How large a project this is...

[Rob Lee]

http://online.wsj.com/article_email/SB125876482535558343-lMyQjAxMDI5NTI4MjcyNjI0Wj.html

Investor to Help Baltimore Port Prepare for Bigger Ships

A private investment group led by Highstar Capital has agreed to
invest as much as $1.3 billion to expand the Port of Baltimore as
ports in the eastern U.S. push to make changes needed to serve a new
generation of supersize cargo vessels.

The deal, announced Friday, is essentially a 50-year lease between the
Maryland Port Administration and Ports America Group, a company owned
by Highstar Capital, a New York private-equity fund. In exchange for
the right to operate Baltimore's cargo-container terminal for 50
years, Ports America will make an upfront payment of $100 million and
a series of infrastructure improvements at the port. Chief among them:
deepening the water at the cargo terminal to 50 feet from its current
depth of 45 feet.

The improvements will enable Baltimore to compete for the supersize
cargo vessels that are expected to start passing through the Panama
Canal after its expansion is complete in 2014 or so. The vessels are
capable of carrying twice as many 40-foot containers as the cargo
vessels that typically call on East and Gulf Coast ports.

Other ports are considering similar expansions and hunting for the
capital to get them done. The Port Authority of New York and New
Jersey is examining a number of proposals to fix its biggest
impediment to serving bigger cargo ships: a bridge that isn't high
enough for the vessels to fit under.

Port officials in Charleston, S.C., are studying plans to increase the
depth of its water, which fluctuates by six feet along with tides. The
port is also moving to develop its Navy Base Terminal, which would
boost container capacity by 50% when finished.

Officials in Savannah, Ga., are improving rail connections, purchasing
new gantries and upgrading technology in an effort to more than triple
the number of containers the port can process. The port will find out
within the next year or so whether it can proceed with a channel-
deepening project that would enable it to handle the larger vessels.

"The canal expansion is clearly going to be a game-changer in
international trade," said Curtis Foltz, chief operating officer at
the Georgia Ports Authority.

The port in the best position east of the Panama Canal may be in
Norfolk, Va. The water is already 50 feet deep there, and the port has
joined with freight rail company Norfolk Southern Corp. and others on
the Heartland Corridor, a rail connection to the Midwest that can
accommodate trains double-stacked with 40-foot cargo containers.

"We do know [traffic] is going to go up" after the canal is widened,
"and we're definitely going to be ready for it," said Joe Harris, a
spokesman for the Virginia Ports Authority.

Private infrastructure groups are looking for opportunities at a time
when many state and local governments are strapped for cash. Florida
recently signed a deal with a private consortium to build and operate
a tunnel at the Port of Miami. Earlier this year, the Port of Oakland
agreed to turn over some of its terminals to Ports America, which has
gradually established a presence at virtually every major port in the
country.

"Difficult economic times also open the door for new business
opportunities," said Maryland Lt. Gov. Anthony Brown, referring to
Baltimore's deal with Ports America. Maryland officials said the deal
could ultimately bring 5,700 jobs to the state, which plans to spend
the $100 million upfront payment on road, bridge and tunnel upgrades.

In a statement, Christopher Lee, president of Ports America Chesapeake
and managing partner of Highstar Capital said the company is looking
forward to implementing "the critical infrastructure required to
maintain the Port of Baltimore's competitiveness and importance to the
Maryland economy."