Virginia drops private bids for port operations
- September 10, 2010
Virginia is dropping three unsolicited bids from companies seeking to privatize port operations.
Virginia Secretary of Transportation Sean Connaughton said the state decided to end the privatization process for two reasons: the bids were submitted during an economic downturn and the port has since begun a 20-year lease APM Terminals’ new Portsmouth facility.
“It will take time for [APM Terminals] to be completely integrated into [Virginia Port Authority’s] operations as well as determine its long-term impacts on the VPA, its plans and finances,” Connaughton said in a statement. “None of the bids could take into consideration this enhancement of the VPA portfolio of assets.”
The process started in March 2009 when CenterPoint Properties Trust of Chicago submitted an unsolicited, $3.5 billion bid under the state’s Pubilc-Private Transportation Act. Under the plan, CenterPoint would have leased the port for 60 years.
Washington, D.C.-based private equity giant The Carlyle and a partnership between Goldman Sachs and Carrix Inc. followed suit, submitting their own competing bids.
A review of the proposals was delayed as the VPA began discussions with APM Terminals to lease their Portsmouth terminal.
The state is not ruling out port privatization in the future. The news release stated that in the next year, Virginia will evaluate the VPA and Virginia International Terminals to determine the advantages of privatizing all or part of the port’s operations.
“You don’t garner these types of offers by having the reputation of being an average, second-tier facility,” VPA Executive Director Jerry Bridges said. “These companies conducted their due diligence and realized the collective assets of this port are unrivaled on the East Coast.