A U.S. subsidiary of Middle Eastern cargo company Gulftainer has signed a 35-year, $100 million agreement to boost cargo operations with a new terminal at Port Canaveral.
It’s the first U.S. location for Gulftainer, a United Arab Emirates company that has been seeking entry into U.S. markets for years.
At Port Canaveral, Gulftainer’s subsidiary, GT USA, has agreed to invest $100 million in infrastructure, equipment and personnel. The company expects to hire 95 percent of its staff from Florida. (Scroll down to read more of this blog.)
Port Canaveral authorities expect the new operations to create about 2,000 direct and indirect jobs when fully operational. Operations are expected to begin by the end of 2014.
Port Canaveral already handles nearly 4 million tons of cargo each year and is one of the busiest cruise ports in the world. Gulftainer is operating under a lease and will not purchase any port property.
Security operations will continue to be operated by the Port Authority.
“Staff will be vetted by the Transportation Security Administration to participate in the US transportation industry,” Gulftainer spokesman Joseph Ramirez, managing director at public relations firm Burson-Marsteller in Miami, said in an email.
In 2012, the Jacksonville Port Authority turned down Gulftainer’s $250 million request to open a large new cargo facility there.
In 2006, a major international controversy about security concerns erupted over the purchase of several U.S. port operations by Dubai Ports World.
At the time, U.S. President George Bush weighed in heavily in favor of allowing Middle East allies to conduct business in U.S. ports. Dubai Ports World sold its interest in the U.S. ports shortly after it bought them.
At least one expert on port security, Stephen Flynn at Northeastern University in Boston, said ownership of a port facility for cargo is generally not a security concern for him. Flynn was a senior fellow at the Council on Foreign Relations in New York during the Dubai Ports World controversy. He is co-director of the George J. Kostas Research Institute for Homeland Security.
“There is ongoing concern in the U.S. Congress about container security and port security, so it will be interesting to see the reaction to the Port Canaveral annoucement,” Flynn said in an interview. “Port operators have virtually no knowledge of the cargo they are handling. Mostly, they rely on what people declare. It’s people further up the stream that have impact on the contents of the container.”
Port Canaveral expects the new container and cargo terminal to contribute more than $360 million to the local economy, $280 million in revenue to Port Canaveral, and generate more than $350 million in tax contributions.
John E. Walsh, CEO of the Canaveral Port Authority, signed the agreement with Badr Jafar, chairman of Gulftainer’s executive board, at a ceremony held at Port Canaveral today.
“This agreement marks a new era for Port Canaveral,” Walsh said in an statement. “With work on the widening and deepening of the Canaveral Harbor currently in progress, the new container and multi-purpose cargo terminal will further underscore our credentials as one of the most important economic engines for our region, while providing value to Central Florida shippers and distribution facilities by lowering overall costs and offering more efficient links to the supply chain.”
“The decision to grant this agreement to GT USA was made after careful consideration and due diligence. An international port operator, the company has strong competencies in port development and supply chain improvement that is an ideal fit to our port development objectives,” said Canaveral Port Authority Commission Chairman Tom Weinberg. “This is a true game-changer that will strengthen our cargo operations.”
Gulftainer operates and manages ports and logistics businesses. IntelliNews reported in 2013 that Gulftainer is owned by UAE-based Crescent Enterprises, which is also headed by Jafar.
Jafar told IntelliNews that Gulftainer is currently the seventh largest port operator in the world and has operations such as Jeddah and Jubail in Saudi Arabia; Umm Qasr in Iraq; Ust-Luga in Russia; and Recife in Brazil.