Transmittal 5

TRAPAC TERMINAL PROGRAM

Cost Summary & Status Update
August 2013

SUMMARY:

The TraPac Terminal Program consists of 10 projects and will provide wharves, automated backlands,
rail facilities, buildings, and gates for the Port of Los Angeles’ first automated container terminal at
Berths 136-147.

In February 2012, the TraPac Terminal Program was identified in the City’s Priority Capital Projects at the
Port. This program will deliver the first automated terminal on the West Coast.

Cost Summary
The baseline budget for this program of $364,495,525 was approved by the Board on April 19, 2012. A
significant portion of this cost estimate was based on conceptual level information, particularly the
automated portions of the program. Our current cost estimate for the program has increased to
$510,412,388, a 40% increase or $145,916,813, due to a number of factors detailed in the Background
Section of this memo.

There was no grant funding at the time the baseline budget was set. Since then, the Port has secured
$60,081,000 bringing the POLA Share amount to $450,331,388, a 23.5% increase.

It is important to note that these cost increases are not a result of tenant initiated scope changes. The
table below indicates the overall baseline, Grant Funding, current cost estimate, and the delta.

TraPac Terminal Program

Baseline Budget (4/19/2012) $364,495,525
Grant Funding $0
POLA Share $364,495,525

Current Cost Estimate $510,412,338

Grant Funding $60,081,000
POLA Share $450,331,338

$145,916,813
Delta = Current Cost Estimate – Baseline Budget
(40.0% increase)
$85,835,813
Delta POLA Share = Current POLA Share – Baseline POLA Share
(23.5% increase)

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Current Status Summary

The Program is on schedule and continues to move forward. Three projects are complete, and three are
under construction. Two projects are nearing advertisement, and the last two are in design and
planning. See attached Exhibit 2 for a project listing and status.

BACKGROUND

The TraPac Terminal Program will expand, modernize, and automate the TraPac container terminal at
Berths 136-147. The improvements consist of expanding and redeveloping container terminal facilities,
new buildings and structures, a new main gate and secondary gate, a new wharf extension and upgrades
to the existing wharf facilities, AMP, a new intermodal container transfer facility (ICTF), and automated
backland infrastructure.

Consultant CH2M Hill was selected as the designer for the automated backlands due to their experience
in container terminal automation design, specifically APM Terminal in Norfolk, VA, the only existing
automated terminal in the United States. There is no standard design for automated container
terminals, each is unique based on layout, operational needs, and equipment. The conceptual
construction cost estimates for the automated backlands were prepared by the consultant in October
2011, based on costs and experience in the development of the Norfolk terminal. Design of the first
phase of Berths 142-147 Backland automation began early 2012, and subsequent phases started design
near the end of 2012. As design progressed, the cost estimates increased as a result of factors unique to
this development and the current bidding climate. Berths 144-145 Backland Improvements (Phase 1C
automation) opened bids in January 2013 with unit bid item costs much higher than anticipated at the
baseline budget.

Cost Increase Factors

The primary reasons for the cost increase for the TraPac Terminal Terminal are indicated below. A
detailed Cost Increase Breakdown is included as Exhibit 3:
1. Electrical System
(Current Estimate $67.08 M - Baseline Estimate $15.01 M = Delta $52.07 M)
a. As design of the terminal progressed, it was evident that automation requires a much more
extensive electrical infrastructure than estimated, a 4.16 kV power supply system was
assumed in the baseline estimate. During the design process, it was determined that a 12.47
kV power supply system was required, which resulted in additional infrastructure including
new high voltage 34.5kV electrical substations, multiple feeds from DWP, switchgear,
transformers, voltage conversion switchgear, and extensive underground conduit for
telecommunication, fiber optics, and power. 12.47 kV is a US standard voltage; Norfolk, VA
is supplied by 13.2 kV and CTB Hamburg is 10 kV.
b. Construction activities in the San Pedro Bay are at a historic high. The current bidding
climate is showing significant signs of large cost increases, particularly with electrical
infrastructure. With the number of AMP projects in construction, in both ports, the
availability of equipment and resources have been stretched and is resulting in increased
costs showing up in recent bids.
2. Storm Drain System
(Current Estimate $14.53 M - Baseline Estimate $1.63 M = Delta $12.90 M)
– The original storm drain design consisted of infiltration to comply with the City of Los
Angeles Watershed Protection Program and the Standard Urban Stormwater Mitigation

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Plan (SUSMP). The existing site is contaminated. Since infiltration is prohibited due to the
high levels of contamination, the storm drain system resulted in a very intricate design,
including sand filtration, subdrains, trench drains, and overflow system.
3. Concrete Pavement & Foundations
(Current Estimate $24.60 M – Baseline Estimate $3.80 M = Delta $20.80 M)
– Due to site conditions and geotechnical studies, design is resulting in thicker concrete
pavement sections, pile supported buildings and structures, thicker and stronger crane rail,
and surcharge to decrease long-term settlement.
4. Water/Fire Protection System, Los Angeles Fire Department
(Current Estimate $6.01 M - Baseline Estimate $1.22 M = Delta $4.79 M)
– The automated stacking block layout does not provide for typical LAFD access per code,
design was approved by LAFD to incorporate an extensive stand pipe system, containment
areas, and additional access points to allow LAFD to provide fire protection.
5. Fencing and Specialty Gates
(Current Estimate $3.88 – Baseline Estimate $0.75 = Delta $3.13 M)
– Life Safety fencing surrounding the automated areas and individual blocks are required to
provide life safety and separation between automated and manned operations. Additional
specialty gates, with electrical infrastructure, will be equipped with radio-frequency
identification (RFID) to maintain safety for personnel accessing the automated areas.
6. Construction Inflation ($8.60 M)
– Per Engineering News Record (ENR), there was a 5.9% cost increase in local labor union
wages for 2012. Recent bids are indicating much higher labor and material costs.
7. Phasing, Specialty Design, Construction Management, Miscellaneous
(Current Estimate $58.09 – Baseline Estimate $14.50 = Delta $43.59 M) See Exhibit 3 for details.
- Additional phasing within each project is required to facilitate ongoing terminal operations
at a higher than anticipated level and concurrent construction projects that are adjacent,
nearby and interdependent.
- Additional miscellaneous specialty infrastructure associated with automation: reefer racks,
protected access, booth and weight activated pad for trucker safety.
- Grant funding deadlines required some schedules to be accelerated impacting design and
construction phasing.
- Additional utility relocations were identified during design.

Value Engineering
Engineering has and continues to perform value engineering to decrease the cost estimates. To date,
approximately $50 Million has been trimmed from these projects’ cost estimates (see attached Exhibit
4).The following changes have been incorporated and have helped to reduce the cost estimates:
revisions to materials and design elements of the storm drain system and electrical system, foundation
selection for the automated stacking crane (ASC) crane rail, redesign of the rail mounted gantry (RMG)
crane rail foundation, using construction material for surcharge instead of hauling material in and out,
revising the phasing plan to reduce mobilization costs, early detailed coordination with 3rd party utilities
to minimize impacts during construction.

The scopes of the projects, for the TraPac Terminal Program, are consistent with the proposed lease
amendment.

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FINANCIAL IMPACT:

The TraPac Terminal Program Baseline budget of $364,495,525 was approved by the Board on April 19,
2012. The proposed revised baseline cost of $510,412,388 for the TraPac Terminal Program will result in
an increase of $145,916,813. Reimbursement grant funding in the amount of $60,081,000 was secured,
resulting in a change in the POLA cost share from $364,495,525 to $450,331,338, which is a $85,835,813
increase.

The TraPac Terminal Program is expected to be completed in 17/18. It is expected that through FY
12/13, $154,263,637 of the $364,495,525 April 19, 2012 Board adopted baseline budget, will have been
expended. Funds in the amount of $99,344,073 have been included in the FY 13/14 Capital Budget for
the TraPac Terminal Program costs. Revised TraPac Terminal Program costs have been incorporated into
the Harbor Department’s ten-year Capital Improvement Program as follows:

Fiscal Through 13/14 14/15 15/16 16/17 17/18 Total

Year 12/13 (estimated) (estimated) (estimated) (estimated) (estimated)
Amount $154,263,637 $84,426,874 $114,725,075 $92,587,482 $52,122,062 $12,287,208 $510,412,388

These project estimates include approximately 10% contingencies applied to individual project budgets.

Each fiscal year capital expenditures are requested to be budgeted as part of the annual budget
adoption process before the Board.

Grant Funding
Grant Funding in the amount of $60,081,000 has been allocated for three projects, within the TraPac
Terminal Program. By the end of 2013, the Port should begin receiving reimbursements on one project.
The remaining two should begin receiving reimbursements by 2014 and 2015.

Rate of Return:
The original Rate of Return at Board approval of the baseline budget was 10.09%. The revised Rate of
Return, based on the current cost estimate, is 8.75%. The FY 2013-2014 and 5-year CIP includes the
current cost estimates.

This Program continues to make financial sense because it:

 Fulfills our contractual commitment to deliver the terminal infrastructure required under our
permit with TraPac
 Creates the capacity needed to meet the revenue projections planned for TraPac
 Returns 8.75% on our terminal infrastructure investment (compared to 10.09% initially)
 Allows us to take advantage of significant grant funding opportunities (see Exhibit 2)
 Compares well with POLB’s per-acre development cost for similar automated terminal
infrastructure ($3.3M/acre @ TraPac versus $3.9M/acre @ POLB’s Middle Harbor, see Exhibit 5)

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PROGRAM CURRENT STATUS

The status of the TraPac Terminal Program projects are at various stages from design and planning, bid
and award, construction, and complete (see attached Exhibit 2). The remaining projects awaiting a
construction start are described below.

TraPac Terminal Project Status Bid & Award Construction

Berths 142-143 Backland Impr. 100%
Sept. 2013 – Dec. 2013 Feb. 2014 – Feb. 2018
(Phases 2-4 – Automation) Design
Berths 142-147 ICTF 100%
Sept. 2013 – Dec. 2013 Feb. 2014 – Feb. 2016
(Automation) Design
Berth 142 Crane Maintenance
80% Design Mid 2015 – Early 2016 Early 2016 – Early 2017
Building
Berths 134-135 Backland Planning/
Mid 2015 – Early 2016 Early 2016 – Mid 2017
Terminal Pre-Design

These projects, in addition to the three under construction (Terminal Buildings and Main Gate, Phase 1B
Automation, and Phase 1C Automation), are all moving forward on schedule. Staff will continue to
monitor the progress of these projects and report their status on a quarterly basis, implementing any
and all cost saving measures available within the scope of our contractual commitments.

EXHIBITS:
Exhibit 1 TraPac Terminal Projects - Site Map
Exhibit 2 TraPac Terminal Projects – Status & Cost Breakdown
Exhibit 3 TraPac Terminal Projects – Cost Increase Breakdown
Exhibit 4 TraPac Terminal Projects – Estimated Cost Reductions
Exhibit 5 POLA/POLB Comparison (FYI Only)

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Exhibit 1
TraPac Terminal Projects - Site Map

Note Berth 200 Rail Yard & B145-147 Wharf not shown for clarity.

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Exhibit 2
TraPac Terminal Projects – Status & Cost Breakdown
TOTAL PROJECT - DESIGN & CONSTRUCTION
Feb. 2011 Feb. 2011
Sept. 2009 (at Estimate (w/ Estimate April 19, 2012 Proposed Delta Grant
TraPac Terminal WO Status Lease conventional (includes Baseline Budget (May (Proposed - Funding
Projects Execution) backland, no automation) Budget 2013) Baseline)
automation)
1 EIR/EIS and 24612 Complete $5,110,405 $5,721,025 $5,721,025 $5,721,025 $5,221,189 $(499,836)
Small Misc 25111
Impvs.
2 Berths 145 - 24242 Complete $107,695,285 $115,075,001 $115,075,001 $115,075,000 $111,931,001 $(3,143,999)
147 Wharf 24898
Imp., 24943
including
AMP at B136-
139 and
B144-147
3 Berth 147 25132 Complete included in included in included in $4,215,000 $3,641,577 $(573,423)
Backland B142 - 143 B142-143 B142 - 143
Impr. (Phase Backland Backland Backland
1A-
Automation)
4 Rear Berths 24585 In Const. $36,935,375 $54,000,000 $54,000,000 $62,500,000 $80,000,000 $17,500,000
136-139
Terminal
Buildings &
Main Gate
5 Berths 145 - 25143 In Const. included in included in included in $19,870,000 $13,862,310 $(6,007,690)
147 Backland B142 - 143 B142-143 B142 - 143
Impr. (Phase Backland Backland Backland
1B -
Automation)
6 Berths 144 - 25131 In Const. included in included in included in $26,595,000 $50,034,494 $23,439,494 $12,705,000
145 Backland B142 - 143 B142-143 B142 - 143
Impr. (Phase Backland Backland Backland
1C -
Automation)
7 Berths 142 - 24498 In Design $52,503,000 $86,068,125 $118,500,000 $79,340,000 $143,422,405 $64,082,405 $26,664,000
143 Backland
Impr. (Phases
2–4
Automation)
8 Berths 142 - 24551 In Design $36,807,446 $40,426,000 $40,426,000 $40,426,000 $85,865,560 $45,439,560 $20,712,000
147 ICTF
(Automation)
9 Berth 142 25177 In Design included in included in included in included in $5,680,302 $5,680,302
Crane B142 - 143 B142-143 B142 - 143 B142 - 143
Maintenance Backland Backland Backland Backland
Building
10 Berths 134 - 25138 Pre- $11,258, 894 $10,753,500 $10,753,500 $10,753,500 $10,753,500 $ -
135 Backland Design
Expansion

GRAND $250,310,405 $312,043,651 $344,475,526 $364,495,525 $510,412,338 $145,916,813 $60,081,000

TOTAL
Increase in Total Project Budget 40.0%
Grant Funding $60,081,000
POLA SHARE $250,310,405 $344,475,526 $364,495,525 $450,331,338
Increase in POLA Share 23.5%

*Cost w/o EIR: $245,200,000

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Exhibit 3
TraPac Terminal Projects - Cost Increase Breakdown
Current Estimate Baseline Estimate Delta
Electrical System ($52 M Increase)
Phase 1C Electrical System $ 12,404,000 $ 2,398,600 $ 10,005,400
New & Relocated HMP $ 780,000 $ 584,000 $ 196,000
Phs 2-4 Conduit, Wires, Cables, Ductbanks, MHs) $ 21,400,000 $ 5,213,300 $ 16,186,700
Equipment (Switchgears, Meters, Substations) $ 10,700,000 $ 4,000,000 $ 6,700,000
New & Relocated HMP $ 2,160,000 $ 1,386,000 $ 774,000
ICTF Conduit, Wires, Cables, Ductbanks, MHs) $ 5,980,000 $ 425,000 $ 5,555,000
Equipment (Switchgears, Meters, Substations) $ 11,400,000 $ 200,000 $ 11,200,000
New & Relocated HMP $ 2,260,000 $ 800,000 $ 1,460,000
Subtotal $ 67,084,000 $ 15,006,900 $ 52,077,100
Storm Drain System ($12.9 M Increase)
Phase 1C SD System, including Geotextile $ 4,230,000 $ 346,000 $ 3,884,000
Phases 2-4 SD System, including Geotextile $ 6,200,000 $ 740,000 $ 5,460,000
ICTF $ 4,100,000 $ 540,000 $ 3,560,000
Subtotal $ 14,530,000 $ 1,626,000 $ 12,904,000
Concrete Pavement & Foundations ($20.8 M Increase)
Phases 1B & 1C Concrete Pavement $ 6,036,340 $ 1,500,000 $ 4,536,340
Phases 2-4 Concrete Pavement $ 6,500,000 $ 1,100,000 $ 5,400,000
RMG Rail Foundation (Ties/Ballast to Concr.
ICTF Beam) $ 6,000,000 $ 700,000 $ 5,300,000
Building Foundation (Matt to Piles) $ 600,000 $ 200,000 $ 400,000
Surcharge $ 3,000,000 $ 3,000,000
Crane Maintenance Building (Matt Foundation to Piles) $ 2,500,000 $ 300,000 $ 2,200,000
Subtotal $ 24,636,340 $ 3,800,000 $ 20,836,340
Water/Fire Protection System, Los Angeles Fire Department ($4.8 M Increase)
Phase 1C Water Distribution System $ 1,206,000 $ 300,000 $ 906,000
Phases 2-4 Water Distribution System $ 4,800,000 $ 920,000 $ 3,880,000
Subtotal $ 6,006,000 $ 1,220,000 $ 4,786,000
Safety Fencing and Specialty Gates ($3.1 M Increase)
Phase 1C $ 777,819 $ 100,300 $ 677,519
Phases 2-4 $ 1,900,000 $ 152,000 $ 1,748,000
ICTF $ 1,200,000 $ 500,000 $ 700,000
Subtotal $ 3,877,819 $ 752,300 $ 3,125,519
Construction Inflation Subtotal $ 8,600,000 $ 8,600,000
Phasing, Specialty Design, Construction Management, misc ($43.6 M Increase)
Phase 1C Reefer Racks $ 2,229,000 $ 1,000,000 $ 1,229,000
Booth & weight activated pad for trucker safety $ 78,900 $ 78,900
Prefabricated Walkways $ 110,000 $ 110,000
10% Contingency at Award $ 3,839,954 $ 3,839,954
Phs 2-4 Additional Design/Construction Support $ 2,000,000 $ 2,000,000
Reefer Racks $ 8,700,000 $ 4,000,000 $ 4,700,000
Phasing/Mobilization 10% $ 8,000,000 $ 8,000,000
Booth & weight activated pad for trucker safety $ 230,000 $ 230,000
Prefabricated Walkways $ 400,000 $ 400,000
Contingency/Allowance $ 8,000,000 $ 6,000,000 $ 2,000,000
10% Contingency at Award $ 11,000,000 $ 11,000,000
ICTF Additional Design/Construction Support $ 1,500,000 $ 1,500,000
Contingency/Allowance $ 5,000,000 $ 3,500,000 $ 1,500,000
10% Contingency at Award $ 7,000,000 $ 7,000,000
Subtotal $ 58,087,854 $ 14,500,000 $ 43,587,854

GRAND TOTAL $ 145,916,813

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Exhibit 4
TraPac Terminal Projects – Estimated Cost Reductions
Estimated Cost
Project Status Description Notes
Reduction*

Berths 144-145 Material substitution, CM to

Storm Drain System $ 600,000
Backland Impr. (Phase In Construction verify amount
1C – Automation)
Subtotal $ 600,000

Demo & Dispose AC pvmt $ 650,000 Reduced volume

Excavation $ 75,000 Reduced volume
Asphalt Concrete pvmt $ 400,000 Reduced quantity
Maximized Department
CMB $ 626,000
furnished CMB
Curb in Rows $ 890,000 Eliminated
Concrete pvmt & Misc Concrete $ 620,000 Reduced quantity
Reduced quantity & adjusted unit
Ballast, Subbalast, Crushed Rock $ 920,000
costs per Ph 1C bids
Reduced quantity, modified
Reefer Racks $ 3,665,000
Berths 142-143 design
Backland Impr. (Phases In Construction Container Corridor $ 220,000 Reduced quantity
2-4 Automation) Concrete barriers, pvmt markings, tire
$ 166,000 Reduced quantity
stops
Reduced quantity & adjusted unit
Fencing, gates, railings $ 790,000
costs per Ph 1C bids
Storm Drain System $ 3,700,000 Material substitution (HDPE)
Reduced from 15% to 10% of
Mobilization/Phasing $ 7,750,000
subtotal
Re-evaluated materials &
Electrical System $ 13,860,000
equipment, adjusted unit costs
Contingency $ 5,000,000 Reduced contingency
Subtotal $ 39,332,000

Modified foundation & unit costs

(TraPac agreed to increase # of
RMG Rail System $ 5,900,000 wheels from 6 to 8 on RMGs to
accommodate the change in
design)
Rail $ 240,000 Refined estimate due to design
Berths 142-147 ICTF Storm Drain System $ 343,000 Material substitution (HDPE)
100% Design
(Automation)
Replaced with onsite
Surcharge Material $ 1,500,000
construction material
Modified AC mix, to not require
Slurry Seal - deleted $ 100,000
slurry seal
Contingency $ 1,700,000 Reduced contingency
Subtotal $ 9,783,000

TOTAL $ 49,715,000

*Estimated Cost Reductions are estimates only

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