WASHINGTON — Private firms have until July 12 to submit bids to operate the Port of Virginia as part of a public-private partnership, an opportunity created by the Virginia Department of Transportation after it received an unsolicited P3 proposal.
The commonwealth received and accepted a conceptual proposal from APM Terminals Inc., said Virginia Secretary of Transportation Sean Connaughton.
The more than $3 billion proposal, submitted in April, asks VDOT to enter into a 48-year concession for APMT to operate Port of Virginia facilities in Norfolk, Portsmouth, Newport News and Richmond.
Under the plan, APMT would pay the Virginia Port Authority a to-be-determined amount upfront to help the port cover its financial obligations, including debt service on more than $400 million of commonwealth port fund bonds and revenue bonds.
The company would pay the state a fixed monthly amount as well as a variable sum according to a revenue-sharing formula. Virginia would also take over ownership of APMT’s private Portsmouth facility.
Such an arrangement would be similar to the one under which Maryland’s Seagirt Marine Terminal operates, and is authorized under Virginia’s 1995 P3-enabling legislation.
The company also provided a proposal for a shorter 38-year agreement, with an option to add 10 more years, “in recognition of the commonwealth’s desire to see the impact of the overall proposal.”
The VPA currently leases APMT’s facility in Portsmouth — the largest privately-owned terminal in North America, and the Port of Richmond.
The Port of Virginia is among only a handful of U.S. ports positioned to accommodate the new generation of larger “post-panamax” cargo ships enabled by the widening of the Panama Canal.
APMT would take on the responsibility of maintaining and upgrading port facilities.
“APM Terminals will increase the competitiveness of the Port of Virginia during a time when the landscape in the industry is rapidly changing,” APMT Americas president Eric Sisco wrote to Connaughton.
“Once the alternative proposals, if any, are received, the commonwealth will determine whether or not to advance one or more or none of the proposals,” VDOT said in a statement. “The commonwealth is under no obligation to accept any alternative proposals or enter into any agreements related to APMT’s unsolicited conceptual proposal or any alternative proposal.”
Ryan Pedraza, a program manager in VDOT’s office of transportation public-private partnerships, said the state has not yet received any proposals besides the one provided by APMT. Pedraza said the proposal “merited further attention,” but he wasn’t sure if further bids would be forthcoming.
“It’s hard to say,” he said. “We have put the call out to the private sector.”
APMT is a part of the A.P. Moller-Maersk Group, a global organization with operations in 130 countries and 2011 revenues surpassing $60 billion, according to the proposal.
VDOT will notify bidders whether their proposals have been accepted or rejected by July 30, Pedraza said.