As first reported in the JULY / AUGUST edition of Maritime Logistics Professional magazine, Gulftainer through its subsidiary GT USA, Wilmington had inked a tentative deal with the State of Delaware which would grant GT USA, Wilmington exclusive rights to operate and develop the Port of Wilmington, on the Delaware River downstream from Philadelphia for the next 50 years. That deal is now official.
Privately-owned Gulftainer today operates the Canaveral Cargo Terminal in the Port of Canaveral, Florida. Wilmington Port, which started operations in 1923 as the first major port on the Delaware River, is the top North American port for imports of fresh fruit especially bananas into the US, and has the one of the largest dockside cold storage facility in the country.
In October of 2016 DSPC purchased the Edgemoor site and in February 2017 retained Seabury PFRA to market a public/private (P3) project and PFM Financial to be an independent reviewer of the respondents to the March 2017 request for qualifications. The RFQ’s key criteria included direct and indirect jobs, return on investment, relationship(s) with existing clients and port labor, especially union stevedores, and credit worthiness.
A total of 92 RFQ’s were sent, 21 parties signed required confidentiality agreements and 10 submissions were received by the May 31, 2017closing date for submission.
Staff and Seabury in supporting roles developed a scorecard to evaluate proposals including, job creation, construction and operations, return on investment, capital investment projects, compensation to DSPC/State, continuation of existing clients and labor, cargo customers / union labor and office staff, quality of business plan, capital resources, creditworthiness and scope.
In the evaluation process 10 submissions were narrowed to six that were deemed fully responsive. In October 2017 the list was cut to three and then two joined forces, leaving two for final evaluation. In early December 2017, the final review was held by the committee. And in Mid-December the committee met with the lead respondent who scored 4.4 out of five on the evaluation, a full point higher than its rival, and authorized the Board Chair to sign non-binding, exclusive Letter of Intent with GT USA, Wilmington.
GT USA, Wilmington was formed under Delaware laws, as a 100% subsidiary of Gulftainer Company Limited UAE. Important in the selection were the company’s claims that it was established for over 40 years, it is the world’s largest private and independent terminal operator and that an affiliate, GT USA, operates Canaveral Cargo Terminal at Port Canaveral, Florida.
Of equal importance was the acceptance of a 50-year lease in which DSPC continues to own the real property and GT USA Wilmington is expected to operate terminals to handle containers, break-bulk, bulk (dry and liquid), roll-on/roll-off but with no liquefied natural gas terminal.
The capital investment commitment is considerable. In the first 10 years GT USA Wilmington (GT) is committed to spend about $584 million. That involves $73 million to upgrade Port Wilmington; $411 million to build the Edgemoor terminal and $100 million for warehousing. A minimum capital investment guarantee for Wilmington is $100 million with $40 million in the first 2 years and an additional $20 million in warehousing in first 3 years.
At Edgemoor, GT is required to invest $250 million starting 12/31/2020 and have the greenfield container terminal operational by December 31 2023 – extended by 2 years if container cargo volume is less than 600,000 TEUs. In addition GT is responsible for Edgemoor Delaware River dredging at a cost of about $42 million.
Based on cargo volumes and periodic adjustments for inflation payments of approximately DSPC is to collect $6 million in year one in fees rising to approximately $13 million by year 10 with no continuing financial support from DSPC and or the State of Delaware for operating and capital expenditures.
Separately, the International Longshore Association is assured Wilmington Port with be an ILA-exclusive facility. Use of existing unionized labor workforce will be in accord with applicable collective bargaining agreements while it agrees to offer employment to all other DSPC employees at substantially similar compensation for not less than six months.
Sharjah was not Dubai or Dubai Ports World, or even close when, on December 13, 2013 the private company owned by Crescent Enterprises was renamed Gulftainer and rededicated with a new “vision and identity” that “aims for 35 (container) terminals by 2020 across five continents handling 18 million TEUs annually, (and) becoming a Top Six Global Container Terminal Operator,” according to a company statement. Today, the firm appears to be well on its way to achieving that lofty goal.
MLPro's Rick Eyerdam contributed this story. He first broke this story more than two months ago in an exclusive article in our JULY/AUGUST print edition. See that article by clicking HERE.
