Friday, March 10, 2006

Dubai firm to 'transfer' US ports

Dubai firm to 'transfer' US ports

Dubai Ports World (DPW) is to transfer its US ports business to a "US entity" to end a row over its takeover of P&O.

While DPW has not explicitly said it will sell the subsidiaries responsible for the ports, the White House is suggesting this will be the end result.

Arab-owned DPW made the move as members of both the House of Representatives and the Senate warned they would block the takeover over security concerns.

The White House welcomed DPW's offer saying it should defuse the standoff.

"It does provide a way forward and resolve the matter so we can continue working on other important priorities," White House spokesman Scott McClellan said.

The deal will make DPW a top-three global port operator, with 51 terminals in 30 countries across five continents and an interest in more than 20 US ports.

'Preserve links'

News of the transfer of the six ports to a US entity was broken to the Senate by Senator John Warner, who read out a press release from DPW outlining its plans.

"Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the US operation of P&O Operations North America to a United States entity," the statement said.

Details of how the transfer would be carried out were unclear.

DPW's statement added that the decision was "based on an understanding that DP World will have time to affect the transfer in an orderly fashion and that DP World will not suffer economic loss".

Details awaited

The move was given a cautious welcome as a "promising development" by Senator Charles Schumer, one of the main critics of the deal.

"But the devil's in the details," he added. "Those of us who feel strongly about this issue believe that the US part of the British company should have no connection to the United Arab Emirates or DP World."

Fellow critic, Congressman Peter King added that while he welcomed the offer he and others were waiting to see the details of the proposal saying any firm that took over DPW's US interests "would have to be an American company with no links to DPW".

News of the surprise offer came as the White House played down President Bush's threat to veto any law seeking to block the takeover.

Instead, Mr Bush said he was trying to find a compromise to end the outcry over the deal which both Democrat and Republican lawmakers had warned would make the US more vulnerable to terrorism.

Story from BBC NEWS: