NORFOLK, Va. — Virginia will consider whether to turn over the operation of its port terminals to a private company following an unsolicited proposal to do so that is valued at nearly $4 billion, state officials said Wednesday.
The state Department of Transportation issued a request for alternative proposals following an unsolicited one by APM Terminals Inc., a division of global shipping company Maersk.
The Port of Virginia is currently the third-largest port on the East Coast, but state officials have been frustrated that it hasn’t rebounded from the recession as quickly as its competitors in New York and Savannah have.
The APM Terminals proposal calls for a 48-year agreement to operate state ports in the Hampton Roads region, as well as the Virginia Inland Port in Warren County. The proposal is valued between $3.2 billion and $3.9 billion.
In addition to monthly payments, APM Terminals would fund capital improvements at the terminals and transfer ownership of its Portsmouth facility to the state.
Local governments also would receive property taxes and other revenue that it can’t currently receive from the existing facilities, which are exempt.
“This proposed transaction follows the standard landlord-tenant model which is in place in more than 80% of the world’s ports, and is presented at an opportune time as port authorities around the country aggressively pursue new business,” the proposal says.
The submission deadline for alternative proposals is July 12.
The idea of port privatization came up in South Carolina about five years ago, while Gov. Mark Sanford was in office.
The Charleston-based government agency that oversees the ports said Thursday it has no plans to follow Virginia’s lead.
“Our ... model as an operating port has served the state and our customer base well over the years,” State Ports Authority spokeswoman Allison Skipper said in a statement.
“The Port of Charleston is consistently named one of the most productive ports in the nation,” she continued. “The port’s mission, ultimately, is to exist for the public good and to be an economic driver for the state of South Carolina. The South Carolina Ports Authority is unique in that we operate financially self-sufficiently in terms of our inside-the-fenceline projects like new terminals and equipment.
“Managing our terminals and investing back into our public infrastructure allows us to better fulfill that mission.”
David Slade of The Post and Courier contributed to this report.