Tuesday, September 18, 2012

Virginia port stakeholders worried about rush to privatization

The Port Authority of Virginia is considering proposals this fall from private companies that want to take over the operation of its ports. The move is drawing criticism from the maritime industry, a legislative panel and others who have concerns that the process was moving forward without stakeholder input and serious consideration of the issues involved.

More tensions were stirred when Transportation Secretary Sean Connaughton failed to attend Monday's House Appropriations Committee meeting, where discussions centered on the privatization of the ports.

Connaughton, who is a key figure in the privatization effort, had a scheduling conflict, according to the chair of the committee, Del. Lacey Putney. The packed meeting proceeded without him.

"Before the commonwealth considers privatization, any specific problems at the port should be formally identified and recommendations should be made as to why privatization is the appropriate solution to those specific problems," testified Arthur Moye Jr., executive vice president of the Virginia Maritime Association.

At a public meeting last month, Gov, Bob McDonnell asserted the ports were badly in need of an overhaul and had been losing money.

In May, APM Terminals submitted an unsolicited proposal to operate Virginia Port Authority facilities, offering about $4 billion for a 48-year deal. Three other bidders have submitted proposals since then - including Virginia International Terminals, which currently runs the state ports.

A decision is expected by the end of the year, although its possible none of the proposals will be chosen. Several stakeholders, including cargo carriers, have expressed concerns about the change in operators.

At the meeting, House Majority Leader Kirk Cox called for a presentation from VIT officials to examine the port financials and judge how the current operator is doing. Moye said the company returns its net to the state.

Other officials were worried about provisions in APM's proposal in particular and how it would affect them.

For more of the Virginia Pilot story: hamptonroads.com

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