Port decision looms

Published 9:44 pm Monday, August 13, 2012

Gov. Bob McDonnell has called an Aug. 24 session in Richmond to hear legislators’ opinions on bids to operate the Port of Virginia.

Rival bids to Maersk subsidiary APM Terminals’ unsolicited proposal to operate port facilities for 48 years, worth up to an estimated $3.9 billion to the state, were due 5 p.m. Monday.

The original deadline had been extended after other groups had requested more time.

Email newsletter signup

About noon Monday, State Transportation Secretary Sean Connaughton said that one rival proposal had been received and two more were expected during the afternoon.  Rival bidders’ names will be released on Aug. 22, he said, revealing that one is a prior bidder from 2009.

In 2009, an unsolicited bid from CenterPoint Properties — which has already said it is opting out this time — drew counter proposals from the Carlyle Group and a partnership between Carrix, Inc. and Goldman Sachs.

McDonnell “wants to get some of the opinions of some of the legislative leaders” during the Aug. 24 public session, Connaughton said.

Connaughton said the session would include remarks from the governor himself, Virginia Port Authority Board of Commissioners Chairman Michael J. Quillen, and industry experts including a representative of the esteemed London-based maritime advisor Drewry.

Under its proposal, APM would pay state and local taxes and fund capital improvements at the terminals, including a major expansion of APM Terminals Virginia, ownership of which the company would also turn over to the state.

A proposal from Virginia International Terminals, a nonstock, nonprofit private corporation established by the state, is also required, to explain why it should be allowed to continue operating APMT, Norfolk International Terminals, Newport News Marine Terminal and the Virginia Inland Port.

Cargo volumes released last month by the Virginia Port Authority appeared to reflect favorably on VIT’s performance. The port handled 168,430 TEUs — equivalent to a 20-foot container — in June, up 11.2 percent from June 2011.

In the first half of 2012, the port handled 994,727 TEUs — 5.4 percent more than during the same period last year.

The figures were “good and obviously positive,” Connaughton said, but “we have not reached the levels we were in 2006.”

According to authority figures, however, 167,510 TEUs were moved in June 2006, actually about 1,000 TEUs less than in June 2012.

Continuing the trend, throughput of 180,384 TEUs were recorded for July, up more than 7 percent on July 2011 and almost 12 percent on 2006.

“The issue is, we have seen six years without the port having any significant growth, and we have obviously been investing lots of money in infrastructure and support for the port, and what we are demanding is better performance,” Connaughton said.

He said the state has to decide whether to instigate “major reform” with VIT by negotiating a new service agreement, or go with privatization.

According to Connaughton, the authority board would vote on a recommendation of business terms by the end of November, “then spend the next month ironing out the agreement to implement those business terms,” which it would put to the vote early next year.

“We do not believe the status quo is sustainable short or long term,” he said. “It’s either major reforms with VIT … or go with” a different operator.