Logistec, a Canadian-based shipping terminal operator that works in 34 North American ports, managed and grew the cargo business at New London’s State Pier for 20 years, with a peak of 400,000 metric tons of cargo and 33 ship calls in 2018.
But by the end of 2018, Logistec was sent packing, rejected in a competitive bid process by the Connecticut Port Authority, which chose instead the operator of New London’s closest competitor, the privately owned Gateway Terminal of New Haven.
Predictably, I suppose, in the same way you would expect McDonald’s to close a Burger King next door, if it could, Gateway has closed New London’s State Pier to cargo, probably for the first time in more than a century. It has moved a lot of the business to its own terminal, where it doesn’t pay the state a cut. Other cargoes have moved to Providence.
The stated reason for the closure and the firing of New London union longshoremen, some on the job for decades, is to make way for construction of a new wind turbine assembly facility, an enormous project for which not one state or federal permit has been issued.
This was certainly not the plan announced back in 2018, when the port authority said it was going to choose a manager for State Pier who would both grow traditional cargo and also make way for the needs of the emerging wind industry.
Indeed, the official request for proposals, or RFP, issued by the port authority called for bidders to propose a way to use State Pier for both traditional cargo and wind turbine assembly. A specific objective was to better use the pier to get freight off congested highways.
But somehow, in what seems to me to be a deeply flawed and inherently unfair process, the port authority chose not an operator proposing to manage a dual-purpose port, as the RFP demanded, but one that has instead closed the cargo business down, to its own competitive advantage.
I reached out to Logistec, the publicly traded company that I’ll call the principal victim of this dishonest bid process, but Frank Vannelli, senior vice president of commercial development, said the company is still bound by nondisclosure agreements it signed in making a bid.
He did respond in writing to some questions, limited, he said, by the agreements, and suggested the company did not want to engage in sour grapes.
He noted in the written answers that the company responded to the RFP as written and proposed a dual-use port that would have used a floating flexiport to accommodate the wind components.
“We were ready to displace all other cargoes to adjacent property nearby or contiguous to State Pier property and keep the rest for the wind cargo when ready for development,” he said.
So what happened between the spring of 2018, when then port authority Chairman Scott Bates, the deputy secretary of the state, said they were preparing for a dual-purpose port “that could pivot one way or the other” between cargo and wind, to when the announcement of the deal with Gateway was made in early 2019?
“This deal positions New London as a wind power hub,” Bates said in 2019, traditional cargo evidently left by the wayside.
Logistec executives, who played by the rules and submitted plans as requested in the solicitation for bids, must have seen the writing on the wall when they turned up for the official RFP interview, and neither Bates nor the authority’s executive director were there to participate.
Vannelli confirmed, when I asked about the interview, that the agency’s chairman and full-time director both skipped it.
What an insult to a company that had been a strategic partner with the state in the operation of the port for the last 20 years and which participated in the bid process when it was announced.
I asked in an email to port authority officials whether there were any negotiations with Gateway before the final decision was made. Such talks would have violated the RFP rules and disqualified the respondent making a bid. I wonder, in the absence of such talks, how the Gateway bid could have been the ultimate winner with a predominately wind plan, given the specific requirements for a dual-use port envisioned in the RFP rules.
Current port authority Chairman David Kooris, who was not on the board at the time, said he is not aware of any negotiations with the bidders during the RFP process. Bates did not respond.
The final concession agreement with Gateway specifically envisions a time when “all or a portion of the port facilities and site” might be used for wind energy work.
How did a plan and request for bids, explained by Bates as having the aim to “pivot” between wind and cargo, end up producing a predominant wind plan in the final concession agreement?
And how is it that the port authority, in the middle of the RFP process, commissioned an international engineering firm to estimate the costs of remaking State Pier as a wind assembly terminal, in the same way that Gateway and the authority ultimately agreed to do it? The estimate, for $349 million, is dated July 2, a time when the port authority was not supposed to have any talks with the bidders except within the interview framework of the RFP.
I got the distinct impression that Logistec has moved on and doesn’t plan any legal contest to the dishonest bidding process. A lawsuit would reveal more of how New London didn’t end up with a port that can pivot.
More of the puzzle of the story may still be revealed in time, though.
Port authority critic Kevin Blacker has been working to interest federal regulators in anti-trust aspects of the deal.
And there are other victims of the port authority’s elimination of competition for New Haven’s politically connected port operator.
DRVN Enterprises, the road salt company that Logistec brought to State Pier, has been issued an eviction notice and may no longer be able to compete with the salt business Gateway runs in New Haven.
The competition DRVN brought to Connecticut substantially lowered the cost of road salt for municipalities in the region, a savings that likely will be lost once that competition is wrung from the market.
You don’t have to be a lawyer to see an anti-trust complaint there, a rigging of the market engineered by a quasi-public authority. Welcome to Connecticut.
The written answers from Logistec, in which the company thanked the longshoremen’s union for its 20-year partnership that it said helped grow the business in New London, were generally sanguine about the outcome of the RFP.
But the company did observe that they were excluded from the process.
“They were already in negotiations during the RFP process with Gateway Terminals,” Vannelli wrote. “We were never given an opportunity to quote exclusively on wind by the (port authority,) so the RFP, from Logistec’s perspective, was definitely flawed.”
Someday we may even know why.
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