A super port is worth cost in Md.'s view

State seems ready to pay or do anything to win ship complex

Negotiations are secret

Maersk and Sea-Land could make port 2nd to N.Y. on East Coast


January 24, 1999|By Robert Little | Robert Little,SUN STAFF

As Maryland officials await word on a deal that could transform Baltimore into the second-largest container port on the East Coast, all of them agree: The payoff in jobs and economic stimulation is worth the price.

And yet only a handful of them know what that price is likely to be, and they won't discuss it.

"Hundreds of millions of dollars" is the closest anyone has come to estimating Maryland's price tag if it lures Maersk Inc. and Sea-Land Service Inc. to a hub terminal for container cargo in Baltimore. And that came from a source close to the negotiations who would not allow his name to be used.

Former U.S. Rep. Helen Delitch Bentley, now a consultant to the port, once described the price tag as "big bucks," and compared it to the cost of building a football stadium. The Ravens stadium cost about $280 million.

State officials who know how much Maryland is offering in taxpayer's money to build a mega port won't reveal the cost because negotiations with the two companies are continuing.

The secrecy is not only common, it is protected by law. Such negotiations are specifically exempt from the state's public disclosure statute.

But the result is that one of the state's largest economic development projects in history is being negotiated behind closed doors, and one of the largest spending commitments in years could be arranged without public knowledge.

The General Assembly would likely have to approve financing for the deal -- but not until the companies and the Maryland Port Administration have worked out the details.

"We're in a very strong competition right now, and we can't be negotiating this deal through the media," said state Transportation Secretary John D. Porcari. "This is the biggest opportunity of a generation for the port of Baltimore, and we're going after it very aggressively."

The economic benefits of the Maersk/Sea-Land deal could be significant: 2,000 direct jobs, by some estimates, not counting jobs associated with construction. The state's negotiators won't discuss those figures, either.

But government and port leaders say the deal, which could triple Baltimore's container cargo business, is one that is worth the investment -- even before the costs and benefits are publicly known.

"This is a major economic entity that would be a real feather in the state's cap, and I think the legislature would be willing to provide for it," said Del. Howard P. Rawlings, the Baltimore Democrat who chairs the House Appropriations Committee.

"I think when the information is very clear about the job creation possibilities and the economic development opportunity, people will see the benefit."

Even Rawlings said last week that he did not know how much the deal would cost.

"Of course, it has to meet the test of being reasonable," he said.

Maersk and Sea-Land are expected to announce within the next few weeks which port will be its East Coast base of operations. Signs suggest Baltimore's chance of prevailing has improved.

The companies narrowed their search to three cities in December, but a Sea-Land official says one of the finalists -- Halifax, Nova Scotia -- is no longer a candidate for all the business.

And Baltimore's other competitor, the port of New York and New Jersey, is reportedly sticking to its demand for lease payments that Maersk and Sea-Land have said are too high.

The Longshoremen's unions in New York and New Jersey also have not offered favorable work rules that would reduce the companies' costs.

In Baltimore, meanwhile, labor has agreed to eliminate extra pay for working in the rain and to work later hours that could make a terminal here more efficient. And the amount of money the state is willing to spend, coupled with the comparatively low payment it is asking in return, have made Baltimore a viable option.

"The numbers work in Baltimore," said James Devine, Sea-Land's general manager of northeast operations. "We're not looking there because we like crabs; we want to be profitable. And besides, it's nice to be wanted."

Competing cities have not discussed their potential costs either, but most have offered more hints than Baltimore.

In Quonset Point, R.I., a rejected bidder, officials had proposed building Maersk and Sea-Land a terminal from scratch. Developers estimated the cost at $600 million to $800 million.

The port of New York and New Jersey released a study last week calling for $1.7 billion over the next 10 years to improve its shipping terminals, and as much as $7 billion over the next 40 years. Renovations to the New Jersey piers, where Maersk and Sea-Land operate now, are estimated at $1.5 billion over 10 years, though the companies could be moved to another port authority terminal.

In Halifax, officials say that two years of construction would cost about $431 million Canadian, or roughly $283 million. They would not reveal the project's overall cost.

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