The decision follows an intensive 18 month review of port operations, including the evaluation of two private proposals to assume operations of the port – which it has now discounted.
VPA’s board said that it discounted the unsolicited proposals for the long term concession of operations at the port from APM Terminals, Inc. and Virginia Port Partners (VPP) because “neither proposal accurately reflected the potential net present value of the state’s terminals and revenue potential.”
It determined that the retention and improvement of the public sector operator is a more attractive opportunity for the Commonwealth of Virginia because it would provide more net cash flow and achieve comparable revenues and cargo volumes to the private operators.
It also pointed out that because cargo volumes at Virginia are beginning to show improvement following several years of slow growth, it is not considered beneficial to implement a concession at this time.
William Fralin, chairman of the VPA board, said: “We are transforming The Port of Virginia to meet a changing and increasingly competitive environment. We will move forward as a stronger, leaner organisation that is better-positioned to serve the ocean carriers and port customers, attract cargo to Virginia and be more accountable to Virginia taxpayers.”
To this end, the board has also taken the decision to convert VIT from a non-stock corporation to a single member Virginia limited liability corporation under more direct control of the VPA eliminating duplications, increasing efficiency and reducing costs.
VPA will also overhaul its strategic plan to determine ways to ensure the port remains competitive over the long-term, focusing on advancing major capital improvements, reducing debt levels and attracting new distribution centres and manufacturers to help drive increased cargo and economic development across the Commonwealth of Virginia.
