PLAN SETS COMPASS FOR PORT'S FUTURE

PLAN SETS COMPASS FOR PORT'S FUTURE

Although oil imports remain the backbone of business at the Port of Houston, enhanced intermodal capabilities, trade with Mexico and Puerto Rico and real estate marketing rank as the most promising areas for growth.

That's the gospel according to the port's Master Plan prepared by the consulting firm of Booz-Allen & Hamilton with Nathelyne A. Kennedy & Associates and Patricia D. Knudson & Associates. The document represents a request by the port for recommendations on the direction for its future."What the finished plan reveals is that we are on the right track in many respects," said George Williamson, managing director for the Port of Houston Authority. "But there are also a few areas that present additional opportunities and we need to explore those further."

Consultants preparing the Master Plan queried steamship lines that offer containerized service to Houston and five other ports operating large container terminals on other coasts. Looking ahead to projections for growth of Latin and Caribbean trade, they concluded that Houston is well-positioned to boost containerized all-water service to Puerto Rico while capitalizing on increased trade overall with Mexico.

But their study indicates that the port authority must continue to develop and expand its intermodal facilities if it wants to see major growth in container volume during the next five years.

It predicted that Houston should benefit as Mexico turns more toward water transport to eliminate border congestion on overland trade routes. Meanwhile, the study noted that Puerto Rico represents the nation's largest single containerized cargo market in Latin America. Houston already handles the majority of containers moving through Puerto Rico and the study encourages the port to enhance its marketing efforts toward that island nation.

The study also noted the port's ownership of more than 2,700 acres of property suited for commercial development. And it suggested several ways to maximize use of that land, including dockhigh, rail-served warehousing for storage of plastic pellets, storage for tankcars and resin pellet railcars, and a bulk-to-bulk transfer facility.

Altogether, the Master Plan recommends expansions and improvements that would cost $264 million through the year 2000, with most of it - $210 million - available from traditional revenue sources. It suggests additional funds could come from increased leasing activity and federal grants.

Indeed, the Port of Houston has many things going its way these days. Besides bright statistics, Executive Director Tom Kornegay said, the port also appears to have "turned the corner" toward really getting to work on its long-awaited $500 million plan to widen and enlarge the Houston Ship Channel. And, all the while, it continues to improve its infrastructure, particularly container movements.

Last year, the port handled an estimated 142 million tons of cargo, compared with 141 million tons in 1993, according to Port Chairman Ned Holmes. Those figures include tonnage estimates from Houston's multitude of private and public facilities.

For the first half of 1995, the port has seen a tonnage increase of 5 percent, notching 47.3 million tons for its public terminals and the private terminals reporting so far.

Houston port leaders remain most excited about increases at their Barbours

Cut container terminal, where traffic jumped 7 percent in 1994 and already shows a healthy 22 percent boost for the first six months of this year.

And this comes at a time when the port is completing construction of its sixth and last berth at that terminal - a $35 million investment. According to Mr. Holmes, the port has a $250 million container facility there now.

"Right now," he said, "Barbours Cut operates very close to capacity. It has been growing consistently over the years. Barbours Cut has become the load center of the Gulf of Mexico in terms of containers. The terminal now handles about 50 percent of the total market share of containers in the Gulf."

Mr. Holmes predicts capacity will peak there by 2003, so the port will still have to develop additional container handling facilities to accommodate projected growth of business.

Bolstered by its prominence as an oil import center, Houston continued to outrank all other U.S. ports for volume of foreign waterborne trade in 1994, holding the top spot for the fourth consecutive year. Overall, the port handled 79.5 million tons of foreign cargo valued at $28 billion in 1994, according to figures from the U.S. Department of Commerce.

Imports accounted for 55 million tons, while export tonnage totaled 24.5 million. Venezuela pushed Saudi Arabia out of the top trading partner spot, demonstrating the importance of imported oil to the port's statistics.

"Saudi Arabia's decline and Venezuela's rise in the rankings were probably due to the fact that Venezuelan petroleum is priced lower than Saudi oil," said Tom Heidt, market research manager for the port. "Saudi Arabia's shipments have slipped steadily in recent years, dropping by about 1.5 million tons in 1994 and 5.5 million tons in 1993."

Petroleum and petroleum products continued to rank as Houston's top import commodities by tonnage, followed by iron and steel. But petroleum and petroleum products also headed the list of export commodities, followed by organic chemicals, cereals, cereal preparations, plastics and animal oils and fats.

Besides the continued strong statistical outlook, Mr. Kornegay points to optimism over the Ship Channel enlargement project as the highlight of his year. Controversial and in the works since 1987, the project ranks among the largest under consideration anywhere in the nation.

As one of the most expensive harbor projects ever contemplated in the United States, the enlargements planned for Houston and the neighboring Port of Galveston would add them to the 45-foot depth club. But those plans have been mired in controversy ever since 1987 when the first feasibility reports surfaced.

"The first time anyone sees two ships cross in the Houston Ship Channel, it's quite a sight. They hold their breath," said Arthur McKenzie, president of the New York-based Tanker Advisory Center, an industry consulting firm. ''But the safety record is still good and the pilots do a good job."