Gulftainer will invest up to $600M at the Port of Wilmington, Delaware, including a new 1.2M TEU container terminal.
A ceremony was held this week to sign an agreement between the State of Delaware, the Diamond State Port Corporation (DSPC), and GT USA Wilmington, LLC, to build a new container terminal at DuPont’s former Edgemoor site on the Delaware river. Diamond State Port Corporation acquired the site in 2016 and started the process of looking for a terminal operator to develop a container terminal.
That the port selected GT USA, a fully owned subsidiary Gulftainer UAE, raised some eyebrows among those that recalled how the US had previously blocked the sale of P&O Ports US assets to DP World on national security grounds. After it was turned away in the US, DP World turned its attentions to Canada, where it now operates five terminals at four locations, two of which (Prince Rupert and Vancouver) handle a significanct number of US import containers. That experience appears to have changed some perceptions, earlier this year the US Committee on Foreign Investment in the United States (CFIUS) found that the Gulftainer deal in Delaware is “not a covered transaction,” and no further review was required.
The move is a significant step for GT USA, adding Delaware, which sits between Baltimore and Philadelphia, to its existing terminal at Port Canaveral as it builds a US portfolio. As part of the agreement GCT is prohibited from investing in any other terminals from Virginia to New York, unless Delaware is at capacity and an agreement is reached with DSPC. In return the DSPC agrees not to develop any other container terminals in Delaware. GT USA is also purchasing the rights to an option the DSCPC has on another property at Pigeon Point for future growth.
The concession agreement is for 50 years, and requires GT USA to invest around US$600M. Most of this will be spent on dredging and building a new terminal at Edgemoore with a capacity of around 1.2M TEU, to be operational by 2023. The agreement also covers spending $73M on the existing Wilmington site and another $100m upgrading warehousing and adding cold stores. The terminal is targeting fruit and produce from Chile as a major cargo.
GT USA has a target to increase Wilmington’s existing container business from 375,000 TEU to 780,000 TEU within 10 years, and the agreement includes payments based on a guaranteed 75% increase in container volume and 50% increase in non-containersised cargo in the first 10 years.
For Delaware Governor John Carney the agreement is all about leveraging private investment to turn a state-owned asset that requires an annual investment of around $15M in public funds into an economic growth generator that produces jobs and revenue for the state. Concession fees are expected to be $5M in year one rising to $13M in year 10, and the project is expected to generate 5,600 direct and indirect jobs.
“This historic agreement will result in significant new investment in the Port of Wilmington, which has long been one of Delaware’s most important industrial job centres,” said Governor Carney. “For decades, jobs at the Port have helped stabilize Delaware families and the communities where they live. I was proud to help make our partnership with Gulftainer official today, and I want to thank members of the General Assembly, the Diamond State Port Corporation, Gulftainer, the International Longshoremen’s Association, and all of our partners who have helped make this agreement a reality.”
“We are proud to be making this long-term commitment to the State of Delaware, its community and its economy,” said Badr Jafar, Chairman of Gulftainer’s Executive Board. “This landmark agreement builds on Gulftainer’s 43-year track record of delivering excellence and dependability in ports and logistics operations around the world, and will create thousands of new jobs, enhanced links and sustainable value for Wilmington and the State. We are confident that this public-private partnership will propel the Port of Wilmington towards becoming the principal gateway of the Eastern Seaboard.”
The ILA, which recently announced a new Master Contract that prohibits full terminal automation, welcomed Gulftainer to Delaware. “This is a great day for the State of Delaware,” said William Ashe, President of International Longshoremen’s Association Local 1694. “We’re strengthening the Port and local job creation. I was very happy to be a part of this celebration and agreement signing today.”