pick up the entire tab, but realism has to kick in," said Coast Guard Rear Adm. Sally Brice-O'Hara, commander of District 5, which includes Hampton Roads.

"It has to be a shared solution."

But the American Association of Port Authorities -- an industry lobbying group -- argues that because fighting terrorism is a national effort, the whole country should chip in, providing grants out of federal coffers.

"If you look at the finances at most of states with ports -- like Virginia, California and New York -- none of these states can afford this unfunded mandate," said Bouchard of Zeltech.

"This is saying, 'You, citizens of Virginia, will pay for the security of the citizens of the Midwest.'

"And we have a fundamental complaint about that."

Some port sites and carriers have decided to go it alone, unilaterally collecting a security fee to begin paying for port security and meet the federal requirements.

Maersk Sealand -- the world's largest container carrier that does strong business at Portsmouth -- said that beginning Oct. 2, it would charge shippers a $6-a-container security fee.

But many ports say they won't add such a fee on their own.

If Hampton Roads sites institute such a fee without a national rate, the theory goes, the local port could lose cargo shipments to Savannah, Ga.; New York-New Jersey; Baltimore; or other East Coast ports that still don't have such fees.