GULFPORT (AP) — Gov. Haley Barbour supports creating a large transportation hub at Palmer’s Crossing to handle increased container traffic from a $1 billion expansion of the Port of Gulfport.

Barbour said the proposed rail yard near Hattiesburg would help the massive State Port at Gulfport project, which Barbour said is unprecedented for the state.

‘‘My grandchildren will look back, and this will be the largest economic development project in the history of Mississippi, and whatever is second won’t be close.’’ Barbour said in an interview with The Sun Herald.

Barbour said the $5.25 billion expansion of the Panama Canal, which could be complete sometime around 2014, will create many new opportunities for the port, which could handle a large portion of container traffic, much of which is currently sent to the West Coast, and then shipped by rail to the rest of the country.

Barbour said the West Coast ports were often congested, and before the recession ships sometimes had to wait several days to get a berth. He said that doesn’t happen as much during the recession, but it should pick up again as the economy improves.

Barbour supports creating a large intermodal transportation yard at Palmer’s Crossing, where the container cargo that comes into ports at Gulfport, Mobile and New Orleans would be sorted and then shipped elsewhere.

There’s a clear advantage to the site, as the Norfolk Southern railway out of New Orleans, the Canadian National out of Mobile and the Kansas City Southern out of Gulfport all run through that area.

The site is also relatively close to Interstates 10, 59 and 55, which would be beneficial for trucking.

Port Executive Director Don Allee said Port of Gulfport officials support the Palmer’s Crossing idea.

‘‘You can go anywhere in the United States by rail once you get to this very strategically placed Palmer’s Crossing,’’ Allee said.

The Palmer’s Crossing intermodal facility might look something like one near Chicago, which has heavy rail traffic, Barbour said. CenterPoint Intermodal Center is on about 2,500 acres, including a 770-acre intermodal yard. The Illinois project represents a $1 billion investment and the company said it could create as many as 8,000 jobs there, according to the CenterPoint Web site.

The governor said the site near Hattiesburg would be a better option than another plan he has heard, which would turn a Caribbean island into a station for container cargo, which would be sorted and sent to other places.

‘‘We can do that at Hattiesburg in an enormously efficient way,’’ Barbour said. ‘‘Why would we not do that as a country instead of letting all these jobs go to some island out in the Caribbean and then do out there what we can do?’’

Significant railway upgrades would be needed to make the Palmer’s Crossing plan happen, including modifying the rails to allow the cargo trains to run over 50 mph and containers to be double stacked. The upgrades could cost around $75 million, which the governor said may come from public and private funds. He said the rail improvements could be done in less than a year.

The governor said Houston’s port has a planned $1.2 billion expansion. Barbour said there is also opportunity for more container traffic at Mobile and Tampa, but Barbour is convinced Gulfport offers the best possibility for a large expansion. Gulfport is also closer to Chicago and the Midwest than other U.S. maritime ports, Barbour said.

New Orleans’s port is ‘‘wonderful’’ for grain and dry cargo, Barbour said, because of its strategic location on the Mississippi River, where those items float southward before being shipped from the Crescent City to other parts of the world. He expects that will keep New Orleans’ port busy in the future.

One major complication to the port plan is that on average it takes between seven and nine years to get the necessary permits for the work at Gulfport, but the state wants that done in four years.

Barbour said gaining approval for filling and elevating the piers should not be entangled with making the channel larger and deeper, which could protract the approval process.

Often public comment periods on large expansion projects may take over 90 days, but Barbour said those timelines are usually more customary than actually written in law. He said the state will request a faster process when possible.

‘‘We’re trying to get it down to four years, which seems to me just almost laughable, but if we can get it to four years, we are going to be pretty successful,’’ Barbour said.

The dredged materials from the channel may also be suitable to use at the piers at the Port or for a large planned restoration of the barrier islands. Congress recently appropriated $439 million to restore those islands, which were heavily damaged by Hurricane Katrina, and help protect the coast from storms. Barbour said using some of the dredged materials from the Port could help lower the cost of the barrier islands work.

The alternate purposes for the dredged materials likely wouldn’t hold up the process much, Barbour said, because oversight agencies understand officials want the Gulfport expansion done quickly because the Panama Canal work will be done in a few years. The idea is for the port to take in container traffic generated with the Panama Canal expansion.

Barbour also said the port expansion could free some property to be used for other purposes, which could include a cruise ship terminal, but sometimes those lose money. Often cruise companies want the government to build the terminal and they pay a fee to use it.

Barbour said a cruise ship terminal could create many new jobs, but the cost to taxpayers has to be a major consideration. He said if tourism officials could get passengers to stay in South Mississippi an extra day, which he said usually isn’t the case for most on cruises, it could have a significant economic impact.

State Rep. Diane Peranich, D-Pass Christian, has said getting the freezers at the port replaced, which would put many back to work, should be a higher priority. Barbour said the Federal Emergency Management Agency contends the refrigeration systems there are equipment, rather than buildings, so they wouldn’t be eligible for relief funds. The state contends the buildings should be covered. FEMA and the state are about $20 million apart.

‘‘We say in the modern world, if you are going to build the facility, it would all be one thing,’’ Barbour said. ‘‘That’s the whole deal, do they owe us $110 million or do they owe us $90 million. Are the freezers equipment or are they buildings?’’

Much of the government funding for the port has been federal dollars. The U.S. Department of Housing and Urban Development approved the port plan to use $570 million in federal Katrina relief funds. The Steps Coalition says the funds should be used on housing, but the state believes its housing programs, which cost about $4 billion of the $5.5 billion in Katrina relief money, will meet the post-Katrina need.

A federal judge recently dismissed a lawsuit, which had been filed by the NAACP and others that sought to block the funds being used on the port.

Mississippi House Transportation Committee Chairman Warner McBride, D-Courtland, believes lawmakers from across the state will support the plan, especially since it’s expected to help other areas of the state.

‘‘We want people from all over the state to be onboard with it,’’ McBride said.

Barbour believes most lawmakers will ultimately support the plan.

‘‘I can’t imagine anybody from Yazoo City or Booneville or anywhere else who wouldn’t think this is a great thing for Mississippi or the country,’’ Barbour said. ‘‘The country needs the capacity.’’