Gov. McDonnell says decision is in the best interests of the Port of Virginia and the Commonwealth
Virginia Governor Bob McDonnell has accepted the decision by the Virginia Port Authority (VPA) board of commissioners to scrap its evaluation of the Public-Private Transportation Act (PPTA) proposals submitted by both APM Terminals, Inc. and Virginia Port Partners, and allow Virginia International Terminals Inc. (VIT) to continue in its role as port operator.
In a statement, Gov. McDonnell said that he accepted the board’s decision as it was in the “best interests of the Port of Virginia and the Commonwealth”.
Last year, APM Terminals made a bid of between US$3 and £4 billion to takeover all of the VPA-operated terminals for a 48-year period, while New Jersey-based terminal operator and JPMorgan-led group Virginia Port Partners valued its offer at $3.1 billion. The VPA also requested that VIT, responsible for the day to day running of its facilities for more than three decades, submit its own bid to continue operating the port.
Following an extensive review process, the VPA opted last month to select a restricted and improved VIT with a new management structure in place as its preferred option.
However, Gov. McDonnell warned that in the short-term the restructuring of the current operational arrangement between the VPA and Virginia International Terminals, Inc must be a priority if Virginia is to realise its potential as one of the only East Coast ports capable of handling post-Panamax vessels.
“Given these challenges, my acceptance of the board’s decision is conditioned upon the implementation of certain recommendations made by the board,” said Gov. McDonnell.
“First, the board must immediately commence a global search for a permanent management team.”
“Second, the VPA must promptly follow through on plans to implement the corporate restructuring of the VPA/VIT relationship.”
“Third, as part of this restructuring, the board's outside auditors must conduct a comprehensive review of VIT prior to the VPA assuming all liability for port operations.”
“Finally, the board must provide a detailed plan for meeting the cargo volume, revenue and cost-reduction targets that served as the foundation for its decision.”
The Virginia Governor has sent a detailed letter to VPA Chairman William Fralin outlining his analysis of the board’s actions.