Port bids deadline extended
Published 10:27 pm Wednesday, July 11, 2012
Virginia’s top transportation official has extended the deadline for alternative proposals to APM Terminals’ unsolicited bid that would give its Portsmouth facility to the state.
The day before alternative submissions were due, Secretary of Transportation Sean T. Connaughton announced Wednesday that entities wishing to compete against APM’s offer, which has been valued at up to $3.9 billion to the state, now have until Aug. 13 to lodge submissions.
Ryan Pedraza, a program manager for the state’s Office of Public-Private Partnerships, said the original 50-day deadline was extended after “a number of private entities” interested in lodging alternative proposals requested more time.
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He declined to name the entities or say how many have expressed interest.
Pedraza’s office has been criticized over its handling of the APM offer, lodged under the Virginia’s Public-Private Transportation Act, which is intended to facilitate private investment in public transportation infrastructure.
In one view, it had impeded the state from extracting the best possible deal by not giving other potential bidders enough time to put together meaningful proposals.
“The schedule that was put forward was … consistent with our guidelines … and what we believe was a reasonable and achievable time for preparing conceptual proposals,” Pedraza said.
“We made clear we could modify that schedule as needed. We heard from some groups that were interested but just needed some additional time, and we have gone ahead and allowed for some extra time.”
APM’s offer proposes a 48-year contract to operate Virginia’s ports in return for a fixed monthly payment to the state and variable monthly payments based on operating revenues, as well as placing in public hands Portsmouth’s APM Terminals Virginia, in which it says it has invested $540 million.
APM would fund capital improvements at the terminals, including expanding the current annual capacity of APM Terminals Virginia — currently about 1.44 million 20-foot containers — by an estimated 1.2 million containers.
APM, a subsidiary of Danish shipping giant Maersk, would also pay state and local taxes.
Central to the port privatization debate is whether Virginia would be giving away too much by accepting the APM offer.
If the economy continues to struggle, Virginia would benefit from the deal, experts say, but if the economy improves and shipping activity increases, the commonwealth could be shortchanged.
Marseille-headquartered CMA CGM and South Korea’s Hanjin Shipping have written to Pedraza’s office that the APM proposal would create a monopoly that could squeeze them out of Virginia’s ports.
In a prepared statement, APM Terminals North America President Eric Cisco said the company welcomes the deadline extension.