Worries about Dubai owning port operators  

redmustang91 57M  
8704 posts
2/25/2006 5:33 am

Last Read:
3/5/2006 9:27 pm

Worries about Dubai owning port operators


Apart from racist and xenophobic fears the port ownership issue seems much ado about nothing to me. The security needs to be improved regardless of who owns the operators. More scanning for radioactivity and random searches. The ownership was foreign before, from the UK. Consolidation and globalization is not a new trend.

Outside U.S., Puzzlement Over Reaction to the Dubai Port Deal
By HEATHER TIMMONS
LONDON, Feb. 24 – The tempest over Dubai's takeover of some United States port operations has surprised and puzzled shipping officials and experts outside America, who called the criticism misguided and contrary to global trade.

With its $6.8 billion purchase of the Peninsular & Oriental Steam Navigation Company, Dubai Ports World, which is owned by the emirate of Dubai, would acquire terminals not just in the United States, but in 18 other countries, among them Britain, Belgium, France, India and China.

Yet nowhere else has the deal for P.& O., as the company is known, drawn much anxiety. Instead, the call from American politicians to review the purchase, and some of the talk surrounding the discussion, has cast the United States in a negative light to outsiders.

"We've been shocked by the level of animosity and xenophobia leveled at D.P. World," said Nick Savvides, the editor of CI Online, a research company for the shipping container industry with headquarters in London. The reaction is particularly galling because under the deal "port security remains firmly in United States hands," Mr. Savvides said.

In the United States, the sale has raised a furor, in part because two of the Sept. 11 hijackers came from the United Arab Emirates, which include Dubai, and because the United States may be a more likely target than other countries. Seeing a possible threat to national security, some members of Congress are pressing for a further review of the deal. President Bush has said he will veto any attempt to block it.

Dubai agreed Thursday evening to temporarily delay its takeover of the six United States ports. On Friday, Treasury Secretary John W. Snow indicated in a conversation with reporters that the hiatus would be used to better explain the deal, rather than review it. Most international observers say they believe that Dubai will eventually take control of the United States port operations.

The deal, which is scheduled to close on Thursday, gives Dubai Ports an entry to the United States, but in other countries it will vastly increase the company's reach. In India, for instance, Dubai will take control of about half the country's container shipping operations, but there has been little public outcry there.

Foreign port operators say the takeover is just part of a continuing consolidation in the industry.

"Globalization is not something new in Antwerp," said Alexandra De Laet, a spokeswoman for the Port of Antwerp in Belgium, where Dubai Ports would acquire 24 berths. "Container traffic is dominated by foreign companies."

The takeover is not a security concern, she said. "We don't think the shifting of owners will make a difference in this, since we have our own security measures," Ms. De Laet said. "We comply with all the same standards that the United States has," she said, adding that the port "won't be less secure because it's a different company operating there."

In Britain, which privatized its port industry when Margaret Thatcher was prime minister, the deal was seen as a capitalist, not a political, issue.

"The ownership of P.& O. went through a commercial decision," said a spokesman for the Department of Trade and Industry, who insisted that his name not be used because agency rules do not allow it. Many container ports in Britain are owned by the private sector and change hands, he said.

"We lay down regulations and expectations and standards," he said, "and whoever owns the ports has to comply with them."

Dubai Ports will also be acquiring port operations in Vancouver, Canada, as part of the purchase of P.& O., but there has been no outcry in Canada. Canadian politicians say their American counterparts are overlooking a more important issue: the United Arab Emirates "support America in a major way, and they support Canada in a major way," Senator Colin Kenny of Ottawa said. "They are very engaged in the war on terror and we don't have a lot of friends in that part of the world. These are the good guys."

In fact, some of the toughest criticism of the United States reaction comes from Britain, possibly America's staunchest partner in the war on terror. Although P.& O. was founded in Britain, more than 90 percent of shareholders voted for the Dubai takeover, in part because of the rich price being offered.

Some British publications and analysts were blunt in their criticism. "The bluster about national security conceals one of the uglier faces of U.S. protectionism – the one with the slightly racist tinge," The Financial Times said in an editorial Tuesday.

The Economist Intelligence Unit entitled a brief on the deal "Big vision collides with small minds."

Richard Dibley, a director in London's Planco Consulting, which advises port authorities, said he was "struck by how strange" the American reaction was, and added that it could be called "paranoia." He described the port and shipping business as "international, you don't get a business that is more so."

David Whitehead, the director of the British Ports Association, a trade group for port owners, said the American politicians do not understand how the industry works. Port security is a government issue, he said, and every European port that ships to the United States has Coast Guard agents who check cargo.

But that misunderstanding overlooks a bigger issue, he said. "The real issue is about international trade," Mr. Whitehead added. "If you accept international trade, you have to accept international participants."

MMDeveloper 34M
70 posts
2/25/2006 6:22 am

It's (I believe) against federal law for a foreign entity to control one of our ports.


redmustang91 57M  
8572 posts
2/25/2006 3:05 pm

No it is not or a UK company could not own the existing six port companies...


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