・ Additional gate facilities will be constructed as needed to accommodate eastbound and westbound containers that will be trucked from existing rail intermodal facilities to and from the Burlington Northern/Santa Fe ("BNSF") and Union Pacific ("UP") facilities.
・ Movements of empty railcars to T18 from BNSF and UP facilities will use available arrival/departure capacity.
・ The operator will operate the Terminal 18 as outlined in the Terminal 18 Lease.
・ The Port will obtain control of all sites, land areas and rail lines within the proposed Bond Improvements in a manner that will not impede or delay the completion of the Bond Improvements.
In addition, in completing our economic and financial analysis of the terminal, we have assumed that:
・ Notice-to-Proceed for the Bond Improvements will be initiated on November 1,1999, with Project Completion occurring 28 months later.
・ All licenses, permits and approvals, and permit modifications necessary to construct and operate the Bond Improvements will be obtained on a timely basis and any changes in required licenses, or permits and approvals will not require changes in design resulting in either material delays in the date of Project Completion or in significant increases in the costs of the Bond Improvements.
・ The EPC Contractor will construct the Bond Improvements in accordance with the EPC Contract.
III. Background
The Port of Seattle (the "Port") is one of the largest container ports in the United States. In 1998, it ranked fifth in terms of container throughput. U.S. Ports with higher container throughput are Long Beach, Los Angeles, New York/New Jersey, and Oakland.
The Port has several strengths that support the development of container trade:
・ Geographical location in relationship to the Pacific Rim.
・ The natural deep-water harbor that is readily accessible to Post-Panamax vessels/s. (Carriers require 50 feet of water to serve Post-Panamax vessels.)
・ Excellent access to inland markets via the BNSF and UP railroads.
・ Immediate access to the interstate highway system via a controlled access roadway that borders the Port, including T18.
In addition to the Port's strengths, a developing trend in the carrier industry includes the increased use of Post-Panamax container ships, which require deep water access, including channels that are at least 50 feet deep. These ships are becoming economical for use due to the development of Vessel Sharing Agreements (VSAs) or shipping consortia or alliances, whereby one carrier is allowed to place containers on another carrier's ship. The use of such ships require large, efficient container terminal facilities and efficient and convenient intermodal systems (including on-dock rail facilities) to efficiently handle the increased volumes of container traffic. This trend supports the T18 Project.
The Port has determined that additional capacity at T18 is needed due to the following:
・ The container yard in the terminal is nearing its current capacity, which limits the number of future container ships and containers that the terminal can process.
・ The existing intermodal rail yard has inadequate capacity to handle projected container volumes.
・ Significant congestion currently exists at the T18 truck access gates.
The need for expansion and renovation of T18 is further supported by the following:
・ Existing tenants and/or customers are requesting additional space that cannot be provided at other Port of Seattle terminals.
・ T18 represents the best opportunity for terminal expansion to meet carrier requirements at the Port of Seattle (see Section V.C.l.a)).
