Ship-repair yard opens in Philadelphia

PennShip Services L.C.C., a ship-repair yard next to the busy Aker Philadelphia Shipyard, began operation this week.

The new company is owned by Boston Ship Acquisition L.L.P., a holding company that owns Boston Ship Repair L.L.C., a mile southeast of downtown Boston, which has been operating at capacity for five years.

To start cash flow, PennShip contracted to provide a home base for two 946-foot-long military cargo ships that are part of the U.S. Maritime Administration's ready reserve fleet. The first, the Regulus, steamed into the yard yesterday; the second, the Pollux, is due next month.

The new firm has a 30-year lease on Dry Dock 3, built in 1922, which is 984 feet long and 114 feet wide and was once part of the old Philadelphia Naval Shipyard. Dry docks are huge, contained areas into which large ships can be floated. Once inside, a gate is closed and water is pumped out, leaving the ship dry for repairs.

"It is a magnificent piece of infrastructure, one of the very few places where a 1,000-foot-long ship can go for repair," said Joseph E. Driscoll, vice chairman of the holding company that owns PennShip.

Driscoll, a Boston native, moved here in 1998 to work for real estate entrepreneur J. Brian O'Neill. He was O'Neill's chief financial officer for two years.

Steve DiLeo, chief executive officer of PennShip and its sister Boston yard, predicted that the new yard would be dry-docking a dozen big ships annually within three years.

Experienced workers from Boston will train people here. "That won't last long. We want an all-local workforce," DiLeo said.

About 80 percent of the 3,300-plus ships that come to Delaware River seaports annually would fit in the PennShip dry dock. Being close to that much traffic will be good for business, DiLeo said.

PennShip is leasing the facility from the Philadelphia Industrial Development Corp., a quasi-public agency responsible for redeveloping the former military base. PennShip and PIDC declined to disclose the terms.

The PIDC arranged a $1 million low-interest start-up and worker-training loan. The rent increases as the business grows, said John Grady, a PIDC senior vice president.

PennShip has hired three foremen - Tom Corbett, Jim Costigan and Ed Petermann, all with experience dating back to the old Philadelphia Naval Shipyard and Sun Shipbuilding & Drydock Co. It expects to employ 100 by year's end and 300 by 2010. The hiring office is in a trailer next to the site.

DiLeo said PennShip initially would maintain and repair military and civilian cargo ships and barges. Later, he said, it will take on sophisticated repair and renovation of cruise ships.

"We've got to be sure we're ready before we go after cruise ships," said Donna Connors, vice president for development. "If you mess up first time, they do not come back."

After the Navy left in 1996, the space PennShip is leasing was occupied for a time by Metro Machine Corp., a successful Norfolk, Va., firm that tried to build a warship-repair and ship-dismantling business here.

Grady, the PIDC executive, said adding a ship-repair facility next to the Aker complex, where three oceangoing tanker vessels are under construction, was part of the city's strategy of creating a cluster of maritime businesses that could benefit from being together at the old Navy yard.