With cargo volume continuing to climb, the State Ports Authority approved a budget Tuesday that shows $127 million in capital spending through mid-2008, a figure that could swell by another $200 million if regulators give the go-ahead to a new steamship terminal on the Cooper River.

The SPA's big-ticket investment plan is being driven largely by the surge in international trade, as a rising tide of domestic and foreign shippers vie for a limited amount of dock space at the Port of Charleston.

The agency said it expects to handle a record 1.2 million containers, an estimated 8.5 percent increase, at its terminals for the 2007 fiscal year, which begins July 1.

The SPA's bullish forecast also called for a banner year in terms of revenue, earnings and investment. Its newly approved budget is slightly more than $165 million, up nearly 10 percent. Bottom-line predictions include $107 million in operating expenses and $55 million in net income.

The Charleston-based ports authority also estimated it would hire 16 new workers over the next year, mostly in operations and maintenance, bringing its payroll to 619 employees.

Topping the list of high-dollar investments are new cranes and other container-handling equipment, which will cost about $50 million in fiscal 2007. Much of the new equipment, approved by the SPA board last September, is expected to help the state maximize the real estate at its three main container terminals and tide it over until it can build a new facility.

At the same time, the SPA plans to spend another $25 million, including nearly $9 million on wharf improvements and $1.6 million in soil tests for a controversial terminal it wants to build on the Savannah River in Jasper County.

The SPA said it would pay for the fiscal 2007 projects with cash. It plans to reimburse itself by issuing $100 million in bonds financed with revenue from its port operations.

The balance of the debt issue, roughly $25 million, would be retained 'to leave us in a strong cash position,' said Bill Stern, board chairman.

Looking ahead, the SPA projected its total capital spending for fiscal 2008 would be about $52 million.

In a statement, the agency stressed that all financing for the planned projects 'will be handled through internal sources, such as cash, earnings and independent borrowing, and not through tax dollars or public debt.'

The cost of the two-year investment strategy could rise significantly if the ports authority obtains all of the approvals to build a $600 million to $700 million deepwater container terminal on the former Navy base in North Charleston.

The Army Corps of Engineers is set to issue its final decision about the expansion by the end of the year.

If the Navy base project is approved, the SPA would likely issue $100 million in bonds in each of the next two fiscal years to help pay for it, said Peter Hughes, chief financial officer.

Also, the agency is reviewing confidential proposals from private steamship lines that have expressed interest in helping finance the 280-acre expansion. No deals have been announced.

Reach John McDermott at 937-5572 or jmcdermott@postandcourier.com.