NORTH AMERICA

U.S. Port Infrastructure- Return of PPP

18 years ago

While considerable buzz surrounds potential infrastructure investment by the US Federal Government, a record-sized privatisation transaction may be in the offing, perhaps part of a broader resurgence of public-private-partnerships in the US for facilities already in operation.

Port Strategy: Virgina's ports are the subject of an unsolicited privatisation bid

In the latest announcement, Center Point Properties, a Chicago-based real estate developer with a specialty in distribution centers and warehousing, has lobbed an unsolicited bid into the State of Virginia, proposing a privatisation of the Port of Virginia. The Port of Virginia (part of state agency, Virginia Port Authority) owns and operates Norfolk International Terminals, Portsmouth Marine Terminal, Newport News Marine Terminal, and the Virginia Inland Port.

The offer, which must now be evaluated in short order by the state before it advances to its next steps, is reportedly worth $8.9bn, for a 60 year concession.

Significantly, the Virginia bid was announced several weeks after a PPP deal was announced at the Port of Oakland. In that deal, Ports America will invest $60m at the outset (part of $150m to be invested in port improvements including new cargo cranes).

At end 2009, Ports America will take over the operation of facilities presently operated by APM Terminals. Over the 50 year concession period, the transaction is valued at $686m.