Posted on 03/10/2006 2:06:13 PM PST by syriacus
A Dubai-based company abandoned its effort to take over some operations at six major U.S. seaports, including the Port of Miami-Dade, after Congress made clear it would block the deal.
WASHINGTON - With President Bush unable to contain a Republican congressional rebellion, a company owned by the United Arab Emirates vowed Thursday to turn over its just-acquired operations at six major U.S. port terminals, including the Port of Miami-Dade, to an American entity.
One possible buyer: Fort Lauderdale-based Eller & Co., which has had a longtime role in operating the Port of Miami-Dade.
The surprise move came after congressional leaders told Bush on Thursday morning that there was no way to stop lawmakers from blocking Dubai Ports World's takeover of terminal operations at the ports.
Republican and Democratic lawmakers reacted cautiously to the company's apparent surrender, saying they needed to learn more about the details before abandoning their attempts to block DP World.
DP World obtained the terminals as part of its acquisition of Peninsular & Oriental Steam Navigation Co., a British firm. That transaction, which the Bush administration approved in January, aroused a public furor that drove Congress into open conflict with the White House.
It was an Eller & Co. subsidiary, Continental Stevedoring & Terminals, that filed two lawsuits to stop the sale.
Eller has partnered with P&O Ports in running the Port of Miami Terminal Operating Co., which handles about half of the cargo containers that move through the Miami port. The company objected to becoming an ''involuntary partner'' with DP World.
''We are certainly encouraged by what the statement said,'' said Eller attorney Michael Kreitzer. ``We think we are one of the companies [who could buy it]. We have been in the business for 70 years. We could do it.''
A RETREAT
DP World's announcement was an extraordinary retreat that signaled a shift in the power relationship between the White House and Congress. Bush has been unused to losing. But this time, the Republican-led House of Representatives, which has been a rubber stamp for the president for the past five years, was the first to revolt.
Republicans were furious when the president promised last month to veto any legislation that blocked the deal. Congress ignored Bush's threat, and a 62-2 vote to block the deal by the House Appropriations Committee on Wednesday left no doubt that Congress would override a veto if the president dared to employ one.
After Thursday's meeting of congressional leaders with Bush at the White House, DP World's chief operating officer, H. Edward Bilkey, surprised lawmakers when he issued a statement promising that the company would divest itself of its U.S. terminals.
Nevertheless, Senate Democrats pressed ahead with attempts to block DP World's takeover, and House leaders weighed whether to proceed as well.
Critics of the original deal weren't backing away from congressional action.
''I'm skeptical,'' said Rep. Mark Foley, a Palm Beach County Republican. ``I'd prefer [legislation] go through because it gives us a safeguard.''
Likewise, Rep. Jerry Lewis, R-Calif., the chairman of the House Appropriations Committee, said he didn't intend to remove the ports provision from an emergency spending bill for hurricane relief and the war in Iraq.
Republican Rep. Ileana Ros-Lehtinen of Miami added: ``Congressional plans are to move forward with the appropriations language next week, which kills the transaction. Just to make sure.''
She also questioned whether the U.S. entity ``would be a mere shell company.''
All along, Dubai Ports World maintained it posed no threat to U.S. security. The company became a world player in port operations when it purchased international terminals -- mostly in Asia -- from railroad giant CSX Corp. in 2004.
DP World would have acquired terminals at Miami, New Orleans, Baltimore, Philadelphia and New York/New Jersey as well as some stevedoring operations at 15 others.
Some lawmakers noted that the company's statement stressed its desire that ''DP World will not suffer economic loss'' in transferring its U.S. operations.
''That means to me they would have to be made whole in a situation where any legitimate investor would actually presume that they could get a real good price because it's a distressed sale,'' said Sen. Jack Reed, D-R.I.
``They're selling out because they can't operate the franchise.''
The question that loomed late Thursday was who would buy the U.S. interests, and whether the firm would sell the assets in pieces.
SEVERAL FIRMS?
Michael Hopkins, the vice president of Crowley Liner Services at Port Everglades in Florida, said he expected DP World to sell its interests to several firms rather than one large operator.
''For Eller, this is a great opportunity,'' Crowley said. ``I see more locally owned stevedoring companies jumping in.''
Some said Maher Terminals, which already operates in the Port of New York/New Jersey, might buy P&O's interests there. Other candidates include Oakland-based Marine Terminals Corp. and Seattle-based Stevedoring Services of America.
''To be honest, I have no idea,'' said Steve Erb, who manages P&O ports operations in Miami. ``I can just say that the five largest terminal operators in the world aren't American.''
Despite losing the U.S. ports, DP World still becomes one of the world's largest terminal operators. Its acquisition of P&O gives it ports throughout India and Asia, and it already owns some terminals in the Caribbean and South America.
Miami Herald staff writer Steve Harrison reported from Miami; Knight Ridder correspondent James Kuhnhenn and Miami Herald staff writer Lesley Clark reported from Washington.
What? But, but, but ... there are absolutely no American companies that can do this sort of thing. None whatsoever. I was repeatedly assured of this "fact" by supporters of the DP World deal, so this just can't be true.
There's always been American companies that could do the job, they just didn't want the headaches of dealing with the likes of the Longshoremen.
"they just didn't want the headaches of dealing with the likes of the Longshoremen."
Oh, so the US companies that I was repeatedly assured did not exist, actually do exist, and they're somehow managing to avoid working with longshoremen in the terminal operations that they manage?
Actually, no American company made an offer to the British firm to buy the port contracts.
The Congress needs to pass a law about the unions that will not allow them to put these companies out of business. Just like they did with not letting people who work for Homeland Security unionize...remember that? It cost the Democrats heavily when it looked like they were on the side of the unions and not security. Congress just needs to do the same thing here.
"They were really trying to lay low on this one and I can understand why some would never thought they existed."
No they weren't. Eller & Co. was pursuing legal action because the terms of their contract concerning a joint venture with P & O were breached due to the impending sale to DP World.
And I do wonder, just how Eller & Co. is supposedly avoiding the longshoremen's union in their existing, leased terminal operations. Intuition says that they are not.
Too late on this one. Whatever American company gets it now will be out of business in 3 years or sold to another foreign company.
You may be correct, my only point is that it doesn't have to be that way if Congress would act.
"Actually, no American company made an offer to the British firm to buy the port contracts."
I understand that the price offered by DP World, reportedly $6.8 billion, so far outstripped anything anybody else was willing to pay, or even though could be made profitable, that everyone else dropped out of the bidding.
Stevedoring Services of America runs 49% of a terminal at the Port of Long Beach.
A Red Chinese government company runs 51% of that terminal in the Port of Long Beach
The Red Chinese Company (COSCO) is considered to be an arm of the Chinese military.
COSCO is the second largest (container?) shipping company in the world and has been involved in smuggling arms into the US, shipping arms to Cuba, and transporting sophisticated weaponry components to Pakistan in 1998.
Clinton's special treatment of the Chinese government's shipping company, COSCO, didn't hurt him or Hillary, even though a COSCO ship was used to smuggle weapons into the US and there was enough of a Clinton-Beijing connection to be named "Chinagate."
* COSCO got guarantees for loans for ships built in Mobile Alabama
* The Clinton Administration allowed COSCO's ships access to our most sensitive ports with one day's notice rather than the usual four
* COSCO nearly got a Clinton-arranged lease on the Long Beach Navy Base
* COSCO currently runs at least one terminal, in the Port of Long Beach.
Aside from the perks Clinton arranged for COSCO, Clinton was able to convince folks that it was in "our national interest" for him to guarantee a loan for a Chinese nuclear plant that supplied power for building their war ships.
"Nice friends to align yourself with."
You've got a few hum-dingers aligned with you, too.
I beleive this is the company that is in a corruption scandal with the DNC in the Miami port.
How convienent. I hope DPWorld gets top dollar from these shysters and if not mothballs the port.
Eventually a ChiCom company will get it, and when it does, not a peep from the MSM or Chuckie Schumer.
"I hope DPWorld gets top dollar from these shysters and if not mothballs the port."
Need I remind you, as snarkily as possible, that DP World would not have control over any ports? Sounds like you've decided to run with disinformation when it suits your own purposes.
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