That makes eight ships slated this year to leave the aging flotilla of government vessels, known as the James River Reserve Fleet, or Ghost Fleet, moored off Fort Eustis in Newport News. Its caretaker, the U.S. Maritime Administration, is under a September 2006 congressional deadline to get rid of about 60 unwanted cargo and military-support vessels.

The federal contracts announced Monday are the first ones for North American Ship Recycling , a maritime business located at the old Sparrows Point shipyard in Baltimore Harbor. Once operated by Bethlehem Steel Corp. in its heyday during World War II, Sparrows Point reopened this year after emerging from bankruptcy with new owners and a new focus.

Norman Y. Mineta , the U.S. transportation secretary, said more shipbreaking work may be on its way to Baltimore if the newly renovated yard performs well. "These contracts could be just the beginning," Mineta said in a statement.

By the end of the year, officials said, the two decrepit ships will be towed down the James River and pulled north up the Chesapeake Bay to Sparrows Point. Their steel will be recycled, their wastes removed and disposed of. The work is expected to generate between 40 and 50 jobs, said company president Vincent Barletta .

"We're looking for a long-term relationship here," said Barletta, a Boston native whose family has long been in the construction business. The two vessels about to leave Virginia - the Lauderdale, built in 1944 , and the Mormac Moon , built in 1965 - are considered some of the most environmentally risky in the Ghost Fleet. That's because their hulls are worn especially thin and their tanks still hold tons of waste oils.

According to federal inventories, the two ships contain more than 400 long tons of oil and fuel, as well as undisclosed amounts of lead, asbestos, mercury and toxic PCBs in their internal wiring.

Earlier this summer, the Maritime Administration announced two other disposal contracts for six more ships. Those vessels, each about 500 feet long and at least 35 years old, are slated to be towed to and broken up at two Texas salvage yards - ESCO Marine and Marine Metals , both in Brownsville, near the Mexico border.

The Mormac Moon was originally supposed to go to Texas but now is being sent to Baltimore, due to scheduling and technical obstacles. Another, unnamed vessel will head to Texas in its place, officials said.

Environmental groups are challenging in court a proposed export of nine ships to Great Britain for dismantling, saying American shipyards should handle the job, thus avoiding risks of a fuel spill or other accident while crossing the Atlantic Ocean or in England.

The Chesapeake Bay Foundation said Monday that it would not oppose the Sparrows Point contract, if the ships are towed "responsibly and in an environmentally safe manner."

"This actually seems like a good solution for a Virginia environmental problem while helping the economy in Maryland," said Chuck Epes , a foundation spokesman in Richmond.

Reach Scott Harper at 446-2340 or at scott.harper@pilotonline.com

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