Letter confirms Teachers’ US$57 million commitment for long-term investment, growth in Port of New York and New Jersey

Port Authority failure to grant consent would reduce jobs, economic development

Ontario Teachers’ Pension Plan (Teachers’) today sent a joint letter with Orient Overseas (International) Limited to the Port Authority of New York and New Jersey (”Port Authority”) confirming its commitment to long-term investment, economic development and job growth in the Port of New York and New Jersey. A copy of that letter follows this news release text.

The letter to the Port Authority makes a clear long-term commitment by Teachers’ to the Port of New York and New Jersey and its future growth. The proposal confirms Teachers’ commitment to invest up to $57 million in additional capital expenditures at the New York Container Terminal and the Global Container Terminal in Bayonne, NJ, at least $17 million of which will be invested in the New York Container Terminal. In addition, the Port Authority will receive $5 million for its future use in connection with the terminal. The capital expenditure commitment provided for in the proposal is almost 50 percent more than the $40 million commitment the Port Authority received from AIG in the recent Port Newark Container Terminal transaction, even though the New York container terminal on Staten Island lease is half as long.

“The proposal presented to the Port Authority of New York and New Jersey demonstrates our long-term commitment to the future and growth of the port,” said Jim Leech, Senior Vice-President, Teachers’ Private Capital. “The Port Authority’s focus on short-term enrichment puts the economic development of the area at risk, and eliminates jobs that would be created as a result of our investment.”

The Ontario Teachers’ Pension Plan is an independent corporation responsible for investing the US$93 billion fund (CDN$106 billion) and administering the pensions of Ontario’s 271,000 active and retired teachers. Its Infrastructure Group focuses on the acquisition and long-term retention of low-risk assets with return profiles that are strongly correlated to inflation. The combined value of the plan’s infrastructure and timber, and private equity assets is approximately US$14 billion.

Following is the full text of the letter sent today:

By Facsimile

Port Authority of New York and New Jersey
225 Park Avenue South
New York, NY 10003
Attention: Admiral R.M. Larrabee

Re: Change of Control of New York Container Terminal Inc.

Dear Admiral Larrabee:

We are writing to confirm our proposal to the Port Authority of New York and New Jersey (”PANYNJ”) in connection with the proposed acquisition (the “Acquisition”) of New York Container Terminal Inc. (”NYCT”) by Ontario Teachers’ Pension Plan (”OTPPB”) from Orient Overseas (International) Limited (”OOIL”). We believe our proposal is both fair and reasonable and will provide consideration to PANYNJ comparable to what it recently received from the buyer of Port Newark Container Terminal (”PNCT”) taking into account PNCT’s greater size and much longer lease.

Under our proposal, if PANYNJ consents to the Acquisition then at the closing of the Acquisition:

• PANYNJ will receive $5 million in cash for its future use in connection with NYCT, and
• OTPPB will enter into a written agreement (the “Capital Expenditure Agreement”) with PANYNJ under which OTPPB will agree to make an aggregate of $57 million of capital expenditures with respect to NYCT and the Global Container Terminal in Jersey City, New Jersey (”Global”), of which at least $17 million will be made with respect to NYCT.

The terms and conditions of the Capital Expenditure Agreement, and the obligation to make capital expenditures thereunder, shall be the same as those in the comparable written agreement that PANYNJ recently entered into with the buyer of Port Newark Container Terminal (”PNCT”) and subject to receipt of all required permits and authorizations.

With respect to PANYNJ’s other consent requirements, OTPPB is generally prepared to make substantially the same concessions as were made by the buyer of PNCT.

In addition to the foregoing, OTPPB is willing to commit to significant increases in terminal capacity at both NYCT and Global as part of negotiations with PANYNJ with respect to an extension of the lease at NYCT and a lease of land at Global. OTPPB is willing to start such negotiations promptly after the closing of the Acquisition.

Our proposal demonstrates our commitment to investment and growth in the Port of New York and New Jersey and is consistent with the undertakings recently required by PANYNJ from the buyer of PNCT, a larger port terminal with a much longer lease. OOIL and OTPPB hope that PANYNJ will facilitate this growth by accepting this proposal.

Sincerely,

Orient Overseas (International) Limited	Ontario Teachers Pension Plan Board
By:/s/ Nicholas Sims	By:/s/ Stephen Dowd
Name: Nicholas D. Sims	Name: Stephen Dowd
Title: Chief Financial Officer	Title: Vice President, Infrastructure
cc: Duncan C. McCurrach
William L. Rosoff

Contact:

Deborah Allan
Director, Communications and Media Relations
Ontario Teachers’ Pension Plan
(416) 730-5347
deborah_allan@otpp.com

Ontario Teachers Fund