Port authority approves lease of APM terminal

The board of the Virginia Port Authority unanimously approved a 20-year lease of APM Terminals' state-of-the-art container facility in Portsmout, ending three years of competition and putting all of the port's major terminals under one flag, the Virginian-Pilot reported.

"This is in my estimation a grand slam home run for all the parties involved," said Jerry Bridges, executive director of the Port Authority. "This is one of the biggest transactions in the history of the port of Virginia."

Eric Sisco, president of APM Terminals Americas, said he has been authorised by APM's corporate board to sign the lease. He anticipates the formal signing to occur June 30 or July 1.

The Port Authority is scheduled to take control on July 6.

Opened in September 2007, APM's Portsmouth facility cost roughly US$500 million to build and is considered one of the most technologically advanced marine terminals in the Americas.

Valued at $865 million in today's dollars, the base rent alone in the lease could end up costing the authority more than $1.1 billion, after adjustments for inflation, over the life of the deal.

The Port Authority will pay APM Terminals about $40 million a year. By the end of the lease in 2030, base-rent payments, compounded by the inflation factor, could increase to more than $70 million a year.

APM also will receive a bonus payment for container volumes of 500,000 or more a year. It will get $35 for every container between 500,000 and 650,000, and $26 for every container exceeding 650,000, according to the lease agreement.

The APM terminal has a capacity of about 825,000 containers a year.
(source:www.cargonewsasia.com)