Va. terminal privatization could be on hold
Virginia Gov. Bob McConnell's administration could shelve a plan to privatize three container terminals at the Port of Virginia, according to a story last week in the Newport News-based Daily Press.
CenterPoint Properties, a real estate industrial trust that specializes in logistics facilities, last year made an unsolicited offer to enter into a long-term agreement with the Virginia Port Authority, which subsequently accepted competing bids from private investment fund Carlyle Group and a partnership between Carrix Inc. and Goldman Sachs.
The deals would grant an operator the right to run the state’s three container terminals and an inland intermodal hub for profit, in exchange for upfront and annual payments to the state worth hundreds of millions of dollars.
'We could decide to terminate the whole process if we determine that the timing of the proposals and their scope is not one we are prepared to move forward on,” Sean Connaughton, the state's transportation secretary and former U.S. Maritime Administrator, told the newspaper. “The governor has been quite clear ' that any potential deal has to be extremely advantageous for him to even consider it.'
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There is concern in the Virgina government about whether the proposals came during a depressed market and provide insufficient funds for the state, according to the paper.
VPA's three terminals and a fourth — developed by APM Terminals — have struggled to fill their docks since a downturn in container demand started wracking U.S. ports. APM Terminals, a subsidiary of the A.P. Moller – Maersk Group, and VPA are in talks about leasing its terminal in Portsmouth back to the port authority, the terminal operator said.
Also last week, the VPA received clearance from the Virginia Department of Environmental Quality for its Craney Island expansion, a $2.2 billion project that would turn a huge plot of reclaimed industrial land into a new container terminal. The permit from the state environmental agency gives the VPA and the U.S. Army Corps of Engineers clearance to begin construction on the project.
No work is expected until the later part of the decade because the economic downturn has left the port with plenty of capacity and constrained financing opportunities. ' Eric Johnson