Financial Statement Audit – Fiscal Year Ended June 30, 2025

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Report Summary

Background

The Office of Auditor of Accounts presents a financial statement audit of the Diamond State Port Corporation (DSPC).  This audit was conducted for Fiscal Year ended June 30, 2025.  The primary objective of a financial statement audit is to provide reasonable assurance that the financial statements present fairly, in all material respects, the financial position of an entity.

The DSPC is a separate entity that is reported as part of the State’s overall financial statements.  DSPC serves the State by operating the Port of Wilmington, which is a full-service deep-water port and terminal.

This engagement was conducted in accordance with 29 Del. C. §2906 and 29 Del. C. §8786.

Key Information and Findings

The 2025 and 2024 comparative financial statements of Diamond State Port Corporation (DSPC) reflect the concession agreement as it currently exists between DSPC and Enstructure.  Although the agreement is referred to as a “concession,” it does not meet the definition of a concession agreement per Governmental Accounting Standards Board Statements 60, Accounting and Financial Reporting for Service Concession Arrangements, and 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements.  Specifically, the Port operator/transferee (Gulftainer and Enstructure) determines the rates that can be charged to the customers of the Port. Rather, under the Statements, it is required to be accounted for as a lease. 

Effective December 23, 2024, the Corporation, entered into a Joint Development Agreement (JDA) with Enstructure to jointly develop Corporation-owned land located at the Edgemoor Property on the Delaware River into a commercial marine terminal facility.  As of June 30, 2025, the current funding commitments for the JDA total $530 million, allocated as follows:

Entity	Phases 1 and 2	Phase 3	Total
DSPC	$215,000,000	–	$215,000,000
Enstructure	$150,000,000	$115,000,000	$265,000,000
Federal	$50,000,000		$50,000,000
Total	$415,000,000	$115,000,000	$530,000,000

The State approved a one-time transfer of $195 million from the State of Delaware Escheat – Special Fund on April 30, 2024, to a State appropriation titled Maritime Terminal Facility.  The transfer, deemed for the “State Maritime Finance Grant”, required (i) the recommendation of the Secretary of Finance, (ii) concurrence of the Co-Chairs of the Capital Improvement Committee and (iii) the concurrence of the Director of Management and Budget. Upon execution of the JDA, $195 million was transferred from the State to DSPC on January 22, 2025.

The Restricted Cash and Unearned Revenue – JDA offset on the DSPC Statement of Net Position for the fiscal year ended June 30, 2025. The funds are held in a commercial bank, in a segregated collateralized interest-bearing account, under the control of the DSPC Treasurer and the State Controller General. The expectation is the grant will be recognized as revenue when it is expended on development in future years.

Upon the completion of Phase 1 of the Delaware Container Terminal Joint Development Agreement, the term of the Agreement will be reset to 55 years. The amendment provides for two 15-year extensions of the Agreement if Enstructure meets its capital contribution commitment under Phase 1 of the Joint Development Agreement.

DSPC transferred the right to commercially operate the Port of Wilmington and, subsequently, became a landlord with certain oversight and consent rights during fiscal year 2019.  Since then, DSPC utilized staff from the State of Delaware Departments of State and Finance while outsourcing other services to contracted vendors.  The operating expenses of DSPC for the fiscal years 2020 – 2025 are as follows:

DSPC Expense	2020	2021	2022	2023	2024	2025
Legal Fees	248,465.10	305522.99	582218.14	1561743.29	1310724.79	1177952.47
DSPC Consultants	500,618.11	359882.7	562705.62	602758.41	225777.46	532707.85
Business Activities/Meetings	129,442.80	148807.1	138683.08	107812.76	145289.9	268940.43
Accounting & Audit Fees	121,763.29	69162.84	50959.06	61999.06	87598.12	74096.39
Insurance	56,066.00	42108	115323	93738	53913.8	55194
Banking Fees	2,648.12	2648.12	2706.04	3398.2	39533.67	205023.29
Occupancy Costs	14,410.69	5188.06	29005.39	80760.71	2642.93	6044.54
Permits/Licenses/Fees	3,800.00	1300				195
Miscellaneous Fees & Services	104,250.09	-1090	25340.98	33265.74		6938.77
IRS Penalty					342947
	1,181,464.20	933529.81	1506941.31	2545476.17	2208427.67	2327092.74