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From the state that brought you electricity deregulation - we know how that worked! - comes a new plan to surrender crucial public assets to a private corporation.

Today, the Maryland Board of Public Works votes on whether to lease Baltimore's premier port terminal to Ports America for 50 years. It's the final state approval the company needs to control the maritime artery that has nourished Baltimore for two centuries.

Pushed by Gov. Martin O'Malley, who wants the $245 million Ports America would put up for port and highway spending, the transaction shows every sign of getting approved. But O'Malley and the other board members, Comptroller Peter Franchot and Treasurer Nancy Kopp, should reverse steam.

The money is inadequate. A cap on Ports America's lease payments for Baltimore's Seagirt container terminal is grossly unfair to Maryland. Confidential documents distributed to policymakers exaggerate the future dollars Maryland would get.

Ports America was the only bidder, and there is no recourse if it doesn't create the promised 5,700 jobs. Ports America's owner, an outfit called Highstar Capital, will almost certainly sell the company to somebody else in a few years. That's how Highstar makes money.

And the deal hasn't had enough time to air. Fifty years is a long time. This thing was announced less than a month ago. There have been no public hearings. I had to plead with state officials to get even basic disclosures.

Maryland should learn from Virginia, which has halted a similar deal to privatize state ports so policymakers could consider it at length.

"We conducted a two-year study with world-class economists," says Virginia Del. Harry R. "Bob" Purkey, a Republican from Virginia Beach who helped slow the process. He's worried, he said, that Richmond would "allow these ports to be sold at a fire-sale price" to plug holes in the state budget.

Governors across the country are doing these "public-private partnerships," selling or leasing ports, highways and other public assets. They get a ton of cash up front. And if the arrangements run into trouble, they're out of office or even dead.

There's no reason the deals can't work. But they need to be fair.

State officials defend the price to be paid by Ports America, saying it reflects a fair "multiple" of Seagirt's profits. But profits in the worst economy since the 1930s mean nothing about how much Seagirt can make between now and 2060.

Worse, future lease payments to Maryland are tied to inflation - but only up to 3.5 percent a year.

Inflation has averaged 4.1 percent the last half-century. With Washington amassing debt like a subprime mortgage borrower, inflation probably will average even more than 4 percent in the future. Whoever owns the Seagirt lease in 2040 can crank up wharfage fees while paying poor Maryland a pittance in rent. So there's a big risk Maryland won't share in the port's growth the way Highstar is promising.

(An inflation cap of around 3.5 percent is "very conventional in the port business," says Leif Dormsjo, chief of staff for the Department of Transportation.)

In addition to $245 million for widening a Seagirt berth and for roads, Ports America has promised to pay more than $1 billion in lease fees, maintenance costs and other items over the 50 years.

But this sounds more impressive than it should. A dollar in 2060 is worth a lot less than a dollar today. According to James Koch, an economist at Old Dominion University who is advising Virginia's Legislature in its port contract, the "discount rate" used by the Maryland Port Authority to calculate the deal's worth in today's dollars is far from what he considers the correct value, making the deal look much more generous than it is. (I'll put details on my blog.)

"Virginia's been a little more open in distributing numbers than Maryland, but not much," said Koch. "These are such huge financial deals. One wonders whether it's not the best course of action to have some independent people look at this."

It's complicated stuff. But it matters. Maryland is basically selling one of its most important businesses to a very sophisticated private party. Highstar was once called AIG Highstar - yes, that AIG. (American International Group's insurance wing is a "passive investor" in Highstar funds, a Highstar spokesman said.)

These guys know exactly what they're doing. I'm afraid the state has little idea.

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