Virginia Port Authority’s board approves historic lease with APM Terminals
- June 24, 2010
The governing authority of Virginia’s ports approved one of the biggest and most significant transactions in its history Thursday by authorizing the agency’s director to sign a lease with APM Terminals for use of its cutting-edge facility in Portsmouth.
The board of commissioners of the Virginia Port Authority voted unanimously in favor of a 20-year lease, valued at $865 million, that positions the authority to take control of the terminal in early July. Under the agreement, VPA will lease and manage all aspects of the APM marine terminal, a move that unifies container cargo operations in Hampton Roads.
Calling it the most important day for the port since unification of the state’s marine terminals back in 1982, VPA Executive Director Jerry Bridges said, “All the major cargo operations in the harbor are going to be operated by the VPA, and this creates an unparalleled set of opportunities for us. We can now market ourselves as one port with diversified cargo handling capabilities … This is a tangible and significant opportunity for the commonwealth.”
According to the VPA, the lease agreement and accompanying documents will be signed on June 30 by Bridges and APM Terminals Americas President Eric A. Sisco. The official handover will take place on July 6.
Built in 2007 at a cost of about $500 million, the technologically advanced terminal is one of the newest and largest in the country. It will give Virginia’s ports an additional capacity of 1 million TEUs (20-foot equivalent units) a year, ending competition between the port and APM.
The deal, following 18 months of negotiations, coincides with other strategic cargo-driven transportation projects. They include expansion of the Panama Canal, scheduled for completion in 2014, and the opening of Norfolk Southern’s Heartland Corridor double-stack rail link to the Midwest this September. “All these things are lining up nicely to maximize the facility,” said port spokesman Joe Harris.
Throw in 50-foot shipping channels, room to expand at Portsmouth’s Craney Island and access to two of the East’s premiere railroads, Norfolk Southern and CSX, and Bridges said Virginia enjoys an “incredible set of long-term competitive advantages” that make it unique among East Coast ports.
The deal also increases the overall value of the VPA’s assets. This boost could affect private bids for the operating rights of Virginia’s ports. Three private companies submitted bids last year to run the ports’ terminals for 20 years and speculation is that the bids would need to be resubmitted and updated to reflect the new lease arrangement.