McConnell suggests privatizing the port
Citing steep cuts in the S.C. State Ports Authority’s container business, the top state senator suggested today that the authority consider privatizing a portion of its operations.
“I think the time has come to really look at this,” Senate President Pro Tem Glenn McConnell, R-Charleston, said after a meeting of Charleston County lawmakers charged with overseeing the SPA.
During the meeting, McConnell directed SPA executives to study the issue and report their findings to him. After the meeting, McConnell said he likely will call a public hearing on the topic sometime this year.
The senator’s comments came on the heels of an extensive discussion between the committee and SPA President and CEO Bernard Groseclose regarding the SPA’s loss of container business during the past few years.
Although the authority has not finalized figures from the fiscal year that ended June 30, Groseclose estimated that the authority handled 1.8 million 20-foot equivalent units, compared with 2.6 million TEUs in the 2006-2007 fiscal year. That represents a dip in container business of more than 30%.
The weak U.S. dollar is dragging down the demand for imports, Groseclose said, though he acknowledged that the business drop at the Port of Charleston has been more severe than at other ports.
Success at terminals in Savannah, Ga., and Norfolk, Va., is sucking business away from Charleston, he said.
Responding to McConnell’s privatization idea, Groseclose noted that the SPA and the Georgia Ports Authority work under the same model and that Georgia has been the fastest-growing port in the nation for the past two years.
The difference in Georgia, he said, is that, several years ago, the state dumped a significant amount of taxpayer money into the creation of distribution centers.
That makes it tough to compete, but “we’re anticipating this year an uptick in our business,” Groseclose said.
David Posek, chairman of the SPA’s board of directors, said he would comply with McConnell’s request to study various business models. The Jasper County port that calls for a joint operating model between South Carolina and Georgia also could include a private component, Posek said.
Further, Posek said South Carolina could regain its competitive edge with the swath of warehouse and distribution centers proposed by private investors such as Hillwood, Childress-Klein, Johnson Development, Lauth and Jafza International.
Noting that the Port of Charleston dominated the Port of Savannah from 1986 until recently, Rep. Chip Limehouse, R-Charleston, cautioned against panicking just yet.
“I’m not so worried that the sky is falling and we can’t recover our status to the extent we want to,” he said.
Also during the meeting, Groseclose said he will recommend to the board in September that it put on the market the 1,300-acre Daniel Island property that had been slated for the Global Gateway expansion.
posted by summer teal simpson
The Creative Coast Alliance
Charleston Regional Business Journal
August 7, 2008