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Virginia port deal could net billions
2009/3/13
A Chicago-area developer is preparing to submit a formal offer this week to purchase the operating rights of the state-owned marine cargo terminals of the Virginia Port Authority, the Daily Press reported.
CenterPoint Properties, a real estate development firm based in Oak Brook, Ill, plans to submit the multibillion-dollar, multiyear offer to privatise port operations to Transportation Secretary Pierce Homer by week-end.
A deal to privatise the cargo terminals could net the state billions of dollars for a long-term lease, generating much-needed cash to plug a gaping hole in the state budget and to fund road projects and other infrastructure improvements. But a pact of this magnitude would likely be the subject of fierce debate and take several months, if not years, to gain approval.
Officials from CenterPoint, which is mostly owned by the California Public Employees'' Retirement System (CalPERS), were in Hampton Roads last week to brief several key maritime officials on the company''s intention to submit a bid for the operating rights of marine cargo terminals in Newport News, Norfolk and Portsmouth, and an inland port in Front Royal.
By purchasing the operating rights to the port, CenterPoint would essentially take the place of Virginia International Terminals, the port authority''s operating arm. Under this type of agreement, the company would lease the land from the state and keep the profits generated by running the day-to-day operations of loading and unloading cargo from container ships at the marine terminals.
Because the offer has yet to be submitted, the terms remain unclear, though many in the industry say such a deal could fetch several billions of dollars and stretch for decades.
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2009/3/13