Dubai deal for P&O draws criticism from U.S. lawmakers

Feb. 17, 2006
Dubai Ports World, a port operator based in the United Arab Emirates country of Dubai,to acquire Peninsular & Oriental Steam Navigation Co. (P&O), a U.K.-based

Dubai Ports World, a port operator based in the United Arab Emirates country of Dubai, to acquire Peninsular & Oriental Steam Navigation Co. (P&O), a U.K.-based company that currently manages operations at six U.S. ports: Baltimore, Miami, New Jersey, New Orleans, New York, and Philadelphia. That has ignited a political debate because two of the Sept. 11 hijackers were UAE citizens, and there is some concern as to what extent DP World's role would be in securing the U.S. ports from terrorists. Port security of all U.S. ports, however, is managed by the U.S. Coast Guard and U.S. Customs and Border Protection; DP World's role would be to manage commercial activity at the ports.

New York Representative Peter King, chairman of the House Homeland Security Committee, was among the U.S. lawmakers raising doubts over the DP World acquisition. DP World’s $6.8 billion deal for P&O will include operating terminals at the U.S. ports of New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. The deal was reviewed and passed by the U.S. Treasury Department’s Committee on Foreign Investment (including Defense and Homeland Security representation). Numerous other mayors and governors of the cities and states housing the ports have objected to the deal and there are efforts afoot within Congress to block the transaction until it can be scrutinized. President Bush has threatened to veto any move to cancel the deal.

Noteworthy is the fact that Treasury Secretary John Snow, chair of that committee, is the former head of CSX Corp., which owned and operated SeaLand and CSX World Terminals, a port terminal operating company. In fact, DP World had previously acquired CSX World Terminals.

While the National Industrial Transportation League (NITL) has opted not to take a position in the current debate, representatives from the NITL stated, "Regardless of what nationally based company takes control of these terminals, they must be subject to safeguards which ensure the transportation system's integrity and continued operations."

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