A proposal by Gulftainer Group to invest $580 million in dramatically expanding and operating the state-owned container port at Wilmington, Delaware, moved a step forward Thursday with the approval from a key committee in the Delaware Legislature.
The legislature’s 12-member Capital Improvement Committee voted unanimously to back the plan for the Delaware River terminal, which now needs approval from the state Senate and House of Representatives to go ahead. No date for the votes has yet been set, but for the project to move swiftly they would need to take place before the legislative session ends in June.
United Arab Emirates-based Gulftainer Group, which operates 13 terminals around the world and has operated the Port of Canaveral, Florida, for nearly four years, expects to expand the existing terminal at Wilmington from 375,000 TEU to 600,000 TEU. The proposal also commits the group to spending $410 million to build a second terminal nearby with a capacity of about 600,000 TEU, with construction expected to begin in 2022.
Gulftainer reached a preliminary agreement on April 6 with the Diamond State Port Corp. for a 50-year lease on the port, which would be operated by Gulftainer’s subsidiary, GT USA.
Several days later US Rep. Duncan D. Hunter, R-California, asked President Donald Trump to block Gulftainer from receiving an operating concession until the federal government had reviewed the proposal, citing “national security concerns, including the proximity to critical assets and the necessity to ensure incoming shipments are properly screened and inspected.” The request is still pending.
Hunter’s questioning of the Wilmington deal evokes comparisons with a controversy that his father, then-US Rep. Duncan L. Hunter, contributed to in 2006. The senior Hunter was among critics of Dubai-based DP World’s agreement to acquire operating concessions at several US ports as part of a purchase of UK-based P&O Ports. After controversy fanned by talk radio and cable television, DP World eventually agreed to strip out P&O Ports’ US assets, which were acquired by what now is Ports America.
The expansion would put Wilmington in an intense, local competition for container business with the Port of Philadelphia, which is 30 miles up the Delaware River and currently undergoing a $300 million renovation and expansion, including an extensive investment in the container terminal.
Both ports at present are strong in the refrigerated cargo sector. Wilmington is ranked second and Philadelphia third in the East Coast refrigerated container market, with the Port of New York and New Jersey ranked first. But the proposed expansion of Wilmington comes after years of it losing market share as Philadelphia has added share.