Charleston Port Economics
The economic study done for the Navy Base container terminal was conducted by Dr. Al Parish-aka Economan. Dr. Parish will soon be going to jail for defrauding millions of dollars from hundreds of investors. Click here for how Al Parish did his economic study for our ports authority.
Before we spend hundreds of millions of dollars based on Economan's "work" , let's first examine the SPA's business.
The State Ports Authority (SPA) is a public state agency that mainly handles containers to and from ships and trucks. They want to expand their business and desperately need our taxpayer money for expansion. As shareholders and taxpayers, let's do a little bit of analysis to see if this a good deal for our limited tax dollars.
First, we need to know the profit margin our state agency makes handling a container. As a shareholder, you would think this number would be readily available, however the SPA refuses to tell the public their(our) profit margins.
When we look at the SPA's 2007 Financial Statement and we look back at the Legislative Audit Council's previous work on the SPA, we estimate the profit margin to be only 37 dollars per container( see below for the math). Please realize this is before taxes- since a state agency does not pay any taxes.
The new terminal is expected to cost $600 million dollars to build and the roads necessary for the new terminal are expected to cost another $600 million dollars.
How many containers will this new terminal have to handle at $37 dollars per container to recoup the 1.2 billion dollar expense ?
The SPA will have to handle approximately 32.4 million containers, and that is before any interest expense on our money. Last year, the SPA handled 1.08 million containers at its three existing terminals. If this new terminal could somehow handle as much as all three terminals are handling today, it would take over 32 years just to recoup the dollars on this project.
Do you know of any private company that would invest their money in a project and have to wait 32 years to get their money back?
Now you can begin to understand why there is such a big rush among our port leaders and politicians to get this project started before the public catches on as to just how bad a financial deal this really is.
And to make matters even worse for the taxpayers, we could get a much larger terminal built for free by a private company in Jasper County.
The SPA prefers to talk about "indirect jobs" and "indirect sales revenues" for our State - numbers which are very hard to quantify and easy for someone like Al Parish to invent.
Let's start holding our port leaders and politicians accountable for
some real numbers before handing out hundreds of millions of our tax
dollars.
Recap of the 2007 Financial Statement.
$153.44 Million Operating Revenues
$103.56 Million Operating Expenses
$49.88 Million Operating Earnings
1,883,651 TEUs handled which equates to
1,082,558 containers handled (one container equals 1.74 TEU)
According the Legislative Audit Council, approximately 80% of the SPA's revenue is derived from their container business.
80% of 49.88 million dollars(total operating earnings) equals $39.9
million
dollars of container earnings divided by 1.08 million containers = $37
dollars
profit margin per container
And what about the environmental costs to clean up our air quality after
port
expansion?
West
Coast ports have enacted a $35 dollar container fee to fund a program
for
cleaning up their port air pollution.
Contain the Port supports an accountable
and economically viable Port |
More Information:
Charleston Port Related
Air Quality Issues