Dubai Firm Backs Out of U.S. Ports Deal
- In case you hadn't already heard:
Dubai Firm Backs Out of U.S. Ports Deal
By LIZ SIDOTI, Associated Press Writer 52 minutes ago
WASHINGTON - A Dubai-owned company abruptly abandoned
its plan for managing operations at six U.S. ports
Thursday, defusing an election-year showdown between
President Bush and the Republican-controlled Congress
over an issue that had become a political land mine
for the GOP.
"DP World will transfer fully the U.S. operations ...
to a United States entity," H. Edward Bilkey, the
company's top executive, said in the surprise
announcement that seemed to spread relief throughout
the Capitol and the White House. It was unclear which
American business might get the port operations.
Just hours earlier, Republican House and Senate
leaders privately told the president that Congress was
all but certain to block DP World's plan. Under
pressure from a disapproving public, a House committee
overwhelmingly voted against it Wednesday. The leaders
told Bush the Senate would inevitably do the same,
despite his threats to veto any legislation killing
The company's announcement gave Bush an out. He now
doesn't have to back down from his staunch support of
the United Arab Emirates-based company or further
divide his party on a terrorism-related issue with a
The White House expressed satisfaction with the
"It does provide a way forward and resolve the
matter," said Scott McClellan, the White House press
secretary "We have a strong relationship with the UAE
and a good partnership in the global war on terrorism,
and I think their decision reflects the importance of
our broader relationship."
Administration officials expressed surprise at the
outcome. White House officials said the decision was
the result of conversations between Congress and the
company, and that senior administration officials were
not directly involved in the talks.
Sen. John Warner (news, bio, voting record), R-Va.,
said "upper levels of both governments" worked toward
the result, including Sheik Mohammed Bin Rashid Al
Maktoum, prime minister of the United Arab Emirates
and emir of Dubai, who "advised the company ... that
this action is the appropriate course to take." DP
World's statement indicated that Sheik Mohammed made
After weeks of controversy the end came unexpectedly
Hours after congressional leaders delivered their
warning, Warner, chairman of the Senate Armed Services
Committee, read the company's announcement on the
It was unclear how the company would manage its
planned divestiture, and Bilkey's statement said its
announcement was "based on an understanding that DP
World will not suffer economic loss."
Even critics of the deal expressed cautious optimism
that DP World's move would quell the controversy
surrounding that company's plan to take over some
terminal leases at six major U.S. ports held by the
London-based company it was purchasing.
Congress, typically a slow-moving operation, moved at
lightning speed to try to block the deal, underscoring
the deep concern over it and the anger about the White
House's unwillingness to listen.
"This should make the issue go away," said Senate
Majority Leader Bill Frist, R-Tenn. Added Warner: "To
me, that statement put an end to all of this."
The two senior senators backed the Bush administration
on the issue and they had been privately urging the
company to give up its quest, Republican officials
said on condition of anonymity.
"The devil is in the details," said Senate Minority
Leader Harry Reid, D-Nev., echoing other lawmakers in
Rep. Peter King (news, bio, voting record) applauded
the decision but said he and others would wait to see
the fine print. "It would have to be an American
company with no links to DP World, and that would be a
tremendous victory and very gratifying," said the New
York Republican, chairman of the House
Homeland Security Committee.
The company on Thursday finalized its $6.8 billion
purchase of Peninsular & Oriental Steam Navigation
Co., the British firm that through a U.S. subsidiary
runs important port operations in New York, New
Jersey, Baltimore, New Orleans, Miami and
Philadelphia. It also plays a lesser role in dockside
activities at 16 other American ports.
The plan was disclosed last month, setting off a
political storm in the United States even though the
company's U.S. operations were only a small part of
the global transaction. DP World valued its rival's
American operations at less than 10 percent of the
nearly $7 billion total purchase.
Republicans denounced the plan, furious that they
learned of it from news reports instead of the
administration. They cited concerns over a company run
by a foreign government overseeing operations at U.S.
ports already vulnerable to terrorist attacks.
Democrats also pledged to halt the takeover and
clamored for a vote in the Senate. They sought
political advantage from the issue by trying to narrow
a polling gap with the GOP on issues of national
After the company's announcement, the Senate
indefinitely postponed a vote on a Democratic move to
block the deal.
Bush defended the deal, calling the United Arab
Emirates a strong ally in the war on terror and
pledging to cast the first veto of his presidency if
Congress voted to interfere.
Senate Republicans initially tried to fend off a vote,
and the administration agreed to a 45-day review of
the transaction. That strategy collapsed on Wednesday
with the 62-2 vote in the House Appropriations
Committee to thwart the sale.