Newport News-Times December 2, 2005
Adani Group, Bay Bridge Enterprise, and ship-breaking
By Joel Gallob
Bay Bridge Enterprises, the Virginia-based company that has proposed establishing a shipbreaking operation at McLean Point in the northeast corner of port property in Yaquina Bay, is part of a much larger organization, the Adani Group. That group, according to its website, is one of the first multinational corporations to come out of India.
Adani Group
Adani is involved not only in port operations and scrap steel, but in energy, grain, wheat and sugar, coke products, textiles, hydrocarbons and petrochemicals, among other industries. Its headquarters is in the city of Ahmedabad, in the Indian west coast province of Gujarat. Besides having branches around India, it has overseas offices in the United Arab Emirates, Singapore, Bangladesh, Mauritius, Indonesia and Vietnam.
The Group's vision statement (given on its website) clearly states the company's goal of being an international player. That mission is: "To be a globally competitive, India-focused, multinational corporation with leadership in trading, private infrastructure and selected niche technologies and be committed to the delight of our customers and shareholders." The group's chairman, Guatam Adani, describes his "corporate ideology" as arising from his own "calculated adventurism," and "daredevil sense of enterprise."
The acquisition of Bay Bridge Enterprises was not Adani Group's first foray into port-related business. When Gujarat State became the first Indian state to involve the private sector in port development, Adani Group jumped in to the development of the Mundra port, one of India's first private sector ports.
The Adani Group is, in structure, a conglomerate. The Group itself includes multiple businesses, one of which is Adani Exports, Ltd. based in Mauritius, a small, tropical island off the east coast of Africa. Adani Exports owns Adani Global. That holds three companies, one of which was incorporated in 2005 as Adani Virginia, Inc., the holding company for its Bay Bridge acquisition and future United States operations. In May, 2005, Adani Virginia acquired a 100 percent ownership interest in Bay Bridge Enterprise and its Virginia shipyard.
The location of Adani Exports, as the holding company for Bay Bridge, worried Yaquina Heights homeowners spokesman Mike Becker when he spoke at the Port of Newport meeting last week. Becker said the siting of a corporate headquarters on an offshore island is often designed to avoid legal liabilities, and could insulate it from paying for possible future environmental damages in Yaquina Bay.
The East Coast shipyard
The Bay Bridge facility in Virginia is made up of one main 1,200-foot long boat slip, and a drag-up slip with a backup area. It can demolish three to five vessels at the same time, depending on their size, according to a web article on "Bay Bridge, LLC" at global security.org.
The shipyard is located on the Elizabeth River - a heavily industrialized tributary to the Chesapeake River - and has a history of its own.
According to an online article from Recycling Today, it began with the founding of Jacobson Metal Co., in 1955, which grew to see annual revenues of $30 million by 2001. Jacobson Metal was purchased by Recycling Industries in August 2001. But that didn't last. Ten days later, Recycling Today reported that Mercer Wrecking and Recycling, based in Trenton, New Jersey, was acquiring Recycling Industries, a "defunct recycling industries scrap company," for $3.3 million. The owner of Mercer, Mario Mazza, renamed the facility Bay Bridge Enterprises.
In April, 2004, Sims Group Ltd., based in North Sydney, Australia, purchased Bay Bridge. Sims, at that point, had annual sales of somewhat above $1 billion. Mike Dunavant, now the principal for Bay Bridge, came in along with Sims.
In March, 1998, Dunavant (who was then working with Sims Metal America) was one of the shipbuilding industry leaders who testified before the Committee on Transportation and Infrastructure of the U.S. House of Representatives.
Ship breaking history
Dunavant told the congressional committee that "just recently we dismantled three former United States Navy vessels on the James River without dry dock. All three were scrapped in the state of Virginia and completed." Though he stated they had lost money on the project, Sims Metal, he also said, "is very interested in doing shipbreaking again."
After years of negotiation, in 1999, the Maritime Administration (MARAD) transferred a retired Navy vessel, the Spiegel Grove, to the state of Florida to be scuttled and used as an artificial reef. In January 2002, the Key Largo Chamber of Commerce signed a contract to clean the vessel with Bay Bridge. Company employees spent 28,000 hours cleaning and preparing it to be sunk. "They removed approximately 400,000 linear feet of cable and flushed 110 fuel tanks," the global security web article reports, "so the half dozen government agencies inspecting the vessel would give it environmental approval for sinking. The Bay Bridge staffers also removed electronic equipment, vent gaskets and any other items that, like the wires, installation and duct work, could possibly contain PCBs (polychlorinated biphenyls)."
After the ship was stripped, the website reports, the public opening of the new artificial reef was delayed "by a mysterious fuel sheen." The ship was dedicated as artificial reef on June 26, 2002.
In 2003, Bay Bridge won a $2,763,082 contract from MARAD for the demolition of five ships from the James River Reserve Fleet (known as the Ghost Fleet). Congress had set a deadline of 2006 to dispose of more than 70 old vessels stored in the middle of the James River, near the town of Newport News.
Michael Thompson, president of the Thomas Jefferson Institute for Public Policy, which advises the Virginia government, wrote a June 2003 article on the website "bacon's rebellion" about Bay Bridge. The firm, he wrote, hoped to use Virginia prison inmates to do much of the shipbreaking work. The company would train, house, feed and pay them. The combined benefits, he wrote, "will be close to minimum wage." And, he wrote, "While the inmates dismantle the Ghost Fleet, the state will be relieved of the cost of incarcerated in them."
Each of the ships was more than 500 feet long, and like the other ships Bay Bridge has broken, their parts and materials were to be recycled, burned, or put in landfills. MARAD would pay for this effort with money Congress had appropriated to keep a cleanup effort in the Chesapeake River, including the shipbreaking and recycling, going.
But a British salvage yard had also bid on the job, prompting a challenge by environmentalists in British and American courts. The environmental groups argued the international shipment of the vessels would violate national and international environmental laws.
"They don't want our hazardous waste in their country," Dunavant said about the British opposition. "And you know, it's a fair argument. How do you think Americans would react, if the British wanted to bury their PCBs, their asbestos, in our soil?"
Dunavant, however, says the West Coast Ghost Fleet currently mothballed in the San Francisco Bay area is different from the old East Coast Ghost Fleet, and does not have PCBs to worry about.
The state of Virginia initially wanted Bay Bridge to apply for an individual environmental permit for the shipbreaking. That could have taken months, but the state felt the yard had almost no experience with shipbreaking, according to an article by Scott Harper, "Local Salvage Yard Takes on the Ghost Fleet," in the Virginian Pilot newspaper. State officials changed their mind after Bay Bridge hired Clean Venture, a New Jersey-based environmental company and promised "zero discharges" into the Elizabeth River.
In December, 2004, MARAD contracted with Bay Bridge to dispose of a vessel called the Shirley Lykes, a 42-year-old converted container ship that had helped evacuate Americans from Cuba after the Cuban missile crisis. According to an article in Recycling Today, that vessel was going to be "the sixth Ghost Fleet ship scrapped by Bay Bridge Enterprises."
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