HARRISBURG - This is a tale of how our tax dollars are being used to buy foreign products that could be produced in the United States.

And so it is with a $430 million publicly funded arrangement to bring the Swedish shipbuilder Kvaerner ASA to the old Philadelphia Navy Yard.

The deal, subsidized with nearly $500 million in federal, state and local tax dollars, was sold to legislators last spring on the basis of creating at least 1,000 new jobs in Philadelphia. It came with a solemn promise that all of Pennsylvania - particularly the economically sluggish Greater Pittsburgh area - would benefit by supplying steel, equipment and other components for the new enterprise.

But that ain't necessarily so.

A controversy has erupted 10 months before Kvaerner is slated to begin operations.

The Swedish shipbuilder has ordered a specialized horizontal gantry crane from Portugal. The 250-foot-high unit will be built to lift 600 tons and cost around $28 million.

Paul Tufano, the governor's chief legal counsel, signed off on using subsidy tax dollars for the foreign-made crane purchase. He chairs a special state agency overseeing reconstruction of the old Navy Yard for commercial shipbuilding purposes.

Tufano claimed, "There is nobody in the United States who could build that crane."

And that ain't necessarily so, either.

Both the 1998 edition of the Thomas Registry of Products and Services and the 1997 Edition of the U.S. Industrial Directory indicate at least 50 U.S. companies build heavy-capacity cranes. That list includes Century Crane, of West Mifflin, Allegheny County.

A company spokesman said Century Crane could have and would have built the crane, if given a chance. But he stressed the firm was never invited to bid on the job.

Century could have delivered the finished product in 18 to 22 weeks, according to spokesman Herm Stetzer. That would have been well before Kvaerner's scheduled June 1999 start-up date.

Representatives of other U.S-based industrial crane makers offered similar comments, when surveyed last week by the Tribune-Review. Virtually all said they were unaware of the Kvaerner situation because there were no bidding invitations.

The only exception was Edderer Inc. of Seattle, Wash. "We declined (to bid) after studying the specifications," said spokesman James Nelson. That refusal to bid, he said, was based on technical problems.

However, he stressed that Edderer Inc. aggressively pursued the specifications. Kvaerner never approached the Seattle-based firm with a bidding proposal, he said.

Kvaerner will also purchase most of its specialty construction steel from foreign producers, it was announced. The reason: The type needed is not made here anymore.

While U.S.-based specialty steelmakers were not surveyed, at least two regional lawmakers speculated the American steel makers were probably not invited to participate in the Philadelphia Navy Yard conversion project.

"This is absolutely outrageous," said state Rep. Richard Olasz, a West Mifflin Democrat, who claims many Century Crane employees as his constituents. "(Kvaerner) could have looked around for an American company, and particularly a Pennsylvania company, to bid on the crane deal," he said.

State Senate Democratic Whip Leonard Bodack of Pittsburgh's Lawrenceville section blasted Republican Gov. Tom Ridge for the controversy. "This typifies how insensitive this administration is to the working people of Pennsylvania, particularly those in the Greater Pittsburgh area."

Bodack, who is also the Allegheny County Democratic chairman, is expected to actively campaign against the governor's re-election bid this year.

Administration spokesman Jerry Feaser tried to "spin" the issue last week by claiming no U.S. company could have built the controversial crane in the time frame and at the price required by Kvaerner.

"But they didn't ask anyone in Pennsylvania, or the U.S.A.," Olasz said.

Southwestern Pennsylvania was promised economic benefits in exchange for the tax dollar subsidy, Bodack said. "It's another broken promise," he said.

Ridge is obviously concerned about the controversy. He announced on Tuesday the administration would hire a consultant to ensure Kvaerner purchases future supplies and equipment from Pennsylvania or other U.S. firms.

But the crane controversy is likely to be a point of partisan contention in this year's election in southwestern Pennsylvania.

Yet, it could have all been avoided if someone at Kvaerner or the agency created to oversee the Philly shipyard deal had just asked or invited Pennsylvania or U.S. firms to take their best shots for the deal.

But nobody ever thought to ask.