DOD Looks To Lock In Funding

March 7th, 2008  
Team Infidel

Topic: DOD Looks To Lock In Funding

Pacific Daily News (Guam)
March 7, 2008 By Gaynor Dumat-ol Daleno, Pacific Daily News
Assistant Secretary of the Navy B.J. Penn said yesterday he will work to secure a U.S. funding commitment for the military buildup on Guam before the White House changes guard in less than a year.
"My goal is to lock it in, so that with the election coming, no matter what happens, we're set," said Penn, talking at a press conference at the Guam Industry Forum II. "The plan is in place and we'll have the 2010 budget in so we will have the requirements for funding and we can go forward."
He was joined by retired Marine Maj. Gen. David Bice, executive director of the Joint Guam Program Office, which oversees buildup readiness efforts, Marine Brig. Gen. Rex McMillian, deputy commander of the U.S. Marines' Pacific Forces, and Gov. Felix Camacho and other dignitaries. The biggest component of the U.S. military's buildup "pre-decisional" plans on Guam has a price tag of $10.27 billion and involves the relocation of 8,000 Marines and 9,000 of their family members from Okinawa.
Overall, the military buildup on Guam will cost almost $15 billion. Of the price tag to relocate Marines to Okinawa, $6 billion will come from Japan, under a U.S.-Japan agreement announced in 2006.
That leaves Penn $4 billion to secure funding, at least for the Marine relocation.
He said the U.S. funding is expected to be spread out over five years, from 2010 to 2014.
As the Defense Department works to meet buildup time lines and firm up funding commitments, more than 1,300 representatives of businesses from the U.S. and more than a dozen other countries have converged on Guam for the forum. It opened yesterday and continues through tomorrow.
The forum is being held in three venues to accommodate the high turnout. Live video links the Sheraton Guam Laguna Resort, the Hilton Guam Resort & Spa and the Hyatt Regency Guam.
Forum participant Yasudyuki Inoue, overseas division manager for Kinden Corp., said the military buildup-related construction would surpass the enormity of construction projects during Guam's hotel construction boom more than two decades ago.
The Japanese company has been involved in the Guam construction industry for 24 years, he said. The company's goal is to capture about $100 million in contracts. That could create about 700 jobs on island, said the company's Guam general manager, Tomeyoshi Tachihara.
Power plant
Japan's $6 billion share of the Marines' relocation will consist of $2.8 billion in cash and "$3.29 billion in equity investments and loans to special purpose entities that will provide housing and utilities for the Marines," according to Penn, in a report to the House Armed Services Committee last year.
A special purpose entity, or SPE, is a public-private partnership, in this case funded by the government of Japan, Bice said.
One of the options is for an SPE to build a power plant -- either on the military side of the fence or outside -- to provide electricity to the Marines in Guam, Bice said.
But that doesn't necessarily mean Guam Power Authority will be out of the picture, he said. An SPE could be comprised of an independent power provider that provides power to the Marines either directly or through GPA, Bice said.
Simon Sanchez, chairman of the Consolidated Commission on Utilities, which functions as GPA's board, said studies have shown it's more cost-effective for the military to buy power from GPA.
The forum continues today with discussions on topics such as the accommodations for about 15,000 workers who will be brought in to Guam for the buildup.
In addition to the off-island workers, the local government expects the island population to increase by 25 percent to 30 percent because of additional military personnel and their families, and civilians who will be drawn to the island because of economic opportunities from the buildup, said Tony Lamorena, head of a task force the governor created to prepare for the buildup.
The governor said his administration will need almost $3 billion for civilian infrastructure and social and public safety services because of the anticipated population boost. Camacho said federal agencies are helping the local government seek federal funding support, but he also mentioned "blended funding," including from private-sector partners.
Ideas sought
The hosts of the forum are hoping not just to share information, but to find some new ideas and insights as well.
"The forum is designed to find ways to ... get ideas from industry," Bice said.

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