LOWER BASE Saipan — A $20-million graving dock with a capacity to build oceangoing barges up to 400-feet long and repair U.S. submarines will open at the Saipan seaport by April next year.

Anthony Pellegrino president of Saipan Sea Ventures Inc. partnered with a U.S.-based consultant and formed STA Oceangoing Ship Builders for the project.

He said the facility already has 18 orders for barges from shipping companies in the mainland that prefer to have the vessels built in Saipan because of lower labor cost and cheaper steel from Asian countries. “They should be able to have the barge built for about 30% to 40% cheaper. We are very competitive because of our location ” Pellegrino told the Journal.

The companies will shoulder the cost of bringing the new barges back to the U.S. He said that safety regulations imposed by the American Bureau of Shipping and the U.S. Coast Guard requires barges to be double-hulled. He said this has caused ship repair and building facilities in the U.S. to be overbooked and compelled shipping companies to look elsewhere for their needs.

Pellegrino also said his group has  obtained a commitment from U.S. Navy officials in Guam for regular repair and maintenance of military ships and submarines.

“We are still talking. They want to see if we can meet certain specifications. We’ve already gotten a promise that they will work with us ” Pellegrino said.

“The nice thing about a graving dock is that when a submarine is being repaired we can cover it and satellites from different countries cannot fly over and see it.  That’s the advantage we have ” he said. According to Pelligrino this cannot be done in a regular repair dock. A graving dock is a multi-purpose dock that can be used for building new vessels for repair and for maintenance.

The facility can be allowed to repair foreign ships because the Northern Mariana Islands is exempted from the Jones Act Pelligrino said.

The maritime statute governs U.S. ocean trade which requires that ships and cargoes moving between U.S. ports are U.S.-owned U.S.-built and U.S.-crewed.

“We have something that Guam doesn’t have. Foreign vessels can come here for ship repair should they run into problems and the next nearest repair facility is on Saipan ” Pellegrino said.

He identified his business partner as Skip Naftel who he said is a top marine surveyor from Ocean Marine Surveys LLC a company which has offices in Long Beach Calif. and Pensacola Fla.

“Naftel is the principal. He is very knowledgeable having been in the business for over 20 years. He is the one who knows how to do this ” Pellegrino said. He said financing for the project is expected to arrive in the latter part of August from a large investment company in the mainland. He declined to divulge the firm’s name. “I met with them around the second week of July in Los Angeles. They said they’re convinced they like the project and they know it is going to fly. We’ve given them the accounting sheets the cost of building expenses and profit. They liked it very much ” Pellegrino said. He said the facility will take approximately eight months to build. Once completed it will employ close to 100 employees around 60 of which are locals that will undergo training to become ABS-certified.

Welders will be paid between $12 and $15 an hour Pellegrino said. In the U.S. a person doing the same job is paid approximately $45 an hour.

Pellegrino said other employees would be paid an entry level of around $6 an hour with an option to increase as skills improve. The graving dock will have a depth of minus 22 feet and an overall area of 16 000 squar meters he said. It will be situated at the seaport’s North Seaplane Ramp.

The board of directors of the Commonwealth Ports Authority agreed in principle to grant STA Oceangoing Ship Builders’ request for a 40-year lease during a July 17 regular meeting.

Pellegrino said the company has been planning to build the facility since 1986.

“Actual physical work started last December. The timing is now. It’s perfect ” he said.

Pellegrino said the group is not worried about similar facilities in Asia because his company will be building barges for containers. “It’s a niche market a specialty market ” he said.  MBJ