At first glance, it would seem like the idea of partnering with a private operator at the Port of Wilmington would be a no-brainer.
Delaware has invested $130 million in the port and needs to do much more to keep it competitive. Putting a larger debt burden on taxpayers is risky in the current environment.
Still, concerns have been building in Legislative Hall as the state and petroleum transport giant Kinder Morgan negotiated a possible deal.
It was not clear that legislators would have a chance to approve any deal. Anytime a company from Texas is in the mix, labor unions and others raise red flags.
Some businesses tied to the port are also uncomfortable with a bulk materials and petroleum transport specialist focusing on a port that specializes on fresh produce, such as bananas and winter fruit from the southern hemisphere.
Moreover, the state’s General Assembly is tilting to the left and a few members are uncomfortable with a centrist governor and a Republican economic development chief negotiating a deal. Legislators are also willing to flex their muscles given the fact that Gov. Jack Markell is now into his final term.
Privatization is no longer seen as a panacea for governments facing fiscal challenges. One worry is that private operators will not live up to promises of reinvestment and might scrimp on maintenance or other areas. Still, the state would not be breaking new ground by opting for a private operator Maryland, which is hardly a bastion of conservatism, has a successful partnership with a private operator at its port in Baltimore. Legislators, meanwhile, moved quickly and passed a compromise bill that gives the Bond Bill committee oversight over a sale.
Reports indicate that Kinder Morgan is not happy with the bill and the legislation remains on the desk of the governor at this writing.
In the meantime, Kinder Morgan has been more forthcoming on its plans for the port. Company representatives are now talking to the News Journal. The media company has been rolling out stories on the company that come with few specifics, but seem to put the pipeline operator in a more positive light.
The danger here is that the General Assembly risks sending out an anti-business message at a delicate stage in the process. That explains the decision to let budget experts in the legislature review the deal if and when it is struck. Another thing is clear. The status quo is not an option. Failing to invest in the port will lead to a rapid decline in business in a highly competitive environment and at a time when global trade is a key to economic survival.