Portland ICTSI partnership to put US privatisations back on the table

Commissioners at the Port of Portland (Oregon) are today set to vote on a deal that marks a possible revival of port privatisations in the US.

The transaction, where International Container Terminal Services, Inc. (ICTSI) would enter into a 25-year lease on the port's Terminal 6 (a combination container/ breakbulk facility), is significant because a competitive bidding process for a 50-year concession had actually been shelved in late 2008.

According to port documents, ICTSI approached Portland in early 2009 about a more traditional landlord/lease deal. The terminal handled 210,000 teu between July 2008 and June 2009, plus 533,000 tonnes of steel products.

Under the proposed terms, a closing payment of $8m is due, followed by annual rentals of $4.5m (ratcheted upward with increases in the Consumer Price Index). For annual throughputs above 250,000 teu, an incremental assessment ranging between $10/teu to $20/teu kicks in. Five years into the deal, an intermodal assessment, tagged at $8/container lift, begins.

The port will retain title to the terminal and the nine gantry cranes.

Port Strategy understands that the deal contains an exclusivity provision; ICTSI cannot play a role in other US West Coast container terminals without Portland's approval.

On the flipside, Portland cannot construct or operate a competing terminal for 15 years, or until yearly volumes hit 700,000 teu.

Source: Port Strategy