US senators battle over DP World

Lawmakers in Washington are persisting in their efforts to scuttle Dubai Ports World’s (DPW) takeover of British ports and ferries operator P&O — despite the White House agreeing to a new 45-day security probe in order to appease those concerned by the deal.

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By  Andrew White Published  March 5, 2006

Lawmakers in Washington are persisting in their efforts to scuttle Dubai Ports World’s (DPW) takeover of British ports and ferries operator P&O — despite the White House agreeing to a new 45-day security probe in order to appease those concerned by the deal. Objections last week centred on a report in The Jerusalem Post, that claimed state-owned DPW were participating in an Arab boycott of Israel — a close friend of the US. “This boycott not only violates at least the spirit of US law, it is inconsistent with everything we believe in as Americans,” said Senator John Kerry, Democrat, Massachusetts. In response, Edward H. Bilkey, chief operating officer at DPW, reiterated that the company was not involved in matters of state-to-state policy. He did, however, admit that the boycott was in operation at DPW ports in Dubai. Additionally, a US Coast Guard memorandum published last week showed that the agency had initial concerns over the deal. As a result, several senators have called for the Department of Homeland Security to reveal whether other agencies had also initially voiced concerns. In the UK, one American firm has applied to the high court to block the takeover. Eller & Co. claims that they will lose up to US$86 million if the deal goes through. The company, which provides stevedoring services at the port of Miami, asserts that legal challenges in the US could lead to the revocation of P&O’s operational licences. This in turn could lead to the breaching of contracts with Eller & Co., and the loss of up to 1500 jobs in Miami. “There is a real prospect that the arrangement will lead to US port authorities revoking licences and leases held by joint venture companies, which will cause severe financial losses,” said a spokesman for the company. Meanwhile, US president George W. Bush has reiterated his support for the deal. He insisted that the takeover should go through, even as he welcomed the new security review. “If there was any doubt in my mind or people in my administration’s minds that our ports would be less secure or the American people in danger, this deal wouldn’t go forward,” he said. In Dubai, his support has been echoed by the American Business Council, which has submitted an open letter, endorsed throughout the GCC countries, to congress urging its members to approve the transaction. “We said that we totally support the sale of P&O to DPW,” said Louis Scotto, president of the American Business Council of Dubai and the Northern Emirates. “It is a very good business deal and does not represent any threat to security whatsoever.” The debate comes as DPW have revealed impressive growth in container throughput for 2005. The operator handled 7.62 million TEU’s (twenty-foot equivalent container units), which represents a 19% rise from 2004. “We have quickened the pace of expansion with the aim of making sure we are where our customers need us to be, building on our excellent reputation for quality service,” said Mohammed Sharaf, chief executive officer of DPW. In a pointed reference to concerns in the US, Mohammed Al Muallem, senior vice president and managing director of DPW, stressed the firm’s commitment to port security. “DPW continues to be at the forefront of implementing new technologies, and has further enhanced security at its terminals,” he said. “Our Dubai ports were some of the first to be ISPS certified, are ISO certified, and the Environmental Health & Safety Group operates strictly under the International Safety Management Code. “During 2005, we also joined the Counter Security Initiative, which has seen US customs officers stationed on our terminals, working closely both with management and our teams on the ground, to maintain and enhance security,” he added.

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