WASHINGTON : A Dubai government owned company said it will sell
its US port operations in a move that spared President George W.
Bush a showdown with Congress.
Dubai Ports World (DP World) made the announcement after leading
Republicans told Bush that Congress would block the takeover.
"Because of the strong relations between the United Arab Emirates
and the United States and to preserve that relationship, DP World
has decided to transfer fully the US operations of P and O Ports
North America to a United States entity," said a company statement
read by Republican Senator John Warner.
"This decision is based on an understanding that DP World will have
time to effect the transfer in an orderly fashion and that DP World
will not suffer economic loss," the statement said.
The company said it was looking forward to working with the US
Treasury "to implement that decision."
Details of the transfer were not immediately disclosed but while US
politicians were relieved, business groups immediately warned of a
potential backlash against US economic interests.
Warner read the company statement as the Senate began debating
legislation on blocking the deal, which would have given DP World
operational control of ports in Baltimore, New York, Miami, New
Jersey, New Orleans and Philadelphia.
DP World said that the UAE prime minister, Sheikh Mohammed bin
Rashid al-Maktoum, had advised the company that the assets disposal
was "the appropriate course to take" in the interest of the UAE and
the US.
The company previously had agreed to a new 45-day review of the
deal by US authorities as opposition to the transaction
mounted.
The announcement was made as DP World earlier said it had completed
the 6.9 billion dollar takeover of British firm Peninsular and
Oriental Steam Navigation Company (P and O).
Before the statement was issued it became clear the Senate would
back fierce and widespread Republican opposition to the deal.
Members of Bush's Republican Party and opposition Democrats had
joined forces to block the plan, citing security concerns.
The White House earlier had threatened to veto any legislation that
stopped the deal. But the administration's hand was forced after
the House of Representatives Appropriations Committee voted 62-2
Wednesday to prevent DP World from acquiring control of the US port
operations.
The US Chamber of Commerce expressed concern at potential reprisals
against US companies by foreign governments over the affair.
"We need to have more access to more markets abroad, not less
access," Bruce Josten, executive vice president for government
affairs at the US Chamber of Commerce, told AFP.
But Representative Peter King, one of the Republican lawmakers who
went to see Bush on Thursday, rejected the concerns.
King highlighted the UAE's previous recognition of the Taliban
government in Afghanistan and insisted there was a difference
between allowing a British company and a UAE company to control US
ports.
"We have to deal with different countries based on different
perspectives," he said.
US Attorney General Alberto Gonzales defended the administration's
stance, calling the United Arab Emirates a "terrific ally" that had
provided the US military access to its airfields and ports.
He cited the case of Richard Reid, a British national convicted of
trying to bomb a US airline with explosives hidden in his shoes.
"That doesn't mean that we're not going to do business with British
companies," Gonzales told CNN's "The Situation Room."
In Wednesday's House committee vote, Republicans had voted en masse
to oppose the deal, citing national security concerns over an Arab
company having control of US facilities.
The size of Republican backing for the House measure was
highlighted by many political commentators.
With midterm congressional elections looming in November, many
Republicans fear they are losing their advantage over opposition
Democrats on the issue of national security.
The company's announcement nevertheless failed to satisfy
Democrats, who said security at US ports remained in
jeopardy.
Democratic Senator Chuck Schumer, a prominent deal critic, said
despite the "scent of victory," the Dubai company's move would have
to be closely examined.
"The devil is in the details," he said.
- AFP/ir
