The west coast’s public ports have staked their current and future success on extraordinary investments in port infrastructure and facilities funded primarily through port revenue bonds rather than taxpayer funds.   To date, west coast ports have invested more than $12 billion in their own infrastructure.

In addition, west coast ports are investing or in the process of planning to invest an additional $4.7 billion in their terminals and other infrastructure supporting their seaport operations.  In California, where a full 35% of all national port infrastructure development spending will take place, this new investment is in addition to development that has created nearly $6 billion in equity at the ports. 

The ports estimated that nearly $2.7 billion worth of these new projects will be paid for through existing revenues and user fees, and nearly $1.24 billion will be leveraged by future user fee revenues in the form of additional revenue bonds.  One by-product of this approach is the ability of our ports to rely on a proven model of private revenues, user fees and tariffs to finance infrastructure development through commercial debt instruments.  This “partnership” has enabled the ports to shore up cash flow and help them face liquidity constraints without relying on the good faith of the public.  As a result, only a small amount of capital expenditures are financed through General Obligation bonds, which means there are extremely low levels of exposure and risk to the public at-large on public debts.

Port revenue bonds are retired through revenues, user fees and tariff charges paid principally by Pacific Merchant Shipping Association member companies and are beneficial to the public and private sectors.  For example, even though California’s container ports are carrying close to $3.5 billion in revenue bonds, port revenues are growing faster than expected, paying down debt, building public equity in public infrastructure without public dollars or risk.  As a model public-private partnership, these port infrastructure investments have come to symbolize how well-planned and beneficiary-financed transportation infrastructure can benefit both commerce and the public alike.