DUTRA DREDGING

A MEMBER OF THE DUTRA GROUP

Contractor License #707580 A

1000 POINT 5AN PEDRO ROAD

SAN RAFAEL, CALIFORNIA 94901

(415) 121-2131   FAX  (415) 121-1394





November 18, 1996                                       Serial Letter No. 0189


Department Of The Army
San Francisco District
Corps of Engineers
Bay Model Building
Sausalito, CA 94965

Attn:  Max Blodgett, Chief, Construction Operations

Ref:   Contract No. DACW07-95-C-0003

Subject:  Galbraith Disposal


Dear Mr. Blodgett:


Currently the Water Quality Control Board has issued a cease and desist order
as regards releasing effluent from the area.  Test results have shown
significantly high readings of PAH's and correspondingly high mortality rates
of the laboratory fish bio-assay.










We are greatly concerned that the elevated PAH's pose a significant potential
liability to us if handled in the current manner.  Our insurance and bonding
company have warned us not to expose ourselves to the potential liabilities
without further investigation as to the nature of material to be dredged in
Todd and Schnitzer Wings and a methodology to safely handle this material.




We understand that the Corps will be doing more testing to assess the material
so that it may be handled in a safe and environmentally correct manner.




Due to these conditions we will remove the Liberty Offloader from the project
site.  We can utilize this equipment on another project while solutions to the
potential hazards are developed.  By using the Liberty Offloader on another
project, delay costs and standby costs will not affect your project.  During
the time plans are developed the Galbraith site will be at rest which will help
the existing conditions.  Additionally, the ship in the Todd Wing should be
moved then.


















Max Blodgett

Serial Letter No. 0189

November 18, 1996

Page 2







We reiterate that we want to, and will dredge the Todd and Schnitzer Wings
when the issues at hand are resolved.  We are not abandoning this piece of the
work, rather, we will be able to use our equipment in a productive manner
during the testing and planning period without impact to us and additional,
non-productive, costs to you.




If there are any questions, please contact us.




Sincerely,
DUTRA GREDGING COMPANY






Robert D. Johnston
President


RDJ/lgd