The board of the Port Authority of New York and New Jersey Tuesday approved a restructured lease with the Port Newark Container Terminal that will provide $500 million in private capital investment to upgrade the existing facility.
The restructured PNCT lease calls for a 20-year extension of the existing lease through the year 2050 in order to expand the terminal through a $500 million private capital investment and secure a long-term strategic commitment with Mediterranean Shipping Co.
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The lease provides guarantees from both PNCT and MSC that will dramatically increase cargo volumes at the terminal, from 414,000 containers today to 1.1 million by 2030. In addition, the lease would expand the terminal’s facility by more than 100 acres, from 180 acres to approximately 287 acres.
PNCT is owned by AIG Global Highstar, an infrastructure fund that acquired the terminal in 2007 from DP World as part of its purchase of the global port assets of P&O Ports.
DP World was forced to sell off those U.S. port assets after the purchase was blocked by Congress, responding to nativist fears of their being owned and operated by a Dubai-based company.
The restructured lease will create nearly 800 new jobs – including 350 construction jobs -- and will generate 1,450 overall jobs over the term of the lease.
PNCT has been a terminal operator at the port since 2000 and currently operates on a 180-acre terminal facility under a lease that expires in November 2030.
Today’s action by the port authority’s board provides a 20-year extension that would run through November 2050, subject to PNCT’s investment of $500 million during that period.
As part of the agreement, the port agency will enter into an agreement with MSC. In that agreement, the shipping line is to increase its cargo container volumes annually through November 2030.