The Ports Deal is Over...Or Is It?

Posted on March 10, 2006

DP World of the UAE has announced that it is withdrawing from the deal in which it would take over a number of U.S. ports. In an odd move, Senator John Warner (R- WA) made the announcement on behalf of the UAE. It was a very vaguely worded statement which said that DP World will transfer "operations" of the U.S. ports to an American company.

But what company? For how much money? Will DP Ports still be an investor? An owner? What does "operations" mean? What's really going on here? And why does an American Senator now speak on the Senate floor for a foreign government?

"Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship ... DP World will transfer fully the U.S. operations of P&O Operations North America to a United States entity," Edward H. Bilkey, DP World's chief operating officer, said in a statement. The announcement did not specify which U.S. company would be involved.
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A source involved in talks between the White House, Congress and DP World said the exact meaning of the UAE firm's statement is unclear, in part because the details of the transaction have not been worked out. "The next steps are very hard to predict at this point, either in terms of who they'll actually sell to and in terms of what it means for U.S. relations in the region," the source said. A source told CNN that the White House believes DP World's American assets would be sold to a U.S. firm.
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Because of sparse information about the transaction, Senate Democrats reacted cautiously to the company's announcement and continued to press for a Senate vote that would kill the deal.
"If the U.S. operations are fully independent in every way, that could, indeed, be promising," said Democratic Sen. Charles Schumer of New York. "If, on the other hand, there is still ultimate control exercised by DP World, I don't think our goals would be accomplished, and obviously, we'll need to study this agreement carefully."

You got that right, Senator Schumer.