Agencies battle for state's next port

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The dispute concerns whether a proposed port facility in Jasper County should be owned and operated by the South Carolina Ports Authority, with private investment participation, or whether it should be operated by a private company hired by the county.

Michelin and BMW, two of the state's biggest employers, are major customers of the Ports Authority, and Bernard S. Groseclose Jr., president and chief executive officer of the Authority, said that 60 percent of its South Carolina-generated business comes from the Upstate.

Groseclose said the Ports Authority's enabling legislation gives it authority to operate the Charleston, Port Royal and Georgetown ports, as well as any on the Savannah River. The Authority is asking the state Supreme Court to affirm the Authority's exclusive — or at least predominant — right to control ports facilities.

Jasper County administrator Andrew Fulghum told the Associated Press the county has been working to develop a terminal for a decade "and we have always said we would welcome the Ports Authority's support and collaboration."

Michelin, with its North American headquarters in Greenville, is the port's largest customer by volume, and many of its raw materials come in through the port because rubber is not a North American product.

"The Port of Charleston is vitally important to Michelin's business, as well as many other businesses in South Carolina," said Michael Fanning, Michelin North America vice president of corporate affairs.

"It's been well-documented that the port needs to be expanded to meet future demand. We haven't been briefed on prospects in Jasper County, so we can't comment on how that would fit into the state's ability to provide state-of-the-art port services at an economical cost."

BMW also said the port plays an important role in its ability to build and distribute vehicles from its Greer plant.

"Clearly, when BMW came here, the ability of the Port of Charleston to handle our needs for the long-term was a major factor," said Bobby Hitt, manager of public relations for BMW Manufacturing Co.

The company's relationship of more than 12 years has been strong and a second 10-year contract — almost unheard of in BMW — was signed recently, he said.

"It has to do with the fact that we have never lost an hour of production due to our relationship with the port," Hitt said, adding that the port has even used a helicopter to ferry supplies needed immediately by BMW. "A private company would probably do much the same thing for a fee."

Hitt said of the relationship, "We would not like to see it change. It's one of the reasons we came here."

A facility in Jasper County — only eight miles from the open ocean — would give South Carolina businesses more access to and from Asian markets and make the state more competitive with Georgia ports that are moving in that geographic direction, Groseclose said.

Currently, China is the port's second biggest foreign customer — behind Germany — and provides about 10 percent of the volume flowing through the port, he said.

"China and India are the two biggest growth areas, followed by Latin America," he said.

"We're more heavily oriented to European and Latin American business. Savannah is more oriented to Asian business. Jasper County is the key to the long term. It allows us to start to pick off the Asia traffic," he said.

Groseclose added, "We feel like there is a model in South Carolina that works. That's public control."

Hitt said BMW values the efficiency of the port, recently bringing another 40 percent of its business to the Port of Charleston.

"There is a special relationship between the port and South Carolina companies. It is an important operating link. They look out for South Carolina companies, large and small. That is a government attitude, not a business attitude."

A big factor in the Ports Authority's success is the work it does to ensure the productivity and profitability of the companies that use it, he said.

Hitt pointed out that BMW has had offers to move to other ports and never accepted any of them.

"The ports need to grow and expand, to stay current and modern," he said, and BMW is a big supporter of the expansion of the Port of Charleston to the Navy base and it supports its Jasper County plans.

Companies using the port understand the question of who operates the Jasper County facility "is a major philosophical issues for the state. Do we subordinate companies from the Upstate and the rest of the state to one county and one company?" said Byron Miller, spokesman for the Ports Authority.

Groseclose said that "in less than 20 years, Charleston will have completely used up its capacity," even when the three new berths at the 280-acre facility at the old Navy base are included. The facility to be built at the base is a "short-time capacity" aid.

Another issue at the proposed Jasper County facility is the Ports Authority's ability to use eminent domain to condemn the land now owned by the Georgia Department of Transportation for the public good. The Supreme Court has ruled that Jasper County can't condemn land for use by a private company, Groseclose said.

Although the Ports Authority is talking with the Georgia ports about a bi-state contract for use of the Jasper County port, it also has started condemnation proceedings in case the talks don't succeed, he said.

The Jasper County location eventually has the capability of developing into a facility that is "equivalent to everything we do in Charleston," he said.

The Ports Authority invited private companies — including SSA, the company working with Jasper County on its plans — to participate in the funding of the Navy base project, the Jasper County project or both, Groseclose said. Of 32 initial invitations to express interest, 12 positive responses have been received.

Ports Authority plans are to fund the project with bonds, its cash flow and private funding, he said.

Even with some private funding, he said, "we believe it is important to have that public control."