DP World surrenders control of U.S. terminals
Dubai Ports World said today it plans to sell off the U.S. terminal and cargo handling operations it acquired this week as part of a $6.8 billion acquisition to a U.S. entity.
“DP World will transfer fully the U.S. operations of P&O Ports North America Inc. to a United States entity,” Chief Operating Officer Edward Bilkey said in a statement. “This decision is based on an understanding that DP World will have time to effect the transfer in an orderly fashion and that DP World will not suffer economic loss.”
The move was made in response to overwhelming opposition in the U.S. Congress to the takeover of terminals in six major U.S. ports and other locations because of concern that the Dubai-owned company could not be trusted to prevent terrorists from infiltrating U.S. ports. Many lawmakers argued that ports are critical infrastructure that should be owned and operated by U.S. firms, despite the fact that at least three-quarters of container terminals in the United States are owned by foreign companies.
Congress appeared ready to block the deal and override a threatened veto by President Bush.
In the statement, DP World said Sheikh Mohammed bin Rashid Al Maktoum made the decision to relinquish the U.S. properties in order to preserve strong relations with the United States.
The statement leaves some uncertainty as to whether DP World has decided to divest the U.S. business or to give up management control to a subcontractor.
“I’m told it will be a complete sale and if that’s the case, I can’t imagine it not answering the problem,” Reuters quoted a senior administration speaking on condition of anonymity.
A couple of compromise proposals floated earlier this week by members of Congress called for DP World to hire a U.S. company to operate the terminals, but allow it to retain ownership.
But an official at the United Arab Emirates embassy in Washington said the government has decided to divest its assets, according to Bloomberg News.
The statement also leaves open the question about whether DP World will sell the terminals to the U.S. government or a private company.