HD26 - Public-Private Partnerships Related to Seaports in Virginia


    Executive Summary:
    Joint Subcommittee Studying Public-Private Partnerships Related to Seaports in Virginia
    (HJR 72 (2008))

    During the 2008 Session of the General Assembly, the General Assembly passed HJR 72, which established a joint subcommittee to study public-private partnerships related to seaports in Virginia.

    Delegate Purkey, the patron of HJR 72, served as chairman of the joint subcommittee, and Senator Wagner served as vice-chairman of the joint subcommittee. Other legislative members of the joint subcommittee were Delegates Cosgrove, Massie, Melvin, and Joannou and Senators Lucas and Miller. Messrs. J. William Cofer, John G. Milliken, Arthur W. Moye Jr., Fred Whyte, Robert E. Martinez, Eric A. Sisco, Thomas W. Godfrey, Jr., Robert T. Taylor, and John D. Padgett, Esq. served as citizen members representing the port-oriented transportation business community.

    The joint subcommittee met four times during 2008 on August 26, September 24, October 22, and December 1.

    The General Assembly instructed the joint subcommittee to "examine different operating and financing mechanisms for addressing seaport development, including both public and private approaches to such efforts. Such work will include an examination of the current operating and management structure of the Commonwealth-owned port facilities."

    In addition, the General Assembly requested the joint subcommittee to "identify the total cost of future development of Virginia’s seaport including the refurbishment and enhancement of existing and planned future seaport facilities."

    Furthermore, the General Assembly charged the joint subcommittee with determining "the surface transportation impacts of the import and export of trade through Virginia’s seaports and the gaps in today’s surface transportation. Included within this determination shall be the impact of future development of the seaport."

    The General Assembly also directed the joint subcommittee to "recommend the priorities of addressing the related surface transportation needs throughout the Commonwealth by 2015, 2025, and 2035."

    Finally, the General Assembly required the joint subcommittee to "hold public hearings to solicit public comment on the work of the joint subcommittee."

    In furtherance of the resolution's aims, the joint subcommittee studied "public-private partnerships regarding seaports in Virginia." To that end, the joint subcommittee heard testimony on August 26, 2008, from Mr. Jerry A. Bridges, Executive Director of the Virginia Port Authority, and Mr. Joseph A. Dorto, President & CEO of Virginia International Terminals, Inc., who described the operations of Virginia's seaports. Additionally, Mr. Pierce R. Homer, Virginia Secretary of Transportation, delivered a presentation in which he discussed how the Port of Virginia could maintain its economic competitiveness. Also, Dr. Roy Pearson, Professor Emeritus at the Mason School of Business at the College of William & Mary, gave a presentation to the joint subcommittee that discussed how the Virginia Port Authority operations added value for Virginia businesses, governments, and households in fiscal year 2006. Further, Mr. Chick Rosemond, Vice-President of Sales & Marketing at Wyatt Transfer Inc. expressed to the joint subcommittee the concerns of truck drivers who are independent-operators and deliver cargo to/from the ports. Finally, David Mills, Senior Vice President and Corporate Secretary of "K" Line America, Inc. and Nobuo Ishida, Senior Vice President of "K" Line America, Inc., discussed "K" Line America, Inc.'s history, corporate principles, financial highlights, international operations, and decision to headquarter in Richmond, Virginia.

    On, September 24, 2008, the joint subcommittee heard testimony from Mr. Edward L. Brown, Sr., International Vice President of Port of Hampton Roads of the International Longshoremen's Association, Captain Patrick B. Trapp, Commander of Coast Guard Sector Hampton Roads for the United States Coast Guard, and Dr. Wayne K. Talley, Executive Director of the International Maritime Ports and Logistics Management Institute at Old Dominion University. Both Mr. Brown and Captain Trapp discussed the relationship between the seaports and interested constituencies. First, Mr. Brown discussed the longstanding history of longshoremen at the seaports and shared why he, as a longshoreman, prefers the current operations of the seaports to past operations. Second, Captain Trapp likewise discussed the Coast Guard's mission, duties, and regulations and how all three relate to Virginia's seaports. Dr. Talley, by contrast, explained the different types of seaports and the process of port privatization. Lastly, Messrs. Bridges and Dorto and Ms. Barbara Reese, Deputy Secretary, Office of the Secretary of Transportation, offered statements in response to the presentations made and the discussions that took place. In particular, Ms. Reese discussed the Public-Private Transportation Act with members of the joint subcommittee.

    On October 22, 2008, the joint subcommittee heard testimony from Mr. Michael R. McClellan,
    Vice President - Intermodal & Automotive Marketing of Norfolk Southern Corporation, Mr. Thomas J. Simmers, President and Chief Executive Officer of Ceres Terminals, Inc., and Messrs. Andy Hecker and Mike Crist, Project Manager and Vice President, respectively, of Moffatt & Nichol. Mr. McClellan spoke about Norfolk Southern Corporation's networks that serve seaports throughout the nation, generally, and Hampton Roads, specifically. He also testified that Norfolk Southern could not opine any recommendations as to the future structure of the Virginia Port Authority, but Norfolk Southern did think the joint subcommittee should take into consideration economics, development, and investment as criteria when "evaluating any change in the current structure of the container operations of the Virginia Port Authority." Mr. Simmers argued that privation of port operations, from an operating perspective, could result in increased profit margins, decreased costs, better utilized assets, more seamless service delivered, and likelier opportunities for government to use capital no longer dedicated for seaports operations for public projects unrelated to seaports operations. Finally, Messrs. Hecker and Crist discussed the 2040 Master Plan update for the Port of Virginia, stating that opportunities exist to grow demand of port use, maximize productivity gains, advance technology through operational efficiency and automation, and promote distribution of jobs, buildings, and cargo.

    On December 1, 2008, the joint subcommittee heard testimonies from Mr. Eric Sisco, President and CEO of APM Terminals Americas, and Mr. Bill Ralph, Senior Consultant and Economist for R.K. Johns & Associates. Mr. Sisco delivered a presentation to the joint subcommittee in which he discussed the portfolio, history, operations, and commitments of APM Terminals Americas. In his presentation that centered on port-related, public-private partnerships, Mr. Ralph discussed the attraction of private investors to the operations and ownership of seaports and the attraction of governing bodies of port authorities to public-private partnerships. Each joint subcommittee member commented on the past and future workings of the subcommittee; Messrs. Bridges and Dorto also delivered brief remarks to the joint subcommittee.

    No formal report embodying any legislative recommendations of the joint subcommittee will be submitted as a House Document to the 2009 Session. The joint subcommittee will meet, as authorized, in 2009 after the adjournment of the 2009 Session.

    The joint subcommittee's Internet website is http://dls.virginia.gov/ports.htm.