The board of directors for the South Carolina State Ports Authority (the "SPA") recently voted, 5-to-3, to forbid consideration of any public-private partnership that would surrender any operational control in its two new terminal projects at the former Navy Base in Charleston and the Savannah River in Jasper County. Such a position puts South Carolina at a serious economic development disadvantage.

Public-private partnerships that cede some operational control to private companies have allowed ports to obtain the capital necessary to pay for state-of-the-art facilities. Such partnerships already exist at 45 of the world's 50 largest ports, including 13 of the 15 largest U.S. ports.

Virginia International Terminals recently welcomed the commitment by Maersk Sea- land, the world's largest shipping company, to spend $450 million building a new terminal in Portsmouth, increasing the Port of Virginia's capacity by a third. Officials with VIT noted that, "It's capacity we need. We don't have the money to buy additional property or expand beyond where we are now, but this is all being done with private money."

The projected cost of the SPA's two new terminal projects is about $1.3 billion. The SPA can finance only a fraction of this cost. Like VIT, the SPA lacks the capital to build its new terminals; however, unlike VIT, SPA appears unwilling to surrender any operational control of its terminals.

Why would the SPA adopt a policy position that essentially makes development of terminals at the former Navy Base and in Jasper County impossible? Unfortunately, there is an unfounded concern that by allowing a private company to operate a terminal within its port system, South Carolina would somehow open itself up to a massive takeover by organized labor. That assumption is simply wrong. The truth is there is already a substantial union presence on our state's docks - currently 1,400 unionized employees work at the Port of Charleston, compared with just 400 state employees. In addition, such an assumption fails to include an understanding of how unions operate in our nation's ports.

A port employs clerks and dockworkers, also called longshoremen. They are members of separate locals of the International Longshoremen Association (the ILA). The clerks' job is to man the terminal gates and process trucks and their cargo into and out of a terminal. The longshoremen are the labor force that loads and unloads a ship's cargo. Both work for a stevedoring company, which is hired by the ship to bring labor, equipment and management to the ship's operations dockside. The SPA does not handle cargo.

The ILA's master contract with ocean carriers and marine terminal operators awards the clerks' jobs to the ILA. In Charleston, however, the ILA cooperated with the SPA in setting up a common user area within the SPA's existing terminals. This cooperation was to accommodate smaller carriers that were not fully automated - the ILA clearly recognized that the smaller carriers might not be able to bear the cost of hiring its members to man the gates of the common user areas.

Past concessions in regard to the SPA's existing terminals do not oblige the ILA to make the same concessions at the SPA's new terminals. All of the SPA's major customers are signatories to the ILA master contract that requires the clerical jobs to go to ILA members - that means an expansion of union labor is inevitable at the two new terminals, regardless of who operates them. The SPA will have no more ability to change that contract than a private company would. (The longshoremen have no contractual right in the ILA master contract to certain jobs, such as crane operation or yard equipment. That means the SPA could negotiate a relationship with a private operator that ensures that the SPA employees operate cranes and yard equipment.)

Even if the concerns about expanded unions were founded, they are not sufficient to tell private shipping companies and terminal operators to take their private capital elsewhere. We cannot afford not to expand our capacity. South Carolina must capture its fair share of the huge Asian business that is being locked down in long-term deals by Virginia, Georgia and Florida.

Officials should more carefully consider public-private partnerships - failure to do so is a dangerous decision in a state that needs to expand its competitive edge quickly.

Ed McMullen is president of the South Carolina Policy Council.