Water Ways

By Ray Pendleton

Saturday, April 14, 2001

No provision for
privatization in Senate bill

AN E-MAIL question came in from BOATS/HAWAII, a lobbying organization for boaters, "Could they somehow twist this into privatization?"

"This" referred to Senate Bill 755, and "they" were our state legislators and, perhaps, the Board of Land and Natural Resources.

In its current form, S.B. 755, Senate Draft 2, basically states that the private development of harbor facilities on state lands should be encouraged to save taxpayers the burden of funding construction or improvements.

Further, it goes on to say -- with surprising directness -- that private development, rather than public, would more likely result in projects being completed on time.

With those justifications, the bill proposes allowing the Department of Transportation's Harbors Division and the Department of Land and Natural Resources to enter into "capital advancement contracts" with private developers.

The value of these contracts would not exceed $2 million for public improvements of small boat and commercial harbor facilities without legislative approval. However, capital advancement contracts of up to $5 million could be made with legislative approval.

The bill proposes an amendment to the Hawaii Revised Statutes stating that the BLNR may enter into a capital advancement contract with a private party for any public improvement or construction of a state small boat harbor, provided the Chairperson finds it to be in the best interest of the state.

It lists three criteria to be used:

1. Private development is likely to be less costly than any other type of contract.

2. Private development provides needed public improvements on a significantly more timely basis.

3. Public financing for public improvements is not available on a timely basis.

The amendment also provides that the private party may be reimbursed by a legislative appropriation, or by credit from its future rental or tariff payments to the state, provided the contract ensures the state will benefit financially and the public's use of the facility is maintained.

At this point, SB 755 has passed through all of its committee hearings in both houses of the legislature, so it would seem to have a good chance of becoming law. But, will its passage allow some sort of privatization of operations in our small boat harbors?

AFTER SOME DISCUSSION with a reliable source at the DLNR's Boating and Ocean Recreation division, I think we can rest assured that it will not.

First, these capital advancement contracts are for construction projects that must be deeded to the state when completed.

For instance,a loading dock financed by a cruise ship company for passengers on Kauai could be operational much faster than one depending on state-financed construction. It could therefore be in the cruise ship industry's best interest to put up the capital for such a project, knowing it would be repaid later, or it would be assessed lower, or no user fees until the project was paid off.

There is nothing in the language of this bill that even suggests any future management or operational transformation to the private sector for our state-run marinas.

On the other hand, are we sure that would be all bad?

Ray Pendleton is a free-lance writer based in Honolulu.
His column runs Saturdays in the Star-Bulletin.
He can be reached by e-mail at

E-mail to Sports Editor

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]

© 2001 Honolulu Star-Bulletin