U.S. Fifth Circuit Delivers Affirmation of District Court's Favorable Ruling On Bayport

Three-judge panel upholds lower court's motion affirming Corps of Engineers, PHA


HOUSTON, Aug. 10, 2005 (PRIMEZONE) -- The Port of Houston Authority (PHA) today welcomed the decision by the U.S. Court of Appeals for the Fifth Circuit affirming the 2004 judgment by Judge Vanessa Gilmore of the U.S. District Court for the Southern District of Texas, confirming the federal permit for the PHA's Bayport Container and Cruise Terminal project. The affirmative ruling by the Fifth Circuit's Judges Will Garwood, Jerry E. Smith, and Edith Brown Clement upholds Judge Gilmore's decision granting the motions for summary judgment filed by the U.S. Army Corps of Engineers and PHA, and denying the motions filed by opponents of the Bayport project. The Fifth Circuit has now endorsed Judge Gilmore's ruling, rejecting challenges to the permit that the Corps granted to PHA to allow construction to proceed, and dismissing the challenge filed by Bayport opponents. A related state court litigation case also was recently resolved in the PHA's favor.

"The port authority is gratified to prevail in this important matter," stated PHA Chairman Jim Edmonds. "The port authority greatly appreciates the work of the Fifth Circuit's panel of judges and their willingness to decide this matter in a very short time frame. The port authority will continue its all-out efforts to work with local communities and be a good neighbor during development and operation of the Bayport Container and Cruise Terminal."

In January 2004, the PHA and the Corps granted the federal permit for construction of the Bayport project, marking a critical step in the process to build the $1.2 billion terminal. Construction of Phase 1A -- including 1,660 feet of the ultimate 7,000 ft. wharf and approximately 65 acres of the ultimate 1,043 acre facility -- began in June 2004 and is targeted for completion in summer 2006. Additional phases are planned to be built incrementally on an as-needed basis.

The Bayport Container and Cruise Terminal will result in the creation of thousands of new jobs and will add hundreds of millions of dollars to the region's economy. The modern facilities at Bayport will enable the PHA to provide efficient services to its existing and future customers.

The PHA has designed the terminal to minimize the effects of construction on the surrounding area, and has preserved approximately 1,100 acres of land for environmental mitigation.

Chairman Edmonds stated, "The decision of the Fifth Circuit caps a long approval process that shows that the system works. All interested parties have had a voice in shaping Bayport and their voices have been heard. As a result, we have a better project."

Background

On December 5, 2003, the Corps released its final Record of Decision (ROD), that recommended approval of the Bayport project. The ROD also included the District Engineer's views on the probable effect of the proposed project on the public interest. In part, the document stated that " . . . even if the Corps were to conclude that all of the aquatic areas on the site, including all of the wetlands on the site, were subject to CWA (Clean Water Act) jurisdiction, (PHA) has provided ample mitigation to compensate for the loss of all aquatic areas on site that will be filled or otherwise degraded by the project."

Additionally, in 2003, PHA participated in a public forum sponsored by the Texas Commission on Environmental Quality and requested by State Rep. John Davis, to discuss water quality issues related to the Bayport project. More than 500 citizens expressed their views of support and opposition at the Bay Area Community Center in Seabrook, Texas. Subsequently, in December 2003, the TCEQ approved water quality certification for the Bayport project under Section 401 of the Clean Water Act. TCEQ determined that the Bayport project was consistent with the goals and policies of the Texas Coastal Management Program in accordance with the regulations of the Coastal Coordination Council.

The PHA and the Texas Parks and Wildlife Department have agreed on PHA's plan to preserve coastal habitat as part of the development of the proposed Bayport terminal, including 456 acres along the lower part of the San Jacinto River and 500 acres of prairie habitat. TPWD has indicated that this additional preservation of valuable habitat completes a preservation package that compensates for the impacts of the Bayport facilities.

The U.S. Environmental Protection Agency, U.S. Fish and Wildlife Service, and the TCEQ have also concluded that the PHA's plan adequately addresses their concerns and establishes appropriate conditions for the Bayport permit. The Corps considered the TPWD agreement, written statements from the other agencies, and public comments as well in formulating the Bayport permit ROD.

In addition to preservation, PHA's design for the Bayport facility includes several other mitigation measures, such as a buffer zone around the facility with a landscaped sight and sound berm, an extensive storm water collection system to help protect Galveston Bay waters, and lighting systems designed to limit night-time impacts at the facility. PHA's Bayport plan also involves jurisdictional wetland replacement at a ratio of more than three to one, to increase the habitats available for fish, waterfowl and other coastal wildlife, and the beneficial use of dredged material to create an additional 200 acres of inter-tidal marsh.

Air emissions reduction, solid waste recycling, energy conservation, and storm water quality improvement are the key objectives of PHA's environmental management system (EMS). In 2002, Barbours Cut and PHA's central maintenance facility became the first of any U.S. port facilities to implement an EMS that complies with ISO 14001, the global standard for environmental excellence. PHA is committed to meeting ISO 14001 standards upon the completion and opening of the Bayport facility.

"The Port of Houston Authority has drawn on expertise developed in other ports around the world to make the Bayport facility an environmental leader," Chairman Edmonds said. "We will continue to review our development plans as new environmental technologies and techniques evolve. We look forward to completing the first phase of Bayport to accommodate the needs of our customers, enhance the Texas cruise industry, promote economic development and foster job creation."

The Port of Houston Authority owns and operates the public facilities located along the Port of Houston, the 25-mile long complex of diversified public and private facilities designed for handling general cargo, containers, grain and other dry bulk materials, project and heavy lift cargo, and other types of cargo. Each year, more than 6,600 vessels call at the port, which ranks first in the U.S. in foreign waterborne tonnage, second in overall total tonnage, and sixth largest in the world. The Port Authority plays a vital role in ensuring navigational safety along the Houston Ship Channel, which has been instrumental in Houston's development as a center of international trade. The Barbours Cut Container Terminal and Central Maintenance Facility are the first of any U.S. port facilities to develop and implement an innovative Environmental Management System that meets the rigorous standards of ISO 14001. Additionally, the port is an approved delivery point for Coffee "C" futures contracts traded on the New York Board of Trade's Coffee, Sugar & Cocoa Exchange.

For more information, please visit www.portofhouston.com

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