Dubai buys itself time by ringfencing US ports
Saturday 25 February 2006
The company, owned by the royal family of the United Arab Emirates, was also hit yesterday by additional legal threats.
The Port Authority of New York and New Jersey, which oversees one of the ports involved, said it would go to the courts to break the lease that P&O currently holds to operate there.
DP World is also being sued in the US to end the P&O concession at the port of Miami by the joint venture partner Eller & Co. Yesterday Eller filed a case in the UK too, at the High Court in London, to block the deal.
The takeover, which involves five US ports, faces bi-partisan opposition in the US. Critics of the deal have protested that allowing an Arab company to take over US ports presents a security risk to the US.
It emerged yesterday that Republicans will meet on Tuesday next week to plot strategy. Dennis Hastert, the Illinois Republican who is the House of Representatives Speaker, has called for a moratorium on the deal and thought the delay announced by DP World was a "good move". He added that Mr Hastert would meet with House Republican leaders on Tuesday to decide on the next steps. Republicans and Democrats have suggested introducing legislation that would block the deal.
The Bush administration also welcomed the delay after an apparent weakening in its previous rock-solid support of the deal. Karl Rove, a top presidential adviser, said on Thursday night that the security concerns about the takeover were "entirely appropriate" and that Congress should have been briefed more fully about the transaction.
DP World said it would "segregate" P&O's operations while it consults further with the Bush administration, Congressional leadership and port authorities over security issues.
It will mean that although DP World will assume ownership of the US ports but it will not take on management control immediately. The P&O takeover is scheduled to complete in early March. The US ports represent less than 10 per cent of the P&O worldwide ports portfolio.
Ted Bilkey, the chief operating officer at DP World, said that the company had worked with US customs, Navy and security officials at its ports in Dubai for years "to ensure protection of the United States". He added: "The reaction in the United States has occurred in no other country in the world. We need to understand the concerns of the people in the US who are worried about this transaction and make sure that they are addressed to the benefit of all parties. Security is everybody's business."
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