Posted on April 3, 2018
By Amy Cherry, WDEL
An Arab company is poised to take over operations at the Port of Wilmington in a deal that the governor said would protect thousands of middle-class jobs and create new ones.
Gulftainer Group seeks to lease the Port of Wilmington from the state for a term of 50 years. In exchange, they plan to construct a new container shipping facility on the Delaware River at the site for the former DuPont Edgemoor plant which state officials said would increase cargo volume, according to an announcement from the governor’s office Thursday, March 29, 2018.
The agreement calls for Gulftainer to pay the state $13 million in royalties annually. In exchange, the Gulftainer would invest $580 million in port operations; a new container facility at the former DuPont site in Edgemoor would account for $410 million of that investment.
We’ve come to a point in time where international trade is going to be moving around the world in containers and if the Port of Wilmington is going to be able to continue to operate to employ all of those folks and be viable in the new world of container transport, we’re going to have to have a new container terminal,” said Carney in an interview with WDEL.
But the state can’t do it alone–they need the significant capital investment that Gulftainer can provide.
“The state of Delaware doesn’t have the financial capacity to invest a half-billion dollars to construct a new container terminal, so we absolutely need a private partner to do that. Gulftainer provides just that opportunity with incredible expertise in the new world of port management,” said Carney.
Building a new shipping container would require dredging, and with that comes environmental concerns.
“I understand…the Edgemoor facility is a good facility with respect to the need to dredge the channel and create a channel off to the Edgemoor terminal,” said Carney.
While mindful of dredging concerns, the economic benefits could outweigh environmental consequences.
“We want to restore the port as an important national cargo gateway, doubling cargoes, doubling revenue to the state, investing hundreds of millions of dollars and adding thousands of workers over the next decade. We see only upside in the U.S. and the Port of Wilmington is poised to become one of the biggest success stories in the US ports and logistics sector,” said Gulftainer CEO Peter Richards.
New Castle County Executive Matthew Meyer called the proposal “big” for the county and the state.
“There are thousands of Delawareans seeking employment. The leading global port operator has chosen New Castle County to develop its largest American operations and provide blue collar tech training for thousands,” he said. “We will work tirelessly to see that this partnership works for the benefit of all communities in New Castle County.”
Under the deal, Gulftainer would not getting tax breaks, Carney said, but there were certainly incentives to the deal.
“The agreement requires them to make significant capital investments in the existing port facility and the new facility at Edgemoor; they would, obviously, have access to to the revenue from the customers that they currently have,” Carney said. “They plan to add to those customers and increase the tonnage that’s coming across the terminal both in the existing port and in Edgemoor for them to support the capital investments they’re making and the jobs today and in the future.”
Gulftainer currently operates 15 ports in several countries. Carney said he expected critics to bring up potential national security concerns that could accompany a foreign company’s role in port operations.
“We expect that there will be questions to that effect. Gulftainer operate a port currently in Florida…that port is right next to a United States nuclear submarine base; they’ve received federal approval for their investments in the U.S., and they’ve committed to go through that process again, so we have a significant comfort level that the questions that people may raise we’ll be able to answer satisfactorily,” said the governor.
The deal requires approval from both the Diamond State Port Corporation (DSPSC) and the state legislature. Without those approvals, the deal would die, and Carney cautioned the long term viability of the port would become questionable.
The DSPSC is scheduled to vote on the proposal Friday, April 6, at the Chase Center on the Riverfront.
“Delaware has a unique opportunity to partner with an operator that can transition our port into a significant economic driver for the state,” said Secretary of State Jeff Bullock, Chairman of the Diamond State Port Corporation in a written statement. “A proposal like this does not come along very often, and Delaware should take advantage of it.”
“If we don’t take advantage of this opportunity, we run the risk of losing the thousands of jobs that are there at the Port of Wilmington,” Carney said.
Source: WDEL
