The devil is in the proverbial details, but, at first glance, the “privatization” of the Port of Wilmington with its redevelopment by UAE-based Gulftainer seems like a good deal for Delawareans.
More questions have come to me about this deal in the last two weeks than almost anything in recent memory.
And the declines in breadth, depth and institutional memory of the local daily papers leaves Delawareans without a sense of perspective for this deal.
Frankly, it seems to me that in terms of job creation and contributing robustness to the Delaware economy, the Gulftainer deal has the potential to be one of the three most impactful developments in the last decade.
First among those in my view is Delaware’s catch-up game with its flagship university, the University of Delaware, finally playing a much more significant role as a catalyst for science- and technology-based company formation and job creation.
While the University of Delaware prospered under David Roselle as its president for 18 years, it’s really been the convergence of a variety of forces in more recent years that have made the university a major player by making it a major resource, from its STAR campus and the forces arrayed around that to its entrepreneurship programs at its College of Business and Economics.
Second among those — and many of us are holding our collective breath on this one — is the creation of the 3P partnership, the semi-privatization of the Delaware Economic Development Office (DEDO) and its economic development function under Gov. John Carney into the public-private Delaware Prosperity Partnership.
Given Delaware’s huge need for blue-collar job creation at good wages, the Gulftainer deal has great promise.
As well as its professional managers have run the Port of Wilmington, the port always has underperformed because government is not a good capitalist and generally government is not a good innovator.
In today’s world, government-owned assets like the port — which had been owned by the City of Wilmington before it was taken over by the state at Wilmington’s request — must always compete for capital with a variety of other priorities, ranging from populist infrastructure needs to social entitlement transfers.
In addition, effectiveness in managing government and effectiveness in managing capital, employees, technology and business opportunities in a private sector situation are entirely different skill sets. Even a good government can fail miserably in private-sector activities.
It’s my hope — and certainly the hope of those doing this deal — that Gulftainer will serve Delaware’s best interests by serving its own economic interests. Without detailed knowledge of the deal, my only concern — given that the state’s revenues are based on royalties — is whether Delaware’s deal-makers have been astute about scrutiny of unfavorable transfer pricing that could artificially lower Delaware’s “take” from the cash flows.
Beyond that, if Gulftainer does what it should do in its own interests, Delaware will prosper, from the union employees to the satellite businesses that grow up around the port to the other activities that will flow from this economic engine.
Press coverage has not included details about the history and evolution of this deal, so it’s difficult to know how and where it started, and to whom to give credit.
But, for those who are seeking some benchmark or metric for how to view this deal, in my opinion it’s a
major landmark deal for the state and the community with the potential to transform the local economy in
really significant ways.