O'malley Announces Port Upgrade

Huge Public-private Deal Gets Bentley's Backing

November 21, 2009|By Michael Dresser | Michael Dresser,michael.dresser@baltsun.com

A deal in which a private contractor will invest hundreds of millions of dollars into the Helen Delich Bentley Port of Baltimore in return for a 50-year lease of Seagirt Marine Terminal received a strong endorsement Friday from the person who might be the most important arbiter of all:

Helen Delich Bentley.

The former congresswoman and "godmother" of the port was among those who gathered at Seagirt as Gov. Martin O'Malley announced a deal that would upgrade the terminal so that it can unload the super-sized containerships that are expected to become a growing sector of maritime commerce after a widened Panama Canal opens in 2014.

"It's a great deal," said Bentley, 85, a maritime industry consultant who added that she saw no downside to the contract. "It's a push forward for us. It comes at a very important time, a very critical time."

Bentley's assessment was echoed by national experts in the maritime trade, who called it a significant enhancement of Baltimore's ability to compete with other East Coast ports.

"It's a major event in the maritime industry. It's really kind of game-changing," said Aaron Ellis, communications director for the American Association of Port Authorities.

Under the deal, a local affiliate of the Ports America Group would invest an estimated $105 million to build a 50-foot-deep berth at Seagirt and equip it with four state-of-the-art cranes so the terminal can serve the mega-ships that are expected to bring cargoes from Asia through the canal and directly to the East Coast. In addition, Ports America is expected to invest up to $500 million in capital projects at the port over the 50-year term of the agreement.

The state, lacking the money to build such a facility itself, had spent the past year and a half looking for a private partner to make the capital investment it could not.

A jubilant O'Malley, backed by a lineup of longshoremen in blazingly colorful safety jackets, promoted the deal as a potent boost to Maryland's employment market.

"Jobs, jobs, jobs. This deal is all about job creation in Maryland and job creation now," he said. Over the next 50 years, he said, the deal is expected to yield $1.3 billion in economic activity at the port.

According to state officials, the agreement is expected to directly create 5,700 new jobs in Maryland, including 2,700 permanent jobs at the port and another 1,000 to build the expanded berth. Those jobs are unlikely to materialize immediately because the permanent jobs will likely be created after the berth's planned opening in 2014. Ports America officials estimated that construction would begin in 2011 or 2012.

Closer to "now" may be the 2,000 jobs expected to be created in the short term as the Maryland Transportation Authority uses the estimated $100 million it will receive to buy out its ownership of the terminal to accelerate maintenance at state toll facilities.

James J. White, executive director of the Baltimore port, pointed to the huge blue cranes hovering over the Seagirt pier and said he doesn't have "the first dollar" to replace them without private capital. White said the cranes are 20 years old and have an expected working life of 25 to 30 years. He said the current cranes can only reach over 17 containers and that the new generation of ships that will traverse the wider canal will be stacked 20 containers across.

White said the port currently handles the equivalent of 450,000 20-foot containers a year on its docks. With the Ports America deal, he said, that number could grow to 1.5 million over the next 20 years.

After a news conference that attracted many leaders of business in the port, O'Malley hinted that future public-private partnerships could follow the port deal. He said Maryland had been approached many times with offers involving state-owned infrastructure but had turned them down.

"None of them was good for the public," he said. "This one's good for the public."

A spokesman for the port's No. 1 competitor, Joe Harris of the Virginia Port Authority, said Baltimore had found an impressive partner in Ports America.

"It's not a bunch of neophytes. They've had a lot of experience in this and they've been successful," he said.

Harris said the VPA-operated Port of Hampton Roads is already equipped with the berths and cranes needed to handle the larger ships. But he said Baltimore and the Virginia port could have a significant edge over other East Coast ports that don't have the 50-foot-deep channels the next generation of ships will require.

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