The Maryland Port Administration (MPA) has inked a 50-year agreement with Ports America Chesapeake that will allow the MPA to lease its 200-acre Seagirt Marine Terminal to Ports America. In return, Ports America has agreed to construct a 50-foot berth for the Port of Baltimore that is expected to result in increased business opportunities and larger vessels that will be able to dock at the Port.
The partnership between the MPA and Ports America is expected to produce 5,700 new jobs, while the total investment and revenue from this agreement to the State of Maryland has the potential to reach more than $1.3 billion over the life of the agreement and will generate $15.7 million per year in new taxes for Maryland. The agreement must be submitted to the Board of Public Works for approval.
"This public-private partnership is about three things: jobs, jobs, and more jobs," says Gov. Martin O'Malley. "These challenging economic times call for new ways of doing business. We welcome an internationally respected partner in the maritime field for this unique long-term joint venture. With this agreement, we are able to secure the Port's long-term future with a 50-foot berth, apply an immediate influx of capital for system preservation of roads, tunnels, and bridges, and provide an extended revenue stream to the State."
Once the agreement is finalized, Ports America will be responsible for the daily operations of the Seagirt Marine Terminal, as well as investing in a new 50-foot berth, cranes, and other infrastructure at Seagirt. Ports America will make an annual payment and provide ongoing revenues to the MPA during the life of the agreement. The State of Maryland would continue to own Seagirt.
Of the 5,700 new jobs that will result from this agreement, 3,000 jobs will be one-time construction jobs over the next three years for Port and Maryland Transportation Authority (MdTA) highway improvements. Another 2,700 permanent direct, indirect and induced jobs will come from the increased and sustainable container business that the Port will see upon completion of the 50-foot berth in 2014.
Under the agreement, the MdTA, as the current owner of Seagirt, will receive an immediate payment in excess of $100 million to pay for needed system preservation of its roads, tunnel, and bridge facilities. It also is projected that this agreement will generate $15.7 million per year in new taxes for the State.
Ports America is the current operator of the Seagirt Marine Terminal and has operated the facility since Seagirt opened in 1990. Ports America has also run operations at the Dundalk Marine Terminal since 1996.
In addition to full control over daily operations of Seagirt and the obligation to design and build the 50-foot berth within MPA's required standards, Ports America receives:
- A known future base payment for 50 years and all net revenues;
- The right to move and consolidate all current container business to Seagirt;
- Control over timing and nature of system preservation costs as long as standards are met;
- Funding capital obligations allow Ports America to invest in new technology as it sees fit.
With the development of a 50-foot berth, the Port of Baltimore will become only the second port on the East Coast with a 50-foot berth and 50-foot channel. When the Panama Canal expansion project is completed in 2014, it is expected that a greater and larger number of ships will travel to East Coast ports to reach their customers quicker and less expensively than their current route of going to West Coast ports and sending products by rail to markets throughout the country. Without a 50-foot berth, those larger ships would not have enough water depth to dock and bring additional business to the Port of Baltimore. The cost to develop the 50-foot berth and four cranes is approximately $105.5 million.
Source: Maryland Port Administration
Writer: Walaika Haskins