The Port of Virginia has again received an unsolicited bid to privatize port operations.
APM Terminals has proposed operating most of the marine and in-land terminals owned and leased by the Port of Virginia under a 48-year agreement.
Under the proposal, valued at between $3.2 billion and $3.9 billion, APM Terminals would operate Norfolk International Terminals, Newport News Marine Terminal, Portsmouth Marine Terminal, the Virginia Inland Port in Front Royal and the APM Terminals marine terminal in Portsmouth — which is currently being operated by the Port of Virginia under a 20-year lease agreement.
The proposal comes less than two years after APM Terminals and the Port of Virginia reached an agreement for the Virginia Port Authority to lease APM’s $540 million marine terminal in Portsmouth, which is the most technologically advanced terminal in the Americas.
Under APM Terminals’ proposal, the ownership of APM Terminals’ Portsmouth terminal would transfer to the commonwealth.
The commonwealth would receive upfront concession payments and monthly payments based on operating revenues. APM Terminals would be responsible for capital improvements at the marine terminals, including the second phase of its Portsmouth Terminal.
The proposal states APM Terminals would also be interested in discussing lease of the Port of Richmond, which is currently under a five-year lease agreement with the City of Richmond.
The proposal was submitted under Virginia’s Public-Private Transportation Act. In response, the commonwealth has issued a Request for Alternative Proposals, allowing private entities to submit alternative proposals through July 12.
“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 in the future,” Eric Sisco, APM Terminals Americas Region President, said in a statement.
Virginia Port Authority officials said Wednesday that port operations will continue as normal while the state evaluates the proposal and any alternative proposals.
“No other port on the East Coast is garnering this kind of attention from arguably the world’s leading terminal operator,” Mike Quillen, chairman of the authority’s board of commissioners, said in a statement. “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…We have supreme confidence in [Virginia International Terminals], but we have an obligation to evaluation all options.”
Virginia previously received an unsolicited bid to privatize port operations from CenterPoint Properties Trust in 2009. The state received two additional proposals, one from Washington, D.C.-based private equity giant The Carlyle and another from a partnership between Goldman Sachs and Carrix Inc. The state decided to drop the bids for two primary reasons: they were submitted during an economic downturn and because of the port’s 20-year lease of APM Terminals.
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