Skip to comments.DP World defuses ports row
Posted on 03/09/2006 8:01:36 PM PST by PrinceOfCups
Dubai: Dubai Ports World said yesterday it will transfer operations of six US ports to an American company in order to preserve the "strong relationship" between the US and the UAE. The move came after a directive from His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
"DP World will transfer fully the US operations of P&O Ports North American, Inc., to a United States entity," Edward Bilkey, CEO of DP World, said in a statement. "This decision is based on an understanding that DPW will have time to effect the transfer in an orderly fashion and that it will not suffer economic loss."
P&O deal clinched
The announcement came as the Dubai company finally clinched its takeover of P&O yesterday. Stock of the publicly-traded P&O was delisted after DP World finalised the purchase.
The Dubai-owned company is now the world's third-largest port operator, with 45 terminals worldwide.
Following the deal, the Dubai-owned company said yesterday it is looking to grow. "The combined business allows us to offer our customers an enhanced global network of top quality terminal services," said Sultan Bin Sulayem, chairman of DP World.
Now, where do we find a US company that can manage the terminals? Make it a gov't function? And should they take over the terminals now managed by Hong Kong, Singapore and Denmark?
UAE has the last laugh, all right.
The UAE company would never have let the U.S. controversy derail the deal. The U.S. port operations were a very small component of the $6.8 billion acquisition. DPW was primarily interested in the P&O operations in Europe, India, and Australia.
"A leading congressional critic of the ports deal, Rep. Peter King, applauded the decision but said he and others would wait to see the details. It would have to be an American company with no links to DP World, and that would be a tremendous victory and very gratifying, said the New York Republican, chairman of the House Homeland Security Committee."
Now, where do we find a US company that can manage the terminals?
Dubai America Inc. (wink)
This ain't over. I think this is just starting. There will be such a backlash and future issues resulting from this that it will occupy and delay congress from acting on other more important issues.
What happened to the 45 day review that was agreed upon?
Like everything else from the antis, it was a lie.
Paragraph one includes the far less volatile expression "seeking to manage some terminal operations at six American ports." Ah, the MSM, it wasn't trying to mislead us now, was it?
Does he mean that DP World can't invest in infrastructure even indirectly, nor can it participate in profit taking, even as a shareholder? "NO Links" - what does THAT mean?
(b) Notwithstanding any other provision of law or any prior action or decision by or on behalf of the President under section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170), the acquisition of any leases, contracts, rights, or other obligations of P&O Ports by Dubai Ports World or any other legal entity affiliated with or controlled by Dubai Ports World is hereby prohibited and shall have no effect.
Still leaves me wondering about the details of "lack of affiliation," but it seems "total absence of afiliation" is the object. That is, no right to invest or take profits even as a JV partner with less than controlling financial interest and no rights of management.
That's more strict that Mexico's prohibition on foreign ownership of companies and property.
The only way to do that would be to have the US gov't pay a co. to take over. American cos. decided years ago that this isn't a profitable business for them.
Most of us don't really like the idea of nationalizing private enterprise.