Virginia last Friday scuttled a potential public-private partnership for the Port of Virginia, ending the chance for a private company to operate the port.
Transportation Secretary Sean Connaughton said three bids from companies to operate the port were dismissed because they undervalued the port. During the worst of the recession in 2009, cargo flow through the port was down, he said. Since the bids were placed, activity has revived.
“The bids, therefore, are not considered reflective of the value of the terminals,” Connaughton said in a statement.
Additionally, the Virginia Port Authority signed a lease agreement in July to assume operation of the Portsmouth terminal from APM Terminals, a Dutch-based container terminal operating company. This has increased the value of the overall port system, Connaughton said.
The Port Authority currently owns and operates four cargo facilities on behalf of the state. Virginia International Terminals Inc., a nonprofit that was set up by the VPA in 1981, operates the state-owned marine terminals, including Norfolk International Terminals, Portsmouth Marine Terminal, Newport News Marine Terminal, and the Virginia Inland Port.
In March 2009, CenterPoint Properties, a for-profit Oak Brook, Ill.-based company, made an unsolicited bid to operate the four facilities under a lease from the state.
The VPA subsequently received two other bids: one from the Carlyle Group, a Washington, D.C.,-based private-equity firm, and a joint bid from Seattle-based Carrix Inc. and Goldman, Sachs & Co.
In May, Gov. Robert McDonnell released an audit report that analyzed the state’s Public-Private Transportation Act of 1995. The audit was conducted to give state officials advice on reducing the hurdles to attracting private funds for public projects.
Connaughton left open the possibility for public-private partnerships “in the future,” he said.