Galveston port poised to outsource its operations (Li Ka-shing's first U.S. toehold)

GALVESTON — The Port of Galveston is in final negotiations to lease its facilities to a major investment group, which could make it the first U.S. port to turn over its entire operation to the private sector.

Several U.S. ports lease terminal operations to private operators, but "in this case it is the entire port structure, which is really a unique opportunity," said economist John Martin, who heads Martin Associates, based in Lancaster, Pa.

Martin Associates had done work for every U.S. port and did the economic study for the proposed lease, a 50/50 joint venture of global investment firm Carlyle Group and Hong Kong-based Hutchison Port Holdings, the world's largest stevedore-terminal operator with operations in more than 50 ports in 25 countries.

"This would be the first foray of the largest terminal operating company in the world to the United States," said port consultant Erik Stromberg, former chief executive officer of the American Association of Port Authorities.

..."It will be, as far as I know, the first one, but it won't be the last," Brinson said. "You are going to see ports that look like Galveston looking more and more to the private sector."

The 75-year lease is unprecedented, Stromberg said. Most port leases are for 30 years and occasionally 50 years, he said...

.....Over the next 50 years even large ports like Houston's could follow Galveston's lead, he said......

I have no problem with the privatization of a port; indeed, I welcome it.

OK you established your libertarian credentials

However, I certainly don't welcome Red China running a private port in the United States.

It isn't Red China. It is two private companies. Hutchison Wampoa and Carlyle group. What fine libertarian could possibly object to this new ownership?

It isn't Red China. It is two private companies. Hutchison Wampoa...

Hutchinson-Whampoa has been controlled by Red China since the late 1970s. From Time magazine, The Other Handover:

But by 1979 he [Li Ka-shing] was straining to break out of the confines of being a mere property developer. He quietly invested some money he made from the stock market in Hutch before acquiring the Bank's stake. The Bank was looking for more than just commercial acumen; it wanted connections to the political masters in Beijing who were dismantling the horrors of the Cultural Revolution and pursuing an open-door economic policy that would eventually give foreign companies access to China's vast market. Michael Sandberg, the Bank's then chairman, decided that the best way was to form a close association with someone like Li who could help the Bank get back into China.
The Bank's faith in Li's guanxi, or connections, was vindicated with extraordinary speed. A month after selling its stake in Hutch, Li was named one of three Hong Kong directors to China International Trust and Investment Corp., the company that was designated to spearhead China's open-door policy by aggressively creating a capitalist business model for others to follow.

No obscure Hong Kong flower salesman just happens to be put on the board of the Chinese Communist Party's flagship NEP enterprise, CITIC.

Looks to me like a good capitalist company from China. You advocate private ownership of ports and they like to own and manage them. Would you feel the same if it was a private corporation from Brazil or Korea?

Do you believe in free trade between China and America?

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