Tuesday, March 01, 2011

Galveston to be Containerized?

This article caught our attention,  as our warehouse is only about 45 minutes from the Port of Galveston, and this could be of interest to many of our customers.
Breakbulk Staff   Tue, 02/22/2011 - 15:35
Breakbulk Online - News Story

Breakbulk port may accept new investors, add boxes to mix

The Port of Galveston, Texas, could be adding containers to its mix of breakbulk, project, bulk and cruise business if a proposed partnership between Hutchison Port Holdings and The Carlyle Group comes to fruition.

The possibility was announced earlier this month when the port’s governing Wharves Board asked port staff to negotiate an agreement for a 75-year master lease with the partnership.

Hutchison wants to bring containers to Galveston, which has been concentrating on breakbulk, ro-ro and project cargo, including high volumes of wind turbine components. The port has gone after container business in the past but the attempt sagged in the face of nearby Houston’s massive operations. The port auctioned off its rusting container cranes several years ago and dedicated the contianer terminal to ro-ro and other breakbulk cargoes.

The new agreement is likely to add containers to the present mix rather than be a major shift, according to Capt. John G. Peterlin III, senior director of marketing and administration for the Port of Galveston.

As outlined, the Hutchison deal would include a new 100-acre container terminal on the west end of Galveston Island, a 20-acre terminal for ro-ro cargo such as farm and industrial vehicles on the east end, and possibly a second container terminal on nearby Pelican.

Galveston’s Wharves Board of Trustees last April hired the Bank of Montreal to look for private investors for the port. Of 80 firms solicited, only the Hutchison-Carlyle joint venture, formed expressly to bid on the Galveston project, was found acceptable by BMO. Hutchison Port Holdings operates more than 50 ports worldwide and handles between 10 and 15 percent of the global container market. The Carlyle Group is a private equity firm based in Washington, D.C.

If an agreement is reached the Port would recieve an approximately US$60 million debt pay off, a share of revenue and profits from cruise and freight business, cash for capital improvements over a 10-year period, and other cash payments. A master lease proposal could be brought before the Wharves Board by this summer, according to local news outlets.