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This article appeared in the
Tribune Review on September 1, 1998

Senator wants probe of tax-supported shipyard project

By Dennis Barbagello
TRIBUNE-REVIEW STATE CAPITOL REPORTER

HARRISBURG - Pennsylvania's auditor general will be asked today to investigate the use of public money to purchase a $28 million gantry crane to be made in Portugal for the Kvaerner shipyard project in Philadelphia.

The commonwealth has invested more than $180 million in the $425 million deal to help Kvaerner, a Swedish shipbuilder, convert the former Philadelphia Navy Yard into a commercial operation.

Kvaerner, however, has ordered the crane from Portugal, claiming that no U.S. company can manufacture a rig to lift 600 tons.

"I simply do not buy the suggestion that there was not one company in Pennsylvania, or in all of America, with the ability to competitively produce the gantry, other smaller cranes, or other such materials, equipment and products Kvaerner says it needs to make the Philadelphia project a success," said Senate Democratic Whip Leonard Bodack of Pittsburgh's Lawrenceville area. His comments are in a letter slated for hand delivery today to Auditor General Robert Casey Jr.

"Moreover, I am deeply concerned that either the letter, or spirit, of Pennsylvania's 1978 Steel Products Act - requiring the use of domestic steel and steel products in public projects in Pennsylvania - may have been violated.

In his letter to the auditor general, Bodack noted that Kvaerner is leasing the Philadelphia facility from a special non-profit Philadelphia Development Corporation that administers federal, state and local tax dollars invested in the shipyard project.

"Specifically, I would like to know ... whether the use of this corporation as a conduit for the expenditures of taxpayer dollars subverts the Steel Products Procurement Act or any other law of this commonwealth," Bodack wrote.

Bodack cited page 31 of the master agreement between Kvaerner and the commonwealth that requires the Swedish shipbuilder to publicly disclose its materials and equipment supplier network.

Noting the promises of administration officials and legislative leaders that the Kvaerner deal would boost domestic manufacturing, Bodack wrote: "Unfortunately, from what we've seen so far, the grand promise of Kvaerner is shaping up as yet another broken promise for our people."

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

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www.triblive.com


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