| Rendell |
On Friday, Gov. Edward G. Rendell said the state will move forward and spend $25 million on preconstruction activities related to the so-called Southport Marine Terminal.
But his office said, “The competitive bid process has been temporarily suspended to allow capital and financial market conditions to improve.”
Kate Philips, a consultant working for the state, said that Rendell was committed to “seeing the process through” by the end of his term in January 2011, but that the decision was made to suspend the bidding process when initial development proposals from qualified teams, received on May 15 after a months-long competitive process, were “non-compliant.'
The state did not detail how the bids were non-compliant, but said they “reflected the detrimental impact of the global recession and international credit crisis on the shipping lines, terminal operators, and infrastructure investors that make up the bidding teams.”
Philadelphia Regional Port Authority (PRPA) Board Chairman John H. Estey and Executive Director James T. McDermott issued a joint statement thanking Rendell for the $25 million investment while acknowledging “the sharp effects of the economic downturn. In the first quarter of 2009, world trade volumes plummeted by double-digit percentages and ocean carriers grappled with some of the lowest container rates on record, leaving the maritime industry in a challenging position.”
'We want Southport to be a resounding success for the selected bidder and also for the citizens of Pennsylvania and the Delaware Valley region,' Rendell said. 'Giving the financial markets time to recover will lead to stronger proposals and a better return to the commonwealth. By investing state capital dollars, we will increase the attractiveness of the project to a broader spectrum of investors and we believe those capital dollars will be recouped when the competitive bid process resumes.'
Phillips said groups that bid on the process would be allowed to resubmit bids in the future and that other firms would be invited to submit offers.
She did not say if all four consortia that have been identified as prequalifying for the project had submitted bids.
Those four groups are:
' Hamburg S'd North America and Holt Southport Development Corp. Holt is a local stevedoring company.
' Delaware River Stevedores, another local stevedore, and its 50-50 owners, Ports America and Carrix, parent of Stevedoring Services of America.
' MOL and its TraPac terminal affiliate.
' Philippine-based International Container Terminal Services.
' DBM Fonds, a subsidiary of ABN AMRO.
The state has said the successful team will receive a 30- to 50-year concession to develop and operate the Southport facility in exchange for the right to collect revenue from shipping lines and other users.
Despite the current economic downturn, Rendell’s office said long-term projections for the maritime shipping industry remain positive. Capacity constraints at existing ports, combined with the Panama Canal expansion and shifting trade routes, will create demand for new terminals such as Southport on the East Coast, the state said.
Rendell said the $25 million will be used for a variety of pre-construction activities on the site, which tentatively include design work, permitting, site preparation and utility infrastructure.
'As the largest infrastructure project in the state offering the potential for creating thousands of new family-sustaining jobs, the Southport Marine Terminal remains a top priority for my administration and the leadership of the Philadelphia Regional Port Authority,' Rendell said.
Estey and McDermott predicted “with pre-construction work underway and necessary permitting moving forward, we expect final bidding on the Southport Marine Terminal to be more robust that originally expected, which will enable the Commonwealth to recoup its investment.”
