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The Port of Wilmington has been mired in controversy over much of the last few years, but public discussion of the issues has been fleeting. | PHOTO COURTESY OF GULFTAINER[/caption]
It was famed Supreme Court Justice Louis Brandeis who wrote that “sunlight is said to be the best of disinfectants,” a phrase that has become synonymous with government transparency and the strength of the First Amendment.
An effective government is one that is open and responsive to the public by being free to be critiqued by the press, advocates or just your neighbor down the street.
Unfortunately, in Delaware, a patchwork of laws, legal decisions and regulations often cloud the public’s understanding of how and why state leaders make their decisions.
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Jacob OwensEditorDelaware Business Times[/caption]
The Law Enforcement Officers’ Bill of Rights often limits the public’s ability to see how cases of police misconduct are handled. The ruling that the University of Delaware is a private institution despite receiving significant annual taxpayer support often shields its decision-making and financial information from public review. Reviews of taxpayer-backed economic development grants are done behind closed doors with little public discussion before their consideration by appointed state boards.
All of these things deserve more scrutiny and transparency, but one more recent example that is troubling is how the tenure of the Port of Wilmington’s once-heralded operator unceremoniously ended in favor of a new one.
The operations at the port are anything but trivial, employing thousands of unionized workers who make Wilmington the largest port of entry for bananas in the United States and a major port for other cargo as well. The presence of the port supports a network of connected industries, including distribution and storage that employs thousands more.
According to a 2017 economic impact report by the state, the port added more than $500 million in annual economic activity to the region through wages and business profits. There are few assets in our state that could claim those kinds of impacts.
Most importantly, the port is a public asset, financed by state taxpayers dating back more than 100 years.
In 1913, the citizens of Wilmington approved a bond measure to build their own deep-water port to support the growing local shipbuilding, railroad car construction and carriage-making industries. Seven years later, the city issued a bond of $2.5 million in public debt – the equivalent of more than $77 million today – to acquire 101 acres of land to build what is today the Port of Wilmington.
In 1995, the state acquired the port from Wilmington to reinvigorate operations there amid growing competition from Philadelphia and New Jersey. It formed the Diamond State Port Corp. as a state-owned entity to manage the day-to-day affairs of the port.
The plan worked for a while, but with any state-owned operation, taxpayers were also subject to the peaks-and-valleys of the global shipping market. Gov. John Carney sought to get Delaware “out of the business of subsidizing the port,” and sought out a private operator.
In September 2018, state, port and company officials packed the Chase Center on the Riverfront to witness Carney and Badr Jafar, chairman of Gulftainer, sign a 50-year concession agreement that essentially leased the public port to the Emirati company for use. It was heralded as a transformative moment for the port’s future.
Yet, the tenure of Gulftainer’s local subsidiary, GT USA Wilmington, was plagued almost from the start by financial woes, disputes with unionized laborers, lawsuits with neighboring operators and the dismissal of top leaders. The private company did not have to make periodic public reports about its progress, despite leasing one of the most important publicly owned assets in the state.
The DSPC, a 12-member board largely made up of politicians or public officials that essentially acted as the landlord to GT USA, held very few public meetings that could have shed any additional light on the troubles at the port for the public.
According to minutes from its meetings in 2021 and 2022, the DSPC met only six times and canceled two meetings during a tumultuous period that we know about only due to media reports. Two of the meetings lasted less than 10 minutes, while the remaining meetings often stretched to two hours, but nearly the entire time was spent in closed-door executive sessions. Nowhere in the public minutes over two years is overt concern expressed by the DSPC about the operations of the port.
That lack of transparency is partly why the sudden change in operator was so surprising to the public – done without the pomp and circumstance of the Gulftainer announcement at a little-attended DSPC board meeting.
It also leaves many details about the bid and decision-making process unclear, and the DSPC reportedly considered three other operators aside from Gulftainer before picking Boston-based Enstructure – a company that on its face does look up to the task of turning around the Port of Wilmington. At least one of those other bidders, Holt Logistics, has decried the bid process though and claimed that its proposal was financially superior to that of Enstructure.
Frankly, it’s hard to tell without access to the necessary details.
Despite the state announcing the deal with Enstructure has been “finalized,” however, my Freedom of Information Act request for a copy of the final concession agreement was recently denied because it was deemed a “draft document,” according to DSPC legal counsel.
Obviously there is a degree of secrecy required to conduct negotiations with private companies, but the manner in which the port’s contract was reassigned leaves much to be desired.
