Guam State Clearinghouse - “Latest News”

A federal loan and grant to help the government of Guam build a new landfill has received final approval, and now it’s a matter of getting the documents in place to close the deal, according to USDA Rural Development Office area director Joe Diego, who said the loan could be closed in about 30 days.

The USDA approved a low-interest loan of as much as $88.5 million to help the island build a new landfill, plus $15 million in grant funding to cover any additional construction costs not covered by the loan.

The government of Guam already borrowed $170 million to begin building the landfill and close Ordot dump, and Guam government officials have stated their intent to use the USDA funding for the landfill and to redirect some of the bond money to other infrastructure projects.

The island’s solid waste operations are in receivership and District Court of Guam Chief Judge Frances Tydingco-Gatewood would have to approve any request to substitute USDA funding for the landfill project.

Diego said the USDA loan money will not be released for the landfill construction until after Guam has spent $39.87 million on the project.

That means Guam must use bond funding to pay for the $35.4 million in earthwork and infrastructure projects that have been awarded to local contractors, and must contribute about $4.4 million toward the main landfill construction contract, which was awarded yesterday to Black Construction Corp. The $20.4 million contract is much lower than earlier cost estimates by solid waste receiver Gershman, Brickner & Bratton.

One of the challenges now is ensuring that the landfill project, which already has started, meets USDA loan requirements.

Diego said the federal funding comes from the American Recovery and Reinvestment Act, so one of the main requirements is that the landfill contractors “buy American” in connection with the project.

Gershman, Brickner and Bratton, which started accepting bids for the main landfill construction project on Aug. 17, revised the bid requirements on Sept. 25, noting that contractors are required to buy American.

Contractors are not required to buy American steel, however, if it is 25 percent more expensive than foreign steel, the request for bids states, and contractors were asked to submit bids based on the use of foreign and U.S. steel for purposes of comparison.

The receiver also added a buy-American provision to the bids for road construction and infrastructure, but not for the earthwork contract, which was awarded before Guam received notice of the federal funding.

Ref: PDN 11/13/09