Global port operator APM Terminals has proposed running most of the state’s port facilities under a long-term deal with the Virginia Port Authority.
Under an unsolicited proposal announced Wednesday, APM Terminals also would transfer ownership of its Portsmouth terminal to the state, pay concession fees, make additional capital investments and provide a share of the operations’ revenue to the VPA.
APM Terminals said the offer could be worth $3.2 billion to $3.9 billion to the state over the proposed deal’s 48-year life.
The Port of Richmond, which the VPA leases, is not included in APM Terminals’ proposal.
“Our proposal provides for world-class port operations and the lowest-cost, best long-term solution for the commonwealth’s goal to make Hampton Roads the premier port facility now and in the future,” Eric Sisco, APM Terminals’ Americas Region president, said in a statement.
Because of the unsolicited offer, the state is required to seek possible alternative proposals, which must be submitted by July 12. APM Terminals made the bid to run the VPA’s facilities in April, but the state announced it Wednesday.
With 24,000 employees in 64 countries, APM Terminals runs a port, terminal and inland services network that includes interests in 63 ports and terminals, and 155 inland services operations, according to the Netherlands-based company, a division of the A.P. Moller-Maersk Group.
The company owns the APM Terminals in Portsmouth and began leasing the facility in 2010 to the VPA for $40 million a year for 20 years.
VPA owns and operates, through its Virginia International Terminals Inc. division, four general cargo terminals: Norfolk International Terminals, Portsmouth Marine Terminal, Newport News Marine Terminal and the Virginia Inland Port in Warren County.
The authority also leases the Port of Richmond. APM Terminals said it was open to the possibility of operating the Port of Richmond if the state thought it would be beneficial. It is owned by the city, which leases it to the VPA, and the local port has a third-party operator already in place.
“When APMT decided 11 years ago to build its terminal here, it sent a message to the rest of the world about the Port of Virginia. Now it is seeking a long-term concession and we’re flattered by this interest,” VPA Board Chairman Michael J. Quillen said in a statement.
While APM Terminals is “arguably the world’s leading terminal operator,” Quillen said, “We have supreme confidence in VIT (Virginia International Terminals), our current operating entity, but we have an obligation to evaluate all options.”
Gov. Bob McDonnell has long advocated privatization as a key component of funding the state’s transportation needs, but he has been wary of privatizing the port in Hampton Roads, a vital deep-water harbor.
Virginia Transportation Secretary Sean T. Connaughton noted APM Terminals’ proposal was unsolicited and that “no decisions have been made one way or another as to whether to actually lease the terminals.”
“Regardless of the outcome of the (Public-Private Transportation Act) process, state ownership of its marine terminal assets is not in question,” said Jerry A. Bridges, the VPA’s executive director.
During his 2009 campaign for governor, McDonnell’s roads plan called for increased use of public-private partnerships.
However, in December 2009 — after three private companies had bid to buy the port facilities and lease them back to the state — McDonnell appeared to throw cold water on the proposed privatization.
The port is such a valuable asset that companies would have to offer “an intensely compelling financial offer” for the state to sell it, McDonnell said then. He said the port’s future value must be factored into any decision.
In July, McDonnell overhauled the VPA board, supplanting 10 of the 11 members. Connaughton said at the time that the governor was frustrated with the level of growth at the port.
