Port deal review buys respite for Bush

The White House has got a gift in the ports security debate, a chance for the president to sidestep a battle with members of his own party and to tone down bipartisan criticism of the deal.

DP World is set to take over major operations at six US ports
DP World is set to take over major operations at six US ports

DP World had said it was seeking further review in order to allay US lawmakers’ national security concerns about handing management of the port terminals to a company owned by the government of Dubai in the United Arab Emirates.

The offer by DP World to submit to a broader review of security issues in its deal to take over major operations at six US ports also could salvage a business deal critically important to its economic future.
The Bush administration has said it will grant the request by Dubai Ports World for an additional 45-day review of its contested takeover of terminal operations at six major US ports.

“Upon receipt of the new notification, CFIUS (Committee on Foreign Investment in the United States) will promptly initiate the review process and fulfil DPW’s request for a full investigation,” the agency said in a statement on Sunday.

The request, made jointly with the US unit of British company P&O, gives the Bush administration time to convince members of the US Congress not to block the deal.

Safety and security

“We are confident the further review by CFIUS will confirm that DP World’s acquisition of P&O’s US operations does not pose any threat to America’s safety and security,” Ted Bilkey, chief operating officer of Dubai Ports, said in a statement.

The White House said it was pleased the company had reached made the additional overture to the US Congress, but added that the purchase had already been closely scrutinised for security concerns.

Bush faced protests over thesale of P&O’s US operations

Bush faced protests over the
sale of P&O’s US operations

“We believe, however, the additional time and investigation at the request of the company will provide Congress with a better understanding of the facts, and that Congress will be comfortable with the transaction moving forward once it does,” Scott McClellan, the White House spokesman, said in a statement.

Many lawmakers fear the Dubai-based port operator could allow terrorists to attack the US. They also were outraged that CFIUS approved the deal giving the state-owned company control of terminals at the six ports, including New York, without conducting the additional 45-day review to thoroughly examine potential national security concerns.

Dubai Ports said last week it would proceed with its $6.85bn takeover of P&O on 2 March 2 – making it the world’s third-largest port operator – but not immediately assume management of the US port terminals.

More time

George Bush, the US president, has strongly backed the ports deal and threatened to veto any legislation blocking it.

But Stephen Hadley, Bush’s national security adviser, said on CNN’s Late Edition it was clear members of Congress needed more time to understand and review the deal.

“Upon receipt of the new notification, CFIUS will promptly initiate the review process and fulfil DPW’s request for a full investigation”

Committee on Foreign Investment in the United States

The White House says the UAE is a staunch ally in the US war on terrorism and has worked to close the loopholes that allowed al-Qaida operatives to use it as a financial and logistical hub before the 11 September 2001 attacks.

The companies’ decision to ask for an extended review followed intense consultation with congressional leaders.

Senate Majority Leader Bill Frist, a Tennessee Republican, had recommended the companies voluntarily seek an extended review.

John Warner, the Senate Armed Services Committee chairman and a Virginia Republican, told NBC’s Meet the Press he met with Bilkey this weekend to discuss the deal and was given a copy of the agreement between Dubai Ports and P&O Ports North America asking for the 45-day review.

Warner said Dubai Ports already operates in more than 30 countries.

Step forward

Senator Charles Schumer, a New York Democrat and leading critic of the deal, said the request for a 45-day investigation “is a significant step forward, but the devil is in the details”.

Dubai Ports is the world’s thirdlargest port operator

Dubai Ports is the world’s third
largest port operator

Congress must have a 30-day opportunity after the extended review to block the deal if it still has concerns, Schumer said. He also called on the administration to make public the results of the new investigation.

As part of its request for an extended review, Dubai Ports pledged to guarantee the independence of all terminal operations now managed by P&O North American Ports (POPNA) by establishing that as a separate business unit.

It also pledged to keep POPNA’s current management and not to try in any way to influence the unit’s operations. POPNA’s chief security officer will remain a US citizen unless the US Coast Guard agrees otherwise, the company said.

Source : News Agencies

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