WASHINGTON --- American Association of Port Authorities President Kurt Nagle said that recent criticism by the Department of Homeland Security outgoing inspector general of the way DHS administers its port security grant program “misses the mark,” pointing out the biggest challenge the maritime transportation sector faces is the serious shortfall of money needed to help ports to pay for federally-mandated security improvements. 

Nagle Monday noted that protecting seaports from terrorist attack is both “a top priority and a shared responsibility” between Washington, local public ports, and the private sector.

However, Nagle added, “The federal government has mandated security enhancements for marine facilities, but has yet to adequately fund those mandates, creating huge financial burdens on ports that have both security and economic consequences.”

Nagle said that American seaports are already spending more than $3 billion a year on capital improvements in order to keep up with the demands placed on them by the huge growth in international commerce, and domestic participation in it.

If the ports do not receive adequate federal help on massive new security spending requirements, Nagle said in a press statement, the impact on spending infrastructure improvements and operating expenses could seriously impact the U.S. economy.

The port industry and its users account for some 27 percent of the country’s GDP, experts say.

The AAPA, in which Nagle also serves as CEO, represents 150 of the leading public port authorities in the United States, Canada, Latin America and the Caribbean, as well as 300 sustaining and associate members, firms and individuals with an interest in the seaports of the Western Hemisphere.

Nagle made his comments in the wake of last week’s widely-aired criticism of the DHS port security grant program that was contained in a report by the department’s inspector general, Clark Kent Ervin, whose last day in office coincided with the release of the document that panned what the IG called the poor coordination between the grant program and the DHS Information Analysis and Infrastructure Protection directorate. 

The problem, Ervin claimed, had “resulted in funding of projects with low scores in the review process.” He also criticized procedures followed in DHS’ post-award grant administration, charging that the department did “not have a strong grant evaluation process in place by which to address post-award administration issues, including measuring progress in accomplishing DHS grant objectives.” 

The DHS/IG’s report, a final version of which is expected to be made public this month, was first reported by Port Security News on Dec. 20. (See ”DHS Inspector General says port security grant program lacks coordination, criteria.”) A week later, the story was picked up by the Associated Press, the Washington Post, CNN and other national media.

In response, Nagle pointed out that port security grant money is used as a reimbursement vehicle for marine facilities that have already spent money on an approved project. As a result, he added, although some post-award projects may not be audited by DHS evaluation specialists, the grants only cover authorized expenses, not personnel, maintenance or operating costs.

AAPA members say that the financial burden represented by the new security mandates is daunting for an industry whose membership itself is highly competitive and whose resources are thinly stretched in order to anticipate even greater growth in U.S. and global maritime trade. According to the association, the port industry and port users each year generate some 16 million jobs and account for $2 trillion in international trade.

Nagle noted that while the AAPA pressed for federal funding of $400 million in fiscal 2005, based on estimates by the U.S. Coast Guard that it will cost the seaports $5.4 billion in the next decade to address homeland security issues, only $150 million was appropriated. In the last round of port security grants, he added, ports received only about eight percent of what they had asked for.

“We hope the president’s soon-to-be-released Fiscal Year 2006 proposed budget will provide more funding to protect our vital marine facilities,” Nagle said. “Because America’s ports are our gateways to the world and a critical component in our nation’s economic health and national defense, they need to be properly defended.” Nagle said. “Paying for their security must be shared equitably.

“While ports are making progress in getting increased assistance for their security investments, vital port needs are still being overlooked and under funded,” he added

Meanwhile, Deirdre McGowan, executive director of Inland Rivers, Ports and Terminals, Inc., told Port Security News that the “rigid” port security grant award system “precludes any creative solutions with wide-ranging applicability and replicability throughout our port system.”

As currently administered, McGowan added, the grant program has been “restricted to hardware” acquisitions..

In a Jan. 3, letter to Port Security News, the IRPT’s McGowan charged that “as long as the port security program requires applicants to have completed a security vulnerability assessment as required by (the Maritime Transportation Security Act of 2002), no proof-of-concept grant can even be considered.”

She added that the IRPT was able to apply a “proof-of-concept grant” to 59 ports and terminals identified by the Coast Guard “as handling cargoes of concern, and was able to do so because a small portion of Round 1 (port security) grant monies was set aside to develop universal rather than port-specific solutions.”

“Our country is coping with security demands we were initially not prepared to meet and we are all trying to do our best with limited resources,” McGowan wrote, adding that “there are still many problems that require solutions.”

”However, it has been our experience that without a provision for proof-of-concept grants in the Port Security Grant Program, funding will be restricted to hardware,” she added.

”We need to be looking at testing ideas and solutions that all ports can modify and apply to enhance their own security positions because we know that fences and cameras will deteriorate – ideas will not.”

Martin Edwin Andersen can be reached at Mick_Andersen@portsecuritynews.com.

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