The board of the State Ports Authority has wisely adopted a policy that
ends any prospect of a private company taking over the operation of its
port facilities. Board member Carroll A. Campbell III made a persuasive
case to the board this week about the dangers of such an arrangement, with
the potential total unionization of the port among his prime concerns.
That's a legitimate worry and one of several good reasons to reject the
idea.
Expansion plans both at the former Navy Base in North Charleston and in
Jasper County have put the issue on the table. A lawsuit is pending in the
State Supreme Court that will settle whether the SPA has the exclusive
right to operate port facilities in the state. The suit was filed in the
wake of Jasper County's efforts to allow a private company to develop and
operate a port there.
As Mr. Campbell noted at Monday's meeting, SPA board members recognize
the need for some sort of private participation in the Jasper project,
and, possibly, in the new North Charleston port. The SPA previously had
issued invitations for "expressions of interest" to 36 private companies
and received 20 responses. After a series of meetings the competition was
narrowed to 11 groups representing 15 firms. Mr. Campbell observed that
some of those firms expressed a preference for the landlord/tenant model.
With formal requests for proposals soon to be issued, it was the board's
role to shape the guidelines.
Mr. Campbell prefaced his motion by telling the board: "I can support a
public/private sector partnership. I cannot support a business model that
requires this board to surrender its responsibilities to a private
company. While private participation is a good thing, privatization of our
state's public ports -- the so-called landlord/tenant model -- is a very
bad idea."
Pointing to the labor difficulties that have shut down other ports in
the nation. Mr. Campbell noted that "marine terminal operators are
contractually obligated to hire 100 percent union members." While the
board member praised Charleston's longshoremen, he said the SPA model that
has union workers alongside public employees is a proven success, "as
evidenced by incredible productivity and financial success." It is the use
of public employees in numerous positions, he said, that gives the SPA its
"critical competitive edge in cost and efficiency." Mr. Campbell also
reminded the board -- which approved his motion by a 5-3 vote -- that an
analysis earlier this year showed it would be three times as expensive to
run the Wando Welch Terminal under the landlord-tenant model.
That model already has raised legal questions in the Jasper situation
since property for that port would have to be taken by eminent domain. The
S.C. Supreme Court told Jasper several years ago that its private
operational plan didn't meet the "public use" test required to condemn
property. The county's revised plan has yet to be tested since its right
to operate a port is being challenged by the SPA. It should be clear,
however, that the government agency that winds up developing the Jasper
port isn't going to be allowed to condemn property for a port that is
privately operated.
It is obviously in the best interest of the port's customers to ensure
that funds are available to develop additional port capacity. That's where
private-public partnerships can come into play. But allowing a private
company to all but take over a port operation in South Carolina would be a
revolutionary change and a decision that belongs with elected officials,
not an appointed authority.