APM Terminals has submitted an unsolicited proposal to Virginia Port Authority to operate the authority''s state owned and leased terminals for the next 48 years in a deal that could net VPA up to $4bn, according to APMT''s calculations.
The operator has offered to take responsibility for all Port of Virginia facilities including the Hampton Roads terminal and related inland locations. This is a strategic move to optimise cargo flow and it will also enable APMT to expand and compete more efficiently.
The proposal has been submitted under the guidelines of the Virginia Public-Private Transportation Act (PPTA) 1995 and will undergo a detailed review in the coming months.
The Virginia Port Authority (VPA) confirmed the submittal of the “unsolicited conceptual proposal” today. It has stressed though that operations at all of VPA’s terminals will continue as usual whilst the evaluation takes place and that the state owned Virginia International Terminals Inc. (VIT) will continue to manage operations in the meantime.
APMT’s Virginia terminal is the largest private container terminal in North America. Less than two years ago, VIT took over operations of the terminal in a strategic move to tackle the economic downturn – an unusual situation because usually operators lease property from the authority, not the other way around.
If the new proposal is approved, it will be roles reversed and back to a typical port landlord model – APM will owe lease monies to the port authority instead of the company receiving the 'rent' each month.
The total value of the deal to the port authority is worth between US$3 and $4bn over the term of the partnership, according to APMT.
The outcome of the bid is expected in a few months. Reports in the media say that back in 2009, three proposals were received from groups seeking similar long term concessions – but it was decided back then that this type of move wasn't in the best interests of the Commonwealth or the port authority.
