After a tumultuous three years during which state officials made a series of significant institutional reforms to address concerns with cargo volumes, efficiency and profitability, the Port of Virginia could be in for more change.
Gov. Terry McAuliffe, the new Democratic governor of Virginia, told the Hampton Roads Chamber of Commerce on April 1 that continued losses at the port were unacceptable, but that the port has a bright future under the new management of Executive Director John Reinhart, according to a summary of his remarks on the business group's website.
"Don't tell me how much our cargo is growing if we are losing money. Growth for the sake of growth without profit is not something I am interested in. I would prefer to have less cargo and more profit," McAuliffe was quoted as saying by the Hampton Roads Chamber.
Red ink and concerns that the VPA was eschewing good business practices to fulfill its public service mandate of economic development prompted former Gov. Bob McDonnell, a Republican, to replace the port's board of commissioners, consider offers to privatize the port and ultimately work with the legislature to reorganize governance and operations at the port.
The Virginian-Pilot reported that McAuliffe was unhappy about recently discovering that the port's losses were actually greater than previously reported
, that he was considering changes on the board and that the 20-year lease for APM Terminals was a bad deal.
Bringing the private APM Terminals within the port's control was a decision made in 2010 by the administration of former Democratic Gov. Tim Kaine. Under the deal, the VPA pays APM $40 million per year, although the amount can rise depending on cargo volumes.
McAuliffe spokeswoman Rachel Thomas confirmed to American Shipper
that a review by Transportation Secretary Aubrey Lane found that cash deficits were actually $120 million over the past five years, $34 million more than the port authority had stated in the February "State of the Port" presentation.
The governor and Secretary Lane "are concerned with the past performance of the port and the APM Terminals contract and they are looking at a variety of ways to move forward with the port" and make sure continued support is a wise investment for Virginia taxpayers, Thomas said.
She said they believe the APM Terminals contract "was poorly negotiated on the state's behalf."
McAuliffe and Lane are reviewing the current board and will make any necessary changes to make sure the port is performing at its highest potential, she added.
Last week, the VPA announced a series of steps it is taking to improve operational efficiency on the docks