Posted on 03/22/2006 11:46:33 AM PST by CarrotAndStick
DUBAI — DP World, which has just weathered a storm over its aborted takeover of six US ports following a $6.8 billion acquisition of P&O global operations, is facing unexpected yet snowballing opposition from India on fears that the Dubai-based company will have a monopoly of the subcontinent's container terminal operations.
With the acquisition of P&O assets, DP World has under its control India's three major container terminals: Nhava Sheva, Mumbai; Chennai Container Terminal, Chennai; and Mundra International Container Terminal, Gujarat; apart from a share in the Vishaka Container Terminal at Vishakapatnam and the new container terminal in Vallarpadam, Kerala — commanding more than half of container handling operations in India. Against the total Indian container trade volumes of about 4.3 million TEUs, P&O Ports handled about 2 million TEUs last year.
Observers believe that if the mounting opposition to the takeover fails to subside, Indian government intervention would be inevitable. Spearheading the campaign against the takeover is Gujarat state, which is considering to block the sales on the ground that the takeover of Mundra International Container Terminal is in violation of a contractual agreement it had with P&O.
However, industry sources indicated that the most potent ammunition in the hands of the opponents of the deal is the monopoly clause. It is feared that there would be a natural tendency for DP World to divert traffic to their container terminals, which may be at the cost of other nearby ports.
Another hurdle is that the proposed takeover will have to be vetted by the government before it comes through. "This is a direct fallout of a clause in agreements signed between India's private port operators and the government, according to which any change in the equity structure of the company has to be approved by the government. The clause enables the government to guard against the emergence of a monopoly situation," industry sources pointed out. It is understood that the government is taking the legal opinion to determine the effect of changes in the equity structure.
For DP World, apart from the P&O operations, there are several major projects in the pipeline to strengthen its global network. These include developments in Asia, Europe, and the Middle East. The international container transshipment terminal at Vallarpadam is the largest single operator container terminal currently planned in India.
Another cornerstone project is the development of Pusan Newport, in which DP World has a 39.55 per cent interest and management contract.
In March 2005, DP World was awarded a 30-year concession to develop and operate the container terminal at the Port of Fujairah.
This was followed by the awarding of a management contract for Mina Zayed Port in Abu Dhabi. These concessions will enable DP World to streamline operations at the major container facilities of the UAE. A few months ago, DP World also announced agreements to develop new container terminals at Yarimca, Turkey and Qingdao, China.
DP World also has interests in logistics businesses in Hong Kong and China, notably ATL, the market leading logistics operator based at Kwai Chung, Hong Kong.
The P&O deal would make Dubai Ports the world's third-largest ports operator, behind Li Ka-shing’s Hutchinson Whampoa's ports business and the Singapore government’s PSA.
History
In 1822 Brodie McGhie Wilcox, a London ship broker, and Arthur Anderson, a Scottish sailor, went into partnership to operate a shipping line, primarily operating routes between England and Spain and Portugal. In 1835 a Dublin shipowner named Captain Richard Bourne joined the business and the three men started a regular steamer service between London and Spain and Portugal - the Iberian Peninsula - using the name Peninsular Steam Navigation Company, with services to Vigo, Oporto, Lisbon and Cádiz.
In 1837 the business won a contract from the British Admiralty to deliver mail to the Iberian Peninsula and in 1840 they acquired a contract to deliver mail to Alexandria in Egypt. The present company, the Peninsular and Oriental Steam Navigation Company was incorporated in that year by a Royal Charter, and its name therefore includes neither "Plc" nor "Limited".
Mail contracts were to be the basis of P&O's prosperity until the Second World War, but the company also became a major commercial shipping line and passenger liner operator.
In 1914 it took over the British India Steam Navigation Company, which was then the largest British shipping line, owning 131 steamers. Further acquisitions followed and the fleet reached a peak of almost 500 ships in the mid 1920s. 85 of the company's ships were sunk in the First World War and 179 in the Second World War.
They are pursuing opportunities for young Muslims in business which will decrease the number of young people drawn to terror for lack of job opportunity.
A good thing...hope it continues with them and other Muslim countries looking on.
Beware jdm, the pro-UAE will soon arrive...they always do. lol
Don't know the answer to this, but if they bring money into the country, it will inevitably find it's way into the pockets of other people outside of the company thru other business ventures. Capitalism at work.
Muslims when they get rich dont become terrorists. They start funding terror. The Dubai Sheikhs are as notorious as their Saudi cousins. Remember the head of the 9/11 hijacking team was a Phd from Germany. There is no coorelation between the lack of economic opportunity and islamic murder.
Job opportunity? Here's job opportunity in the UAE.
“Everyone is angry here. No one will work,” said Khalid Farouk, 39, a labourer with Al Naboodah. Other workers said their leaders were asking for pay raises: skilled carpenters on the site earned just US$7.60 per day, with labourers getting just US$4 per day.
http://www.freerepublic.com/focus/f-news/1601037/posts
And economic opportunity will help; if people in Dubai and other Muslim countries get rich it will help defray much terror toward the US which is targetted toward us since we are a rich country.
Neither do I. In this case I would say 75-80% of muslims / sarc
Seriously, islamic terror is related to fanaticism and has little to do with economic prosperity. Saudi Arabia is a case in point. Christian Ethiopia which is poorer isnt producing hijackers, suicide bombers etc. Neither is buddhist cambodia, hindu india, jewish israel.
I have seen this "poverty is the cause of terrorism" argument. It is foolish. The poor are looking for food, the islamo-fascists like any other nut cases are looking for blood.
If you had read the link, the workers are protesting and striking at the moment.
There's a lot more jobs than that in Dubai. And that's why there are waiting lists to get in and work.
I posted a quote from the article. Take it up with the author. I could care less.
Less than 3% unemployment in Dubai. Job opportunity is something they definitely have.
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