Homeland Security

I want to thank Chairman McCain and Senator Hollings for calling this hearing and continuing to shed light on the issues of port security. I also would like to thank Senator John Breaux for his tireless support of the Port of New Orleans and the maritime industry throughout the United States. We will deeply miss Senator Breaux's advice and counsel when he leaves the Senate at the end of this year.

Since reporting to the committee two years ago, the Port of New Orleans, along with many other U.S. ports, has made significant port security enhancements. The Port has accomplished all previously enumerated goals and objectives that could be undertaken administratively by its staff. The following security enhancement and/or regulatory compliance requirements have been completed:

. Increased Security to Heightened MARSEC /National Alert Levels . Federal Grant Application Initiatives . Federal Grant Project Award Management . Port Vulnerability Assessment . Harbor Police Department Anti-Terrorism WMD Manual . Increased Cruise Terminal and Waterside Security . U.S. Coast Guard Area Maritime Security Executive Committee Membership . Region One Urban Area Security Initiative Membership . F.B.I. Joint Anti-Terrorism Task Force Membership . Immigration and Customs Enforcement (ICE) "Operation Check Down" Initiatives . MTSA Facility Security Plan . Metal Detection Equipment Enhancements The Port has completed or is in the process of completing necessary infrastructure enhancements with funding assistance made available by the Federal government. The Port has dutifully absorbed all personnel, operations and maintenance costs related to security improvements, including overtime for heightened level alert periods. The impact of increased security costs on port authorities is significant and must be addressed. It is the primary reason that Federal funding assistance must not only be continued, but increased to meet the level of funding needed to address security concerns demonstrated by the Port Vulnerability Assessments completed by ports throughout the United States and submitted to the U.S. Coast Guard. These assessments document U.S. ports' numerous areas of weakness and, consequently, their susceptibility to criminal and terrorist activities. The preparation, distribution and review of these assessments, albeit as protected SSI (Security Sensitive Information) documents, may actually result in increased port vulnerability, if the steps required to mitigate identified weaknesses are not taken within a "reasonable" period of time. Therefore, Congress and the Bush Administration should act immediately to provide funding at levels sufficient to enable port authorities to meet the increased financial burden associated with increased security costs as well as the mandates of the Maritime Transportation Security Administration which become applicable on July 1, 2004.

As stated, during the past two years, the Port of New Orleans has accomplished many of the goals listed in its previous report. To date, the Port has applied for more than $33 million in federal grant funding. The following awards have been received

. TSA I Upriver Gate Access $3.5 million Project ongoing . TSA I Cruise Terminal Fencing $184,450 Project completed . TSA II Cruise Terminal Lighting/ Monitoring $600,000 Project ongoing . TSA II Signs, barricades, barriers $50,000 Project ongoing . TSA II Metal detectors $15,000 Project completed . DHS Upriver Perimeter Enhance- ments $3.4 million Project ongoing . DOJ/Tech. Video Teleconferencing $52,000 Project completed . DOJ/COPS Hiring Grant $212,351 3 Officers over 3 years . DOJ/COPS Overtime Grant $37,500 Req. -0- Award . TSA III 8 Projects $5.5 mil. Req. -0- Award The Port of New Orleans anticipates contributing matching funding for these projects totaling approximately $1.2 million. ( This is in addition to an annual Safety and Security Division operating budget of $ 5.5 million and a capital equipment budget of $275,000.) The Port intends to apply for additional funding through the Round III Federal grant initiative. However, the President's proposed Fiscal Year 2005 budget of $46 million for port grant funding is not sufficient to meet port security funding requirements. It is worth noting, that this figure represents a significant reduction in available grant funding because infrastructure improvements or new construction projects, which were included in previous rounds, are now listed as "ineligible" in the Round III guidelines. Nearly $5.4 million in security enhancements were not funded in the Port's previous grant application. This amount alone comprises eight percent of the President's proposed budget. None of the grant projects included in Round III attempts to address the prohibitive costs of providing infrastructure improvements and associated equipment, maintenance and staffing costs (as opposed to installation or replacement enhancements) which result directly from elevated security requirements.

The American Association of Port Authorities estimates that $400 million in funding is called for in FY '05. The latest U. S. Coast Guard forecast estimates the cost for total MTSA compliance to be $1.125 billion for the first year and $5.4 billion over the next 10 years.

Numerous administrative or procedural MTSA mandates must also be addressed and clarified. The most glaring example is the TWIC (Transportation Worker Identification Card) concept for ports. Information concerning the status of the TWIC initiative is all too often illusive, sketchy and most of all inconsistent. The Port of New Orleans, like many ports, has deferred initiating a card access project because the "start-up"(staffing for processing, distribution, enforcement and administration); equipment; and software costs are extremely high and this is without the assistance of a paid consultant. A recent article in the Winter, 2004, Port Illustrated discusses the TWIC pilot program in Wilmington, Delaware. The pilot program began in July, 2003, and is scheduled to run for 15 months, extending beyond the July, 2004, MTSA compliance deadline, and leaving ports without firm guidelines. To date, no directives or guidelines which address the need or requirement for a biometric component of TWIC have been issued. As a result, ports will be forced to purchase more expensive card access systems which will be able to accommodate features which, ultimately, may not even be required. The Port of New Orleans will submit a grant application for all eligible unfunded security initiatives, ranging from training and exercises to communication system upgrades and patrol vessels used to supplement Coast Guard patrols and response. The price tag for these initiatives is currently being estimated at approximately $50 million dollars.

Port executives remain committed to securing additional funding for security initiatives from both self-generated revenues and Federal funding sources. Now, more than ever, port executives truly understand that the safety and security of our nation's waterways will forever be a paramount component of port operations.

The vessel collision that occurred at the mouth of the Mississippi River on February 21 of this year provides a poignant example of the potential economic havoc that could be visited upon this nation by a terrorist act. In this unfortunate incident, the sinking of a relatively small vessel in the busy Southwest Pass resulted in a four-day closure of the main international shipping channel into the Mississippi River and the delay of 158 ocean-going vessels. The closure was absolutely necessary to conduct search and rescue and recovery operations followed by removal of the vessel. Our thoughts go out the families of the five seamen who lost their lives.

After removal of the sunken vessel, the backlog of ship traffic was cleared and shipping returned to normal within three and a half days. Estimates are that this incident caused approximately $17 million in direct losses and $68 million in overall negative economic impacts. Not only were ships delayed ,but three container cargo ships and three cruise vessels had to be diverted to other ports. Thousands of passengers were bussed to other Gulf Coast ports which were ill-equipped to handle them on such short notice. The cruise lines incurred thousands of dollars in ground transportation costs and reimbursements to passengers for the loss of their vacations.

With more than 5,000 ocean-going vessel calls on the Mississippi River annually, the importance of this waterway system to the nation's economy is readily apparent. The nation's economy would experience severe consequences from a prolonged closure of the Mississippi River to deep draft navigation. In 2002, the ports of the Lower Mississippi River from the Gulf of Mexico to Baton Rouge handled 227 million tons of foreign waterborne commerce valued at nearly $40 billion and representing 18.1% of the nation's international waterborne commerce. American producers exported 27 percent of total U.S. exports out of lower Mississippi River ports.

Included in this total are agricultural products from 17 midwestern states exported from the 10 grain elevators located on the lower Mississippi River, making up more than 62% of total U.S. Grain Exports. More than 92 million tons of petroleum and petroleum products are imported to Louisiana facilities on the Mississippi River system, comprising nearly 16% of all U.S. waterborne imports of petroleum and related products. This collision and its consequences clearly demonstrates the need for the timely completion of all elements of the of the Vessel Traffic Service (VTS) on the lower Mississippi River to facilitate safe and secure vessel operations. Ports and industries along the lower Mississippi are poised to reap the considerable benefits of the new state-of-the-art VTS being implemented by the U. S. Coast Guard. All facets of the maritime community have been involved in this unprecedented multi-year cooperative venture with the Coast Guard. The system, for the most part, is up and running on a test basis out of the Coast Guard's Vessel Traffic Center on the river front in New Orleans. Two more radar sites must be installed and the system must be subjected to formal testing procedures, involving both the computer simulation and real world tests with a large number of vessels on the waterway equipped with VTS transponders.

VTS New Orleans will enhance both safety and security of the largest port complex in the world. The Coast Guard will be able to identify and track the movements of all ocean-going vessels and most other commercial vessels moving on the lower Mississippi. Tracking will begin prior to a ship's entrance to the river and will extend up river beyond the limit of deep draft navigation at Baton Rouge. Mariners will be given a powerful new tool to assist safe navigation in the busiest waterway in the nation. Existing radar only provides a very limited view of the river and is particularly hampered by the river's twists and turns. Mariners depend on extensive use of radio communication with other vessels to determine navigation conditions, but radio communication, as seen in the recent vessel collision, is not always reliable. VTS will provide a detailed, real-time picture of vessel movements on the waterway, including vessel identification, as well as provide a method for communicating waterway conditions and special alerts to all mariners. VTS will not be blinded by bends in the river or by fog or darkness.

We have to thank the Coast Guard for its perseverance in bringing VTS to our ports and waterways, and Louisiana Senator John Breaux for his tireless championing of VTS, especially for his insistence on expediting VTS carriage requirements for vessels. A final notable attribute of VTS is that as currently programed it comes at no cost to the Port. The Port's emergency response vessel, which assists the U. S. Guard and responds to every level of waterway emergency and service, is scheduled to be have the system installed at no cost to the Board.

In conclusion, now is not the time for Congress to lose its zeal in the war against terrorism on the domestic front. Extending the deadline for compliance with security measures without providing necessary additional funding is not the answer. The nation's ports, like its airports, simply cannot by themselves bear the financial burden of added security costs, especially during these volatile economic times. From the beginning of this regulatory process, port executives have pleaded that no security mandates be issued without the proper funding. The mandates are here. Please ensure that adequate funding is too.