A proposed California ship recycling venture to revamp nearly 17 acres of waterfront, including two massive historic dry docks, as a ship recycling, repair and building facility, has a "fatally flawed business plan," according to a competitive metal recycling company also interested in the former naval base shipyard, reports Vallejo Times Herald.
Jay Anast, business operations director for California Dry Dock Solutions, which is undertaking the project, disagreed with the criticism, saying the company would not be planning to sink millions of dollars into the site without good cause, reports the newspaper.
Venture critic Polly Parks of Southern Recycling, said in the article that its business plan seems to be premised upon MARAD (the U.S. Maritime Administration) paying them to recycle these ships, but that is not what MARAD does, it does competitive bidding with a small stipend.
California Dry Dock Solutions is hoping to be the sole West Coast recycler for the Suisun Bay "mothball" reserve fleet, which has more than 50 ships in need of disposal, according to government officials, reports the newspaper.
Parks, who represents her company's Washington, D.C., office, told the newspaper she thinks the only realistic way for a company to succeed financially is with "deep pockets" investors or with more than ship recycling involved, citing the bankruptcy of ship breaking company Pegasus in the 1990s that left abandoned ships for the city to cleanup, reports Vallejo Times Herald.
Parks also criticized Vallejo's consideration of California Dry Dock Solutions' project without allowing other companies to bid on the site, according to the article.
