Press digest

2012 May 28

M-E firm dangles $250m carrot before Jaxport

Middle Eastern private port operator Gulftainer has presented Jacksonville Port Authority, operator of US East Coast port Jaxport, with a US$250 million proposal to double cargo shipments at the port and create potentially thousands of jobs.

Gulftainer said it may go to another East Coast port if the port doesn't act soon, reported Jacksonville Business Journal.

Gulftainer proposed building a private port container terminal on Blount Island. Gulftainer proposed being a partner with the port authority and working behind the scenes to improve efficiency and increase volume. The company wants to lease about 100 acres on Blount Island and it would invest up to $250 million in a container terminal, including construction, equipment and harbour deepening costs, with no outside financial help.

Gulftainer also has commitments from the world's top steamship companies to move one million TEUs through Jacksonville's port in addition to what all other tenants move within five years of starting operations in Jacksonville, said Peter Richards,
Gulftainer Group managing director.

Gulftainer said it would also help with expenses to deepen the river channel to 47 feet.

"We add value," Richards said. "We become an asset to the port authority."

But Jacksonville Port Authority CEO Paul Anderson said the port has received similar offers and is putting together a strategic plan that will help it decide what is the right path for the port.

Reginald Gaffney, chairman of the port authority's board of directors, said management would vet all the proposals and make recommendations to the board.

Anderson said the Gulftainer presentation "pales in comparison" to some of the other proposals the port authority has received. Many companies want to invest in Jacksonville's port, Anderson said, naming The Carlyle Group and William Blair & Company -investment and asset management firms — as examples.

"But they [Gulftainer] wanted us to turn over the port to them, and we're not going to do that," Anderson said.

Richards said he was surprised Anderson saw his proposal in that way.

Gulftainer is unlike other port operation companies that want to come in and take control, Richards said. It prefers to be a silent partner, leaving the port authorities still in control and making the decisions.

Gulftainer Group, based in Sharjah, United Arab Emirates, has operated globally for more than 35 years and manages three ports in the UAE.

The company also has port, logistical and transportation ventures in cities across the globe, including Recife, Brazil; Umm Qasr, Iraq; and Ust-Luga, Russia. Gulftainer is looking to expand to two more ports in Brazil.

Richards said Blount Island is a more strategic location for a container terminal than Dames Point because the bridge restricts larger ships that can't pass underneath it. The majority of post-Panamax ships that carry 8,000 to 12,000 20-foot-equivalent-unit containers, are too big to pass, he said.

Anderson said, "If the port was built from scratch today, it might make more sense to have the container operations at Blount Island and vehicles on Dames Point, but that's in the past.''

"I'm not looking back," he said. "I'm looking forward."

Jacksonville is Gulftainer's first choice, but the company has received little from the port authority besides pleas for patience.

"Jacksonville is ideal for development because the infrastructure and connectivity is already there," Richards said. The area's highway system and rail hubs allows cargo to move quickly to several states in the southeast, and the port has a free trade zone.

Very soon, Richards said, the company will have to decide whether to move on to a second or third choice East Coast port."We're very keen to come to Jacksonville," Richards said.

Jacksonville reported handling 900,433 containers in fiscal year 2011, surpassing the 900,000 mark for the first time, according to its 2011 annual report