Port of Wilmington deal sunk

In spite of high praise for the governor and other Delaware leaders, Kinder Morgan is suspending its efforts towards a long-term lease agreement with the Port of Wilmington. 

“I think it’s dead” said Alan Levin, chairman of the Diamond State Port Corporation, who has been working with the Houston-based energy company exclusively since December 2012.

In a letter sent to Levin, Kinder Morgan blames the leadership of one particular union for the breakdown in negotiations.

“The leadership of Local 1694-1, principally Julius Cephas, is antagonistic to the point of making a productive relationship with our future work force impossible,” writes John Schlosser, president of terminals. 

“We haven’t seen a proposal, so I couldn’t negotiate with something I couldn’t see, and then we couldn’t negotiate with something the legislators hadn’t approved yet,” Cephas rebutted.

In January, the legislature passed Senate Bill 3, giving state lawmakers final say before the state-owned port enters into any kind of private-public partnership.

“I think [the legislation] just caused Kinder Morgan to rethink and decide on a timeout,” said state Sen. Robert Marshall, D-Wilmington West, the bill’s prime sponsor.

But Kinder Morgan says this timeout isn’t because of the legislation, it’s because of Cephas.

“This is not a labor issue. We’ve had discussions with the Teamsters, and 1694… we’ve had discussions,” said Allen Fore, Kinder Morgan’s spokesman. “I’m not saying we have agreements, I’m saying we have discussions of people willing to sit down at the table and talk. That’s not the case with Julius Cephas and 1694-1.”

At issue, the collective bargaining agreement for the International Longshoremen’s Association, Local 1694-1; it expires Sept. 30 of this year. Consequently, Kinder Morgan is reluctant to enter into any agreement with the state without first establishing a long term labor agreement.

“Because the last thing [Kinder Morgan] wanted to do was enter into a lease with the port, they take over Sept. 1, on Oct. 1, they have a strike,” said Levin.

“Unfortunately, I don’t think this is in the best interest of his membership, that they’re not exploring the opportunity to work with Kinder Morgan,” Fore said.

“There’s no blame here,” said Sen. Marshall. “There were outlines of ideas of would’ve, could’ve, should’ve and if, but nothing ever on paper. Mr. Cephas and other union activists, community leaders, ministers, elected officials had concern about that. And the deal ended because we never did have a formal, written agreement.”

Kinder Morgan’s proposal would have invested $200 million in private money for repairs and maintenance of the port.

“We’ve done as much as we can. We’re at an impasse. Unless something changes and the state is able to do something to move the process forward, we certainly are suspended,” Fore said. 

POWilmington Letter (03 07 13) (PDF) POWilmington Letter (03 07 13) (Text)