Gov. Linda Lingle and state House and Senate Democrats have agreed to collaborate on a six-year, $842 million plan to increase capacity and improve operations at state harbors.

The first phase of the plan would be paid for using $124.4 million in revenue bonds, which Lingle proposed Monday in her supplemental budget. The rest would be financed through bonds and increases in harbor fees and land leases. The state has selected the Aloha Tower Development Corp. to develop the plan.

Nearly half of the money — $345.1 million — would go to cramped Kahului Harbor on Maui, where the island's population has expanded by 32 percent over the past 15 years, increasing the demand for goods.

The state plans to build a new ferry and barge slip, terminal building, and cruise ship terminal on the west side of the harbor, along with a new breakwater to shield against wave surges. A new breakwater is planned for the east side of the harbor, which also would get an upgraded fuel line.

The intent at Kahului is to separate passenger and cargo traffic to ease potential conflicts now that Hawaii Superferry and cruise ships are using the harbor more frequently.

The modernization plan was drafted by the state Department of Transportation in consultation with the Hawai'i Harbor Users Group, which includes Matson Navigation Co., Horizon Lines, Young Brothers, Norwegian Cruise Lines, Superferry and other harbor users.

"This is a very important day for our industry," said Gary North, chairman of the harbor users group and a senior vice president at Matson, describing a looming shortage of port facilities.

Lingle announced the details of the plan at an afternoon news conference at the state Capitol, where she was joined by several House and Senate Democrats. Joint appearances between the Republican governor and Democratic lawmakers are rare, and yesterday's event was a sign of agreement on the harbor improvements.

"It seems to me on the big things, we are getting it right," Lingle said of cooperation between her administration and the Legislature.

State Sen. J. Kalani English, D-6th (E. Maui, Moloka'i, Lana'i), the chairman of the Senate Transportation and International Affairs Committee, said the harbor improvements are overdue. He said he would likely ask that repairs at Hana, in isolated East Maui, be added to the plan. But he otherwise endorsed the proposal.

"If we are unable to do this, I don't think this opportunity will come around for another 50 years, and our people in Hawai'i really, absolutely deserve this infrastructure," he said.

Lingle said cargo container volume alone is expected to increase by 27 percent in 2010 and 66 percent by 2015. The cruise ship industry and Superferry envision growth in passenger and vehicle traffic between islands, but that will depend on the strength of the tourism market and the demand for interisland ferry service.

The plan includes $257.3 million in improvements at Honolulu Harbor, the state's hub, including a deep-draft wharf that could berth two container ships, and a 70-acre container yard at Kapalama that would connect to the Young Brothers' barge yard.

On the Big Island, $87.8 million in improvements are planned for Kawaihae Harbor, including the construction of a new multi-use pier that would eventually be used by Hawaii Superferry. At Hilo Harbor, the state wants to spend $61.4 million, including money for a new pier and interisland barge handling yard, and a third harbor entrance to help separate cruise-ship passenger and cargo traffic.

At Nawiliwili Harbor on Kaua'i, the state plans $10.3 million in spending for a new multi-use berth along the jetty to help with a new liquid bulk storage facility.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.

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