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Cranes Lift Upstart Above Competition

Machinery: By bidding low and building alliances, a Chinese company has secured major contracts in American ports.

January 27, 2002|TIM REITERMAN | TIMES STAFF WRITER

The port withheld $600,000 in payments to ZPMC because of the boom support issue and problems with personnel elevators, brakes and paint. The dispute has dragged on for more than five years, with port officials rejecting ZPMC demands for payment and ZPMC suing.

Port officials now say they are "comfortable" with the boom supports, and ZPMC is completing what port officials call "warranty" work at no charge.

While the dispute played out, Grigsby, ZPMC's partner, was indicted along with former port director Carmen Lunetta on federal charges of misappropriating more than $1 million in port crane usage fees. ZPMC was not implicated.

Noting that prosecutors presented "substantial evidence of greed and public corruption" at the port, the trial judge acquitted Grigsby and Lunetta in June 1999 after concluding the allegedly stolen funds were not the county's.

Grigsby is no longer associated with ZPMC, which recently bid on another Miami contract and came in $1.7 million a crane lower than its competitor.

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Oakland: A Surprising Find

On April 1, 1998, officials from ZPMC and Oakland gathered in Shanghai for a contract-signing ceremony for what they called the world's four largest container cranes. Among the dinner speakers was Mike Jordan, an engineering consultant who worked on the world's first container crane four decades earlier in the East Bay.

"In 1958, who would have believed that ... the Port of Oakland would be buying cranes from a company in ... China," he said in prepared remarks. "Four years ago when Oakland decided to purchase cranes from ZPMC, we were anxious, very anxious."

Like other U.S. ports, Oakland took precautions. Records show officials put aside more than $1 million to have consultants oversee ZPMC's design and fabrication of three cranes in the port's first contract with the company in 1994.

Helping ZPMC prepare its $18-million offer for three cranes was Berkley, Oakland's port commission president in the early 1980s. Berkley's role was "very important, even critical," said his associate, Wan. "If he says Oakland should purchase Chinese cranes, his voice is 1,000 times stronger than anyone."

Smalley, the port's crane chief, had never seen a bidder hire a former commissioner. "I don't want to say they owe the contract to him, but his efforts were pretty [helpful]," he said. "I think it was shrewd."

Berkley declined to discuss ZPMC, saying, "I find the job for them, and they win or lose in public bidding."

During the design phase, ZPMC's young and energetic engineers lived in the Bay Area so they could work with port consultants and staff. They set up shop at the Oakland Post, a community paper owned by Berkley. They put in seven-day workweeks.

In summer 1999, after the port awarded ZPMC a new contract for four additional cranes at $6 million each and options for nine more, port staff made a disturbing discovery. "We have seen ... unusually high deflections in the sill beams of all three of our cranes," Smalley said. "The ends are bending down, causing the legs to bow.

"I've never seen this before in a crane, but we've never had cranes this big before," Smalley said. "Theoretically, it should not bend."

The sill beams form the foundation above the crane's train-like gantry wheels. The bending, Smalley said, could thwart a rocker device that equally distributes the crane's weight among its wheels. He said repairs were made, and the port's consultant assured him that the stress on the cranes is less than half the allowable amount.

Jordan said his firm evaluated 10 of ZPMC's gantry cranes in the state and found that the three Oakland cranes and one in Long Beach had leg deflections of up to "a few inches."

"I think [ZPMC] had some fabrication problems," he said. "But the net result is a satisfactory crane, safe....The structural integrity is as good as the specification requires."

Does it pose any conflict to evaluate cranes that his company was paid to help oversee during design and construction? "You can't talk your way out of a structural failure," he said. "It's not as conflicting as it appears."

Ben Hoiland, the state-licensed crane surveyor who detected deflections in a ZPMC crane at the Maersk Sealand terminal in Long Beach in the summer of 2000, said measurements over time will show whether the bowing is growing worse, posing any risk of collapsing like a card table. "If this condition is as reported and if the condition is dynamic, it is a major concern and needs to be addressed and modifications need to be made," he said.

Officials at Cal/OSHA said they were unaware of the Long Beach crane deflections until an inquiry by The Times. They later heard about problems with the Oakland cranes through an anonymous call a year after the bending was discovered.

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