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February 21, 2006 Growing problems for DP ports deal
Politicians and public officials from both major parties are expressing concern about turning over the management of operations at six U.S. ports by Dubai Ports World as a result of its acquisition of P&O. P&O's worldwide operations include contracts to operate port facilities in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. Among those worried by the DP World takeover at those ports is New York Republican Pete King, who is Chairman of the House Homeland Security Committee. Yesterday he told MSNB's Tucker Carlson: "We canÔt let this to go forward. We canÔt allow the major ports in our country to be under the control of a company which comes out of Dubai, which comes out of the United Arab Emirates and which has not been fully investigated and fully vetted. " DP World is owned by the Emirate of Dubai's Ports, Customs and Freezones Authority. The company took its present name following its January 2005 acquisition of CSX World Terminals (CSX WT), the international terminal business of CSX Corporation. This acquisition gave DP World major operations in Hong Kong and China as well as operations in Australia, Germany, the Dominican Republic and Venezuela. It's latest expansion move has been its take-over of the venerable P&O, whose P&O Ports unit operates 29 container terminals and logistics operations in over 100 ports and which has a presence in 19 countries. The take-over of the American P&O contracts by DP World was approved by the Bush administration after a routine evaluation by the Committee on Foreign Investment in the United States, an inter-agency panel set up to assess the security implications of foreign acquisitions of U.S. assets. It is chaired by the Secretary of the Treasury--John W. Snow. Before joining the Bush Administration in February 2003, Snow was Chairman and CEO of CSX Corporation. Snow has now been urged to take a second look at the deal in a letter sent him by Senators Chuck Schumer, Tom Coburn, Frank Lautenberg, and Chris Dodd plus Reps. Chris Shays, Vito Fossella and Mark Foley. They note that, except for cargo screening functions performed by the Department of Homeland Security, the port operator is responsible for securing cargo coming in and out of the port, the port facility itself, and the hiring of security personnel. Politicians from both major parties have been on TV talk shows criticizing the take-over. "It's unbelievably tone deaf politically at this point in our history," Senator Lindsay Graham, R. S.C., said on Fox News Sunday. "Most Americans are scratching their heads, wondering why this company from this region now," Yesterday, New York Governor George Pataki said he is "very concerned with the purchase of Peninsular & Oriental Steam by Dubai Ports World" and added that he had "directed the Port Authority of New York and New Jersey to explore all legal options that may be available to them in regards to this transaction." Meantime, Maryland Governor Robert Ehrlich said he was "very troubled" that state officials got no advance before the Bush Administration approved the DP World takeover. The state of Maryland is now considering its options--which could include voiding the contract for the Port of Baltimore. The DP deal is already the subject of one court action. Miami's Continental Stevedoring & Terminals Inc., has filed suit in Florida saying it will become an "involuntary partner" with Dubai's government under the sale.
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