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.
I knew there were a few American companies fully capable of operating a port terminals.
Stop apologizing for bureaucratic idiots at the Treasury Dept. and for this administration's incompetence.
That ought to set off the Bushbots.
One thing was learned; Don't partner with Eller & Co. I think that Eller is looking for a fire sale deal.
It seems that all sorts of collaborations are arranged.
For example,...
a terminal at the Port of Long Beach is operated by a joint venture between COSCO (Red China's government-owned shipping company) and a U.S. company, Stevedoring Services of America.
"COSCO is the majority lease holder with 51 percent, says Wong.Foreign involvement is nothing new [COSCO --Chinese gov't co-- runs terminals]
Odd that COSCO gets to run a terminal, since COSCO is considered by Red China to be an arm of its military.
Actually DPWorld legally owns the former P&O terminals as of right now(actually since March 2nd).
Congress could always do the communist thing and take them away.
Gee how does it feel to be another hugo chavez.
That's for sure. They sound like cutthroats. No wonder Schumer felt "simpatico" with them.
You know, the DPW port offer sounds a little large for what they would be getting. You don't guess the Islamists in charge of things in Dubai were willing to pay a premium to get some eyes and ears on the ground at Norfolk and Beaumont to keep tabs on the US military, do you?
Between the ports deal and the open borders......well, I don't want to start whaling on the administration right before supper.
Exactly, corrupt crony DNC capitalism at it's finest(worst), but some on FR are cheering on the thugs, such as regulator.
I'll bump this up. There was/is an American company interested. If they went to court, they appear willing to deal with the unions.
"Odd that COSCO gets to run a terminal, since COSCO is considered by Red China to be an arm of its military."
That was Clinton's doing, and it's the gift that keeps on giving ... prior to intervention by Clinton, it was not possible for a state-owned entity to lease a terminal. COSCO was often cited as precedent for the DP World deal, a sort of "well, looky looky at the Communists on the west coast, they're worse" attempt at justification, when in truth they shouldn't be there, either. There was a huge outcry at the time, and the inital deal was squelched. It would be interesting to see just when they snuck in the back door, and who was or is accountable for this, which could reasonably be described as a breach of the public trust.
This is almost like Kelo, except they didn't go judge shopping, they whipped up hysteria and ignorant and gutless politicians went along.
Whoaaaa one disaster at a time.
From the above article:
``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.''
They've been in business 70 years. They will be out of business in three years, because?
"some on FR are cheering on the thugs, such as regulator."
The devil you know, over the one you don't.
The day that union thugs and mobsters start flying planes into office buildings and plotting to nuke a US city or two, you'll have a point, and I will concede. Until then, you don't.
They can't afford to pay LSM doctor's wages. They're making a sale's pitch but in reality the equity for the real estate would be just as much incentive to sell in a few years. If they can buy it and survive, more power to them but I wouldn't chance it.
"The smaller players can't compete without their friends in Congress. Chuckie Schumer was lobbied months ago by Eller to go after DP Ports."
How much did DP Ports spread around?
Could they have withstood an "investigation" - the normal one, not the quickie review by govt. underlings?
Or has Eller always worked with in collaboration with companies like P&O Ports North America, when running a terminal?
I'll try to find the answer later, if I find time.
The day that union thugs and mobsters start flying planes into office buildings and plotting to nuke a US city or two, you'll have a point, and I will concede. Until then, you don't
And get back to me when those same union thugs provide essential logistical support for the US Navy and US Armed services on the WOT that the UAE has.
I'll be waiting a long time, IMO.
Maybe Judge Greer is moving on up.
You took the words right out of my post. If I've heard that one time from the uae supporters, I've heard a thousand.
"They're making a sale's pitch but in reality the equity for the real estate would be just as much incentive to sell in a few years."
What equity is gained with leased real estate?
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