Watco wants to invest $440K at port, lease extension

Published 7:00 pm Monday, December 10, 2018

Watco, which provides rail, barge and truck services at the Port of Vicksburg, is proposing to invest $440,000 in upgrades in return for a five-year extension on their existing lease and terminal contract.

The current lease is scheduled to expire in January 2021. The extension would run through January 2026.

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Pablo Diaz, president and CEO of the Vicksburg Warren Economic Development Partnership, told the Warren County Board of Supervisors during their work session Monday, Watco is proposing $250,000 for the T-Dock Winch System, $100,000 in Warehouse No. 4 improvements, and $90,000 in railroad crossing improvements on the north side of the terminal.

All of the improvements would remain the property of Warren County.

Diaz said Watco is committed to finishing the improvements before 2021.

Diaz said that as a sign Watco is a good partner with Warren County, he asked Watco to match an MDOT grant and they matched the $100,000 the port obtained for improvements on Warehouse No. 3.

“The expectation, because of the improvements to Warehouse No. 3 and these improvements, is the tonnage will go up,” Diaz said. “When the tonnage goes up, everyone makes more revenue.”

Supervisor Charles Selmon asked what prompted the five-year extension.

“Basically, this was a request from Watco,” Diaz said. “They see opportunity to bring more tonnage if they can make these improvements.”

Diaz said the T-Dock system, in particular, would allow Watco to move barges more quickly.

“It would allow them to move barges in and out faster than they can right now,” Diaz said. “In reality, they think this can bring them more revenue faster, but they want to negotiate an extension for their investment.”

Diaz said historically, previous tenants have not invested these types of improvements at the port.

Selmon agrees the county will make more revenue with a tonnage increase, the county would also be “land-locked for the tonnage price” since there is no rate increase.

“They’re going to make more money because they’ve got better facilities,” Selmon said. “They’re going to get the lion share of the investment.”

Diaz agreed and added Watco believes it would take about five years for them to recoup the cost of their investment.

The proposal is expected to be on the Warren County Board of Supervisors agenda during their regular board meeting Monday at 9 a.m. on the third floor of the Warren County Courthouse.