The General Assembly will form a subcommittee to study the pros and cons of privatizing Virginia’s state-owned ports. As the Virginian-Pilot observes, the private sector has demonstrated its willingness to invest in expanding and upgrading port facilities. There is good reason to believe that Virginia’s superb ports could operate just as efficiently and raise capital just as easily as a private entity.
The subcommittee also will examine whether the state’s road and rail network is adequate to serve the ports’ long-term needs.
The two questions are interrelated. Clearly, the highway network is not adequate to serve the ports’ long-term needs. Regional transportation planners desperately want to to build a Third Crossing across the James River and to upgrade U.S. 460. Trouble is, the ports have demonstrated no interest in paying for the multibillion-dollar upgrades themselves. All proposals on the table would shift most of the burden to motorists.
I have no idea what the ports of Virginia would sell for, but let’s hazard a guess. The ports generate roughly $4.5 billion a year in revenue. Assuming a valuation in the ballpark of $1 of value per $1 in revenue, the ports could sell for as much as $5 billion. How about investing a portion of that sum in upgrading the highways and track needed to keep the ports more competitive? Not only would that solve the political problem of taxing unwilling citizens, a promise to invest the proceeds in transportation infrastructure actually would increase the value of the ports to any bidder.
I don’t know if the authors of the General Assembly study intend to explore that specific idea, but I wouldn’t be surprised if they do. Such elegant solutions to otherwise intractable problems don’t come along very often.