The Virginia Port Authority’s board of commissioners will decide at their March 26 board meeting whether to pursue one of the two unsolicited bids to buy the leases of the VPA’s container terminals and operate them, or to reorganize the structure of the current port authority and its terminal-operating subsidiary, Virginia International Terminals.
The two private terminal operators that are bidding on the VPA terminals are APM Terminals, which has made a bid it estimates at between $3 billion and $4 billion over the 20-year term of the lease, and Virginia Port Partners, a joint venture between J. P. Morgan IIF Acquisitions and Maher Terminals, which would operate the port, along with an affiliate partner, Noatum, a company that operates other ports throughout the world.
The bids to privatize the operating port’s container terminal terminals have been under consideration for almost two years, ever since APM Terminals made its unsolicited bid for them in May of 2012. The current VPA commissioners, who have all been appointed since the summer of 2011, have been very slow to decide whether to proceed with privatization and have repeatedly asked for more details on the bids.
Virginia Port Partners entered the bidding in December 2012, when Deutsche Bank’s RREEF infrastructure fund dropped out of the bidding. The VPP proposal includes an up-front $400 million concession fee to Virginia, which would be paid in April.
If the board decides not to pursue the privatization bids, it is planning to reorganize the VPA structure to centralize its management and bring the VIT’s terminal operations more closely under its control. The terminals are now operated by VIT, which is in theory a subsidiary of VPA but is not overseen by it.