Company official: Improving efficiencies, infrastructure key to port growth
- July 23, 2009
Investing in infrastructure and improving operation efficiencies are keys to future port growth, a company official proposing to buy the operating rights of the Port of Virginia said Thursday.
Neil P. Doyle, executive vice president of infrastructure and transportation development for CenterPoint Properties, said that means good rail is vital for growth as highways become more congested and companies look for more “green” methods of transportation.
It would cost an estimated $5 trillion to build the U.S. highways needed to bring traffic congestion to 1980 levels, Doyle told members of the Hampton Roads Association for Commercial Real Estate at a luncheon Thursday.
“There’s a lot of room left on the rail,” Doyle said.
Doyle said improving efficiencies is as important as ever as there’s no guarantee U.S. ports will see the same double-digit growth in container traffic after the recession that it has in recent years.
“The question is not when do we bottom out, but what the growth rate is when we hit reset,” Doyle said.
Oak Brook, Ill.-based CenterPoint submitted an unsolicited proposal in March to buy the operating rights of the Port of Virginia for 60 years. The project is valued at $3.5 billion in today’s dollars, but would translate to $8.9 billion throughout the life of the proposal.
Under the plan, Virginia International Terminals, the port’s current operator, would become a subsidiary of CenterPoint. The company would keep existing staff. The Virginia Port Authority would continue to have oversight at the port, and the state would receive an initial $500 million cash payment and receive annual payments and profit sharing.
The Virginia Department of Transportation is accepting competing bids until Monday. SSA Marine, a Seattle-based marine terminal operation, is expected to submit a competing proposal, according to the Daily Press.
CenterPoint already has a vested interest in Virginia’s port and rail volume success. It is currently building a $350 million logistics and railyard center in Suffolk.
Doyle said Virginia’s advantages include its naturally deep harbor, a history of good planning by the Virginia Port Authority and Virginia International Terminals, support of the local maritime community, access to rail and plans to develop Craney Island.
In fact, Doyle said Virginia could be prepared to take much of the future growth in container traffic on the East Coast. Charleston has poor rail access, Savannah is hampered by the fact that it’s a river port, and New York serves its immediate metropolitan area, Doyle said. Other ports serve niche needs, he added.
“That leaves Virginia as taking everything else all the way to the Mississippi and beyond,” Doyle said.