The Philadelphia Regional Port Authority authorized a 50-year lease on Wednesday to be made final with the Delaware River Stevedores and Hyundai Merchant Marine to develop the new Southport container terminal on the Delaware River.
Delaware River Stevedores is a joint venture between Carrix and Ports America, the two largest independent terminal operating companies in the United States.
Construction of the terminal will not begin for three years because the developers want to make sure the 104.5-mile deepening of the Delaware River navigation channel that began March 1 off Delaware is completed as far as Philadelphia.
The successful bidding group won the contract to develop the long-planned terminal from the short list of only two bidders, which also included SMT Development Partners, principally comprised of the Spanish-based Obrascon Huarte Lain, with support by worldwide port engineering firm CH2M Hill.
The details of the winning bid emerged a day after representatives for the successful bidders, the state, and the port authority met all day Tuesday to negotiate terms, according to The Philadelphia Inquirer.
During the three-year "pre-construction period," the winning group will develop the final project design and a plan to finance it. The bidders will spend $2 million in "pre-construction rent" to the PRPA, which is the landlord of what will eventually become a 120-acre terminal.
The plan calls for the first ship berth to have three gantry cargo cranes and a 70-acre container yard, and be completed between March 2016 and March 2017.
A second ship berth would have three additional gantry cranes and an additional 20 acres of yard, and be finished between March 2017 and March 2019.
During the third construction phase, an additional 30-acre container yard would be built and ready between March 2019 and March 2020.
The construction cost for two ship berths was estimated at $250 million by the developers.
The rent amount will be decided by the 30th month of the pre-construction period, under the terms. The rent to the port authority would include a "fixed-rate" portion based on a land appraisal, with a 7.5 percent rate of return, and a "variable rate" based on the amount of cargo moving through.
Under the lease, expected to be signed Nov. 1, the PRPA, a state agency, will be responsible for permits and demolition of abandoned housing at the Navy Yard, as well as environmental permits and possible construction of an access road to the site.
Pennsylvania Gov. Ed Rendell has pledged up to $25 million for site preparation.
-- Contact Peter T. Leach at email@example.com.