Deals

Goldman, Highstar in bidding for Philadelphia port

Port operators backed by the two firms’ infrastructure funds will compete in a bid to help the Port of Philadelphia fund its first major expansion in 50 years. A delay in the bidding process gave Pennsylvania time to make the project more palatable to the private sector by funding various improvements at the site of the proposed PPP.

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Pennsylvania has picked two teams to go forward in the contest to fund a major expansion at the Port of Philadelphia, including a group backed by Goldman Sachs and Highstar Capital.

Dubbed “Southport” the project will enable Philadelphia to handle about 1.1 million more container cargo units once it’s fully operational. It will mark the first major expansion at the port in 50 years and will give private investors the opportunity to build, design, operate and maintain the new facility.

Philadelphia's Southport:
moving forward again
Delaware River Stevedores, a joint-venture between terminal operators Carrix and Ports America Group, was one of the private investors selected to bid on the opportunity. Carrix is a port operator owned by Goldman Sachs Infrastructure Partners, while Ports America Group is backed by infrastructure fund manager Highstar Capital.

Together they will work with Asian Shipper Huyndai Merchant Marine to put together their bid for Southport.

Delaware River Stevedores and Hyundai will compete against SMT Development Partners, a team comprised of Spanish infrastructure developer OHL and port engineering firm CH2M Hill.

The two teams were selected after Pennsylvania evaluated preliminary proposals submitted from interested bidders on 12 May. The submissions marked the reinstatement of a bidding process that was delayed a year earlier by the credit crisis.

Pennsylvania has used the extra time to make the project more palatable to the private sector. Governor Ed Rendell released $25 million toward the project, which helped fund environmental studies, permitting land acquisition, site preparation and other activities that helped ready the project for a public-private partnership.

In response, the private sector has shown great interest in the project. A May webinar for Southport sponsored by the Pennsylvania Department of General Services was attended by a who’s-who of infrastructure, including executives from Macquarie, JPMorgan, Goldman Sachs, Barclays and Morgan Stanley.

Pennsylvania hopes to select a preferred bidder for Southport by September. Financial close is targeted for the first quarter of next year, according to the webinar presentation.