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.
Yup. If that don't do it...nothing will. :-)
Is this guy some sort of comedian?
No, the issue is that no American company had the resources to buy out P&O, or the ones that did have the resources didn't think it was a good deal. If you read carefully, these American companies, especially Eller, are banking on being able to buy these leases at large discounts, now that DPW can't operate the terminals themselves.
Think of this as Congress condemning these leases under international "eminent domain," in order to profit private businesses in their districts... Strangely, most everyone here condemned the Kelo decision, but we have just seen Kelo implemented on the international scale.
Do you think they've got the cash to buy out DP Worlds American contracts? I've heard quotes of 700 million....
*snicker* How very right you are.
"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."
Always back to a quid pro quo. I am certain that there are other ways to demonstrate our gratitude. The public uproar could have easily been anticipated by anyone who actually mingles with the general public here in the US for any length of time. Perhaps that is beneath every single person involved in this decision, as well as President Bush himself. But, I see no advantage in permitting that perception to gain currency; there is only downside, as his father discovered in his time.
What quid pro quo? DPWorld legitmately bought out P&O. It was an above board old fashioned business acquisition and the P&O shareholders accepted DPWorld's offer.
Unfortunaetly, with DPWorld playing by the rules, they got caught up in the ugliest corrupt crony DNC capitalism this country has seen in a long time.
There are no American companies that could compete on the scale of DP World. I don't recall anyone saying Americans were incapable of managing a terminal in a port. There just aren't any companies who operate on the same scale. The operators eyeballing DP World's American contracts are going to be in for a rude awakening if they think they're going to get a good deal on this. DP World has already announced they will not sell at a loss.
managing a terminal
Ahhh, you're playing at word games.
"Strangely, most everyone here condemned the Kelo decision, but we have just seen Kelo implemented on the international scale."
It's a stretch to drag Kelo into a business lease, don't you think?
"I don't recall anyone saying Americans were incapable of managing a terminal in a port."
I do, I do!
"I couldn't afford to pay Dr's wages for LSM."
They're already doing so, or else they've managed to elude the union with their existing terminal lease agreements. Sounds doubtful to me.
No, I do not. What does eminent domain do? It forces someone to sell a valuable asset, usually at less than market value, and without regard to the return the owner would receive if allowed to keep the asset. Under the Kelo decision, that power can be used to transfer the property (asset) to another private individual or company, enabling them to profit at the expense of the former owner. In this case, Congress is condemning the leases owned by DPW, and forcing them to sell them to another company, probably at a loss. This will allow the new owners of the leases to make a profit at the expense of the former owner.
BTW, the US companies currently under consideration are all big Dem contributors; is it any surprise that Schumer and company supported this?
Where do you see the difference?
"Where do you see the difference?"
They're leasing property that is already public, ergo to cite Kelo (governmental seizure of private property for public benefit via eminent domain) is more than a stretch. It just does not apply.
Sorry, the priciple is the same - taking something of value from the rightful owner, and giving it to someone else.
PSA (A Singapore company) got into the bidding at the last minute, but lost out.
Concern was growing last night over the sale of P&O, amid claims that a possible takeover by Singapore's state-owned ports business (PSA) would hand it and its Chinese allies an effective monopoly over Britain's container ports.Martin O'Neil, former chairman of the trade and industry select committee, said yesterday that he was concerned that the Singaporean group, PSA, and its strategic partners could gain control of more than 90% of Britain's deep-sea container docks. "
Which ones currently do it without collaborating with foreign companies?
Schumer, Clinton and King need to hear this; the LSM are not the only unintended consequences this is going to create.............
None of them because we have let foreign companies run so many terminals.
I bet Fed Ex could run them just fine, with no union. UPS could do it better than any and keep the union.
Personally, I can't figure out why some intermodal transport company doesn't step up and take a few terminals. They have the trucks, jets and rails now, and adding ocean freight would complete the picture.
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