HILO >> The state Department of Transportation is to start building a $55-million interisland cargo terminal facility at Hilo Harbor.

A groundbreaking ceremony was held Monday.

The Inter-Island Cargo Terminal facility is to be built in three phases. The first phase involves dredging the harbor to accommodate ships that are to dock at the future pier. The second phase is to start later this year or early next year with construction of a $10-million cargo yard. Construction of the $37-million pier is to be final phase, with work expected to begin in the summer of 2013.

Pier 2 is the only interisland cargo pier at Hilo Harbor. It was constructed in the early 1920s.