Let’s call this part The Secret of the Ooze. Sunday’s NJ provides a front page followup to the Kinder Morgan aftermath. If you’ve been following this story, there’s a few questions that are unanswered and the News Journal DOES NOT ask them, either.
Let’s start with Speaker Pete noting that the Port Director wants $156M over 10 years to keep the facilities in some competitive position:
House Speaker Peter Schwartzkopf said it will be a stretch for the state to even come up with the $156 million Port Director Gene Bailey says is needed over the next 10 years just to keep the current facilities up to par.
“I think the state of Delaware just shot themselves in the foot,” Schwartzkopf said Friday.
DSPC wanted an expansion to happen:
The port corporation sought bids for a private partner that could help make an expansion happen. In December, the port corporation entered into exclusive negotiations with Kinder Morgan, of Houston.
KM offers ONLY $40M to keep the facilities up, leaving a $106M deficit for upkeep:
Critics said the $40 million Kinder Morgan promised for upkeep wasn’t nearly enough. Bailey’s list of needs includes $48 million for new warehouses, $25 million to buy two new container cranes and $15 million to replace a floating dock.
(Critics? Critics? You don’t need to be a critic to see that the $156M wanted by the Port over 10 years was greater than the $40M offered by KM implies to pretty much everyone that something that the Port ED wants won’t get done.)
And a DSPC Board Member was “hoping” that KM would provide a plan to build on the Delaware — seriously, a DSPC Board member is reduced to HOPING that their selected contractor would someday have a plan to get to the Board’s long-term ambition, the one they were selling as the reason for this lease action in the first place:
DiPinto said Friday he was disappointed to hear that Kinder Morgan had suspended its efforts. DiPinto said he was holding out hope that Kinder Morgan would outline plans to eventually build on the Delaware.
So are you following me here?
- How come no one is asking about the obvious disconnect between the $156M need and the $40M offer by Kinder Morgan?
- How come no one is asking how it is that the DSPC choose to negotiate with someone who would not commit to either short or medium term upgrades to the Port OR to building out on the Delaware?
- How come no one is asking how this Board could have been this inept? Not just in pursuing a deal that appears to not even get the Port to any medium or long term competitiveness; but also in not having a fallback plan. There are customers at this port with options, there are businesses and workers who are generating plenty of tax revenue here and it wasn’t worth someone’s time to have a backup? What if none of the bids were satisfactory?
Wouldn’t you want answers to these questions? Maybe the rest of the lease payment was a way to funnel those funds back to KM for more building, but that would mean that KM was getting that facility basically for free, which doesn’t make sense for a state that is telling its taxpayers that it can’t afford to invest in an already tax-generating asset. Who knows. What is plain to be, based on all of the information and documents we’ve been able to put our hands on is that KM wasn’t committing to the kind of long term improvements partnership that this Administration was selling to us.
The President of ILA 1694 reminds us that the Port of Paulsboro is under construction over in New Jersey, not far from the Port of Wilmington, meaning that more competition is definitely imminent. It is probably a little further away that planned, since they rejected their bids to build two berths. I don’t know if that Port would be set up to handle the fruit business that Wilmington does. Still, the thing I want to point you to is that this facility was built from scratch –approx. $250M price tag — financed by the State of NJ, Gloucester County Redevelopment Authority and the City of Paulsboro. Not private investment. NJ seems to hope that this facility will be a hub of offshore wind development. They’ve taken quite a risk and made a serious investment in their own future. Unlike the State of Delaware who still can’t quite come to grips with the fact that they have a great asset that needs investment to increase its competitive standing — they aren’t starting from scratch like Paulsboro is.