Last week the Oakland Board of Port Commissioners approved a new partnership agreement for its Outer Harbor berths 20-24.  Under the first of its kind agreement, the Port of Oakland will partner with Ports America Oakland (itself a partnership between Ports America and Terminal Investments Limited) to develop and operate the berths.  Ports America will invest approximately $2.5 billion in the build-out of the terminal in exchange for the exclusive right to operate the terminal for a 50 year period.  

This is public-private partnerships at its best and truly is a win-win situation for both parties.  The partnership is expected to generate over 6,000 jobs providing over $100 million in direct personal income.  In addition, the Port of Oakland received a one-time, upfront fee of $60 million and will receive annual rent of approximately $19.5 million.  This will allow them to retire some existing bonds, saving almost $3 million a year of debt service.  Ports America gets access to some very scare waterfront land, in an established port location and will enjoy the full marketing efforts of the Port of Oakland.

Finally, in addition to the innovative financial structure, the new terminal will be one of the most modern and environmentally responsible in the world.  Ports America has indicated that they will utilize several of the environmental and operational best practices to reduce per TEU carbon emissions by as much as 90%.  Some of their strategies include using electric stacking cranes, ship-to-shore power, and scheduled pick-up and delivery times.  All of these will help to contribute to a terminal that is not only financial successful, but also a good neighbor to its community.

Let’s hope we see more of these partnerships in the future.