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This article appeared in the Tribune-Review September 13, 1998

Navy Yard project may be a sinking ship for taxpayers

By Dennis Barbagello
STATE CAPITOL REPORTER

HARRISBURG - Pennsylvanians may, literally, be pouring hundreds of millions of their hard-earned state, federal and local tax dollars into a proverbial sinking ship when it comes to the much-touted Philadelphia Navy Yard conversion project.

It appears to be a ploy designed only for the short-term benefit of a few politicians, Republicans and Democrats alike. And there are no indications the much-promised economic benefits will ever accrue to western Pennsylvania or the rest of the commonwealth.

In fact the only obvious beneficiaries seem to be incumbent Republican Gov. Tom Ridge, who is seeking re-election this year, and Philadelphia Mayor Ed Rendell, a Democrat, who is a probable U.S. Senate candidate in two years, or even a gubernatorial hopeful in the year 2002.

Thus, a politically motivated call of two weeks ago for State Auditor General Robert Casey Jr. to investigate the deal appears to be in order.

At issue is the use of $430 million in public funds to convert the old Philadelphia Navy Yard into a commercial shipbuilding operation. The commonwealth's contribution is about $182 million, with the rest coming from the federal government and local public funds from Metropolitan Philadelphia.

The deal calls for Norwegian shipbuilder, Kvaerner ASA, to operate the facility under a master agreement and employ thousands in the Philadelphia area, or so it seems.

To cement the deal, and win state legislative approval of appropriation of state funds, politicians of both parties last fall promised the creation of thousands of new jobs and the revival of western Pennsylvania's steel industry. In an impassioned state House of Representatives speech, Majority Leader John Perzel, a Philadelphia Republican, said the arrangement would "breathe new life into the steel mills in Pennsylvania."

But more than 11 months after the fact Pennsylvanians should be demanding to know what that investment has brought to the commonwealth. For example:

  • What closed or abandoned steel mill has been reopened because of the nearly half billion dollar shipyard deal?
  • Have any de-activated coal mines been placed in operation to supply that newly revived steel industry?
  • How many miles of abandoned railroad track have been re-activated to handle all the Pennsylvania-produced materials for the shipyard.

The answer to each and all of the above is: NONE!!

To foster further distrust, Kvaerner has ordered a gantry crane for that facility to be built in Portugal. Yet, several U.S. firms claimed they could have built that $28 million piece of equipment, but were never asked.

Moreover, structural steel for the shipyard is being imported.

Why not reopen an old Mon Valley or Steel Valley mill to produce that same material? That was the implied promise, after all, for Pennsylvanians putting up their tax money for the arrangement. But neither Ridge, Rendell or any other politician involved in this deal have offered an explanation of the need for importing that steel.

The Sept. 3 edition of the Philadelphia Inquirer carried a story about Kvaerner's financial problems. It seems the company has experienced a 94 percent profit decline in one quarter. "They (Kvaerner) look very disappointing," said Norwegian market analyst Olof Jonasson in that story. He cited several factors, but added, "the shipbuilding results are not very good."

And so, the question recurs: Have state, federal and local tax dollars been used to subsidize an ailing foreign company and boost the short-term political fortunes of Philadelphia Mayor Ed Rendell and the guv?

It certainly looks that way.

And every miner, mill worker, foundry man, crane maker, railroader and barge man should be asking: What happened to that promised breath of new industrial life that politicians promised to a region that gets remembered only for political convenience?

Thus, Casey, the son of the former guv, should exercise his authority as state auditor general and investigate this deal.

Casey junior has political ambitions. He is touted as a potential gubernatorial contender in four years. So, maybe he should jump on the Kvaerner political bandwagon, and at least neutralize Rendell as a possible primary election opponent.

That may be the only way Pennsylvanians get any real answers to the above questions about the already conveniently forgotten political promise of a breath of new industrial life.

©Copyright 1998 Tribune-Review Publishing Co. All rights reserved.

Our thanks to the Tribune-Review for their permission to post this article
www.triblive.com


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