Executives sign off on APM Terminals-VPA deal

Top port executives signed documents earlier in the week that finalised a 20-year lease of APM Terminals' state-of-the art container facility in Portsmouth to the Virginia Port Authority (VPA), the Virginian-Pilot reported.

"The agreement has been signed and executed, so we're done," said Jerry Bridges, the Port Authority's executive director.

The signing of the papers made the nearly 300-page agreement released last week official. The culmination of months of intensive negotiations, the deal puts all of the major marine terminals in the port of Hampton Roads under one flag.

The base rent for the facility is valued at US$865 million in today's dollars but could end up costing the authority more than $1.1 billion, after adjustments for inflation.

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 more than 500,000 a year.

Port officials do not expect to have any trouble paying the rent based on revenue from shipments currently moving through APM combined with the container traffic that will be transferred from Portsmouth Marine Terminal.

APM Terminals' current traffic generates about $25 million a year on a volume of roughly 230,000 containers – a little over a quarter of its capacity.
(Source:www.cargonewsasia.com)