Maersk terminal reportedly set for Va.

Private site's capacity a half-million containers

March 19, 2004|By Peter Dujardin | Peter Dujardin,DAILY PRESS

PORTSMOUTH, Va. - The parent of the Maersk Sealand steamship line has signed off on a deal worth up to $400 million to build a privately owned marine terminal in Portsmouth, a local official with knowledge of the deal said yesterday.

The move, expected to increase by nearly a third the capacity of the port of Hampton Roads to handle container cargo, is to be announced the week of April 19.

The Maersk terminal, which will have more than 3,500 feet of berthing area and nearly 300 acres of terminal space, will have the ability to handle more than 500,000 additional container units a year at the port. The three state-owned port terminals moved a total of 1.65 million containers last year.

A.P. Moller-Maersk A/S, the parent company based in Copenhagen, Denmark, approved the private development, which will be about the size of the Portsmouth Marine Terminal, the second-largest container site owned by the state of Virginia. The deal is expected to make Hampton Roads the largest East Coast traffic center for Maersk, one of the world's largest shipping lines.

The Portsmouth development is likely to spur thousands of jobs in the region, and continue the trend toward distribution centers sprouting up in Suffolk, Va., and elsewhere throughout the region. Maersk carries many of the shipping containers for Wal-Mart Stores Inc., the world's largest retailer, which already has a major distribution center in James City County.

Local maritime officials have long said they would support the Maersk expansion. Joe Dorto, president of Virginia International Terminals, which operates Norfolk International Terminals, Portsmouth Marine Terminals and Norfolk Marine Terminals, has said any Maersk growth would help alleviate impending capacity problems at the state terminals.

The port facilities, including improvements under way, can move a maximum of about 1.8 million containers a year, only 150,000 a year more than the ports moved last year.

"They're coming at the perfect time," Dorto said. "They'll be a competitor to the state-owned terminals, but it's capacity we need."

Over the long term, the Virginia Port Authority, which oversees Virginia International Terminals, wants even more capacity than the Maersk site will bring. It's pressing to get the permits to convert Craney Island, a man-made site built up with dredged sand, into a fourth state-owned terminal to double the port's ability to handle containers.

J.J. Keever, head of the Hampton Roads Maritime Association, said a Maersk expansion would bring "tremendous additional capacity for the port."

The deal began taking shape in late 2001, when APM Terminals Inc., a division of A.P. Moller-Maersk and a sister company of Maersk Sealand, bought 576 acres along the Elizabeth River in Portsmouth for $8.2 million. That land, south of Craney Island, was on one of the last pieces of undeveloped land in Portsmouth. The property formerly was owned by Cox Enterprises Inc., the Atlanta-based owner of local cable provider Cox Communications.

Since that purchase, APM Terminals has been working to get state and federal environmental permits and working with state officials on highway and rail access. It also has been securing financing deals and assessing the extent of the world economic slowdown.

Maersk officials interviewed about the new terminal in the past few years had expressed caution that the deal to build in Portsmouth was not final. But that has changed in recent weeks, sources said, with the company giving the green light to move ahead.

Maersk Inc. North America, the company's U.S. division in Madison, N.J., did not return phone calls seeking comment. A Portsmouth city official said he was unaware of the deal.

The Daily Press of Newport News, Va., is a Tribune Publishing newspaper.

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