Shipyard Authority pours all available funds into upgrading facilities
Shipyard Service Authority is looking at an aggressive marketing campaign to attract longliner fishing vessels back to American Samoa while seeking more than $4 million to build a second, but smaller, slipway to service those longliners, which were years ago the backbone of the local fishing industry.
This information was revealed Tuesday by the authority’s board chairman David Robinson during the Fono joint budget hearing for the shipyard’s fiscal year 2014 budget of close to $2.1 million.
Robinson was accompanied to the hearing by shipyard official Galumalemana Bill Satele, who addressed the joint hearing in Samoan saying that most of the shipyard’s business is with purse seiners, which provides more revenues, but the shipyard is targeting longliners as they have gone to other Pacific countries.
He said the purse seiner up on the slipway some four weeks ago collected more than $200,000 in revenue for the shipyard.
Rep. Larry Sanitoa said that, based on the latest information received by the Fono, the shipyard has received only $1.7 million in revenue as of Aug. 31, 2013 and he wondered if this was sufficient to cover expenses for the rest of the fiscal year which ends Sept. 30, 2013.
Robinson replied “yes”, and explained that one of the issues that the shipyard has been facing with revenues — which is why they were down a little bit at the end of last month — is “the fact that we’re having to deal with equipment which is 30 years old and keeps breaking down.”
And when equipment breaks down, the shipyard is down for two weeks or more so that repairs are carried out, and spare parts are flown in from off-island, he said, adding that the main platform, or slipway, is 30 years old and “we have to keep fixing that up.”
“…we have lost during the course of this fiscal year, probably four or five weeks of production due to equipment failures... that’s why our revenue is down,” he said, noting that during the down time for repair the shipyard can’t avoid other obligations such as wages and utilities. “I think we will catch up,” he added.
Robinson went on to explain to lawmakers — for their complete understanding — that over the past 30 years, there has been very little maintenance and up-keep by the previous tenants of the shipyard.
Therefore, the shipyard had to engage in quite an upgrade, such as installing a new hauling chain (which cost $200,000), and it's going to be fitted in next month. Additionally, the shipyard purchased a hauling motor for the slipway which cost $74,000.
He also said that a lot of work has been carried out for the slipway by strengthening the steel beams, re-enforcing welding, putting in new flooring and so forth. “We've carried out a lot of work so far over the past 12 months and we’ve done all of this with the revenues generated at the shipyard,” he said. “So whatever money we make we like to put it back to capital improvements, and that’s what we’ve done.”
He said the shipyard has requested to the governor’s office that they be able to use some Capital Improvement Project funds (about $4.8 million) to build a second, but smaller 500 ton slipway. He said there used to be a smaller one — 800 tons — years ago, but that has deteriorated over the years due to the lack of maintenance by previous operators of the shipyard.
“At the present time, once we pull up a purse seiner, it takes up the entire 3000 ton platform [slipway] and we cannot pull up any of the smaller longliners. There are more longliners …than purse seiners,” he noted.
“So we need to pay attention to the needs of the longline fleet and try to encourage them to come back here.”
“We do need some [financial] assistance” for capital improvement as the shipyard is “not generating enough money to be able to afford to do that ourselves,” he said and went on to address the issue of the longliner fleet, which he says was the was the backbone of the fishing industry in the territory some years ago.
He says only a small number of them are here while the rest have gone to Fiji, the Cook Islands, and other ports in the Pacific because of operating costs, the price of fish, and of some of the rules and regulations they have to follow here with the U.S. Coast Guard and the Port Administration.
“A lot of them have gone away. So we need to have a pretty strong and aggressive marketing strategy to get these people to come back here,” he said. “And now we’re on the improvement with our facility, with our workmen-ship, I’m sure that these people will start to come back again, and we’ll see the long linger fleet start to increase in numbers again.”
He also says that with the establishment of Tri Marine International in the territory, the company now has “nine purse seiners at our disposable to work on” while another five are being built in Europe to be stationed here as well.
“Purse seiners are the backbone of our business,” he said and noted that one purse seiner on the slipway for two or up to three weeks of complete repairs to be done, could mean $250,000 to $260,000 in revenue for the shipyard.
“So it’s very important that we look after those purse seiners, particularly with Tri Marine” investing a lot of money in the territory, “but it’s also important that we look after the longliners as well,” he said.
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