Ceres Terminals and Ports America have qualified to submit offers for a possible long-term lease to operate Baltimore’s Seagirt Marine Terminal and make improvements that would include a fourth berth with a 50-foot water draft.
The Maryland Port Administration said last fall it was seeking bidders for a public-private partnership at Seagirt, the Port of Baltimore’s main container terminal. The terminal now has three berths with 45-foot water depth and the original design provided for the addition of a fourth.
The port wants a berth with 50-foot draft to accommodate larger ships that will be able to transit the Panama Canal after its expansion in 2014. The port already has a 50-foot channel extending up the Chesapeake Bay to within 200 feet of Seagirt, and MPA Executive Director Jim White said the deeper channel to the fourth berth would require minimal dredging – “probably less than 150,000 cubic yards” of material.
Now that Ceres and Ports America have qualified as bidders, the next step will be for the companies to sign confidentiality agreements, and the MPA will provide each group with a request for offers that specifies terms, conditions and other financial responsibilities of the lease.
The MPA said negotiations will follow and that if an agreement can be reached, the MPA will recommend it to the Maryland Port Commission and Board of Public Works by year end. The MPA said it reserves the right to terminate the process if it decides an agreement isn’t in the state’s best interest.
Under the proposed public-private partnership, the 200-acre terminal would be leased to a private entity for at least 30 years. The lessee would invest in a new berth, cranes and other infrastructure, and would pay an annual rent. The state would continue to own the terminal.
The MPA said any deal would provide the private partner with incentives to increase cargo volume, with the port administration sharing in increased revenue above a threshold volume to be negotiated. The terminal now handles about 500,000 TEUs a year, White said.
The MPA said the offers also will include a payment to the MPA and Maryland Transportation Authority for existing terminal and waterside investments at Seagirt, which opened in 1990. The private partner also would be awarded the business currently under contract to the MPA/Maryland Terminals Inc.
The MPA has retained Public Financial Management, a financial advisory firm, to assist with the public-private partnership process.
Ceres, with parent NYK Line, operates 32 terminals around the world. The company provides stevedoring services at Seagirt and has had a presence in Baltimore for more than 30 years. Ports America is the largest terminal operator in North America, handling nearly 13 million TEUs at 15 container terminals, and has operated Seagirt since the terminal opened.
White said both companies have strong financial backing. Ceres will have access to funding from Alinda Capital Partners, a large U.S. infrastructure fund with $5.8 billion in capital commitments, and Ports America from its owner, Highstar Capital Fund, a $3.5 billion private equity fund.
Contact Joseph Bonney at email@example.com.