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Dubai Ports World gives up on US |
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3/10/2006 8:55:27 AM |
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A US Senator has announced on the Senate floor that Dubai Ports World will sell off the management rights to six American ports after it completes the acquisition of the British company that now holds them.
Senate Armed Services Chairman John Warner (R,Va) had been trying to broker a rescue for the deal in the face of opposition from both Republicans and Democrats.
The unpopularity of the deal had turned into a major milestone for the Bush administration, which has argued that it poses no threat to national security.
But the tide of public opinion -- which seemed to turn on the erroneous notion that DPW would own the ports themselves and be responsible for security -- ran so strongly against the deal that even early supporters turned against it, mindful of impending elections and constituent reactions.
Senator Warner said DPW, owned by the ruling family of Dubai, had come under pressure from the United Arab Emirates leadership to relinquish pursuit of the American ports.
The Senator said DPW would transfer ownership of its American rights to an unspecified American "entity" under terms that would not cause it economic loss.
The statement read by Senator Warner was apparently the same or nearly identical to one issued by DPW COO Edward Bilkey, which notes that the gesture -- which involves only 10 per cent of the value in DPW's takeover of P&O, the current holder of the rights -- was being made in recognition of the "strong relationship" between the UAE and the US.
The effect on Congressional machinations to put up legislation blocking the deal altogether is not fully clear, but such legislation could still play a disruptive role by leaving the management of the ports rudderless.
The US Congress cannot block the sale of P&O but it can deny DPW access to the US portion of what it buys.
DPW said in the statement that it will work with the US Department of the Treasury on the details of the transfer.
Commentators have noted that finding a US-based "entity" to take over the American ports operations will be difficult since all but a tiny handful of port operations in the country are run by foreign-owned companies.
10-Mar-2006
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