Middle Eastern company puts port deal on hold

| 2/24/2006

Dubai Ports World, the company at the center of a controversy over the control of some operations in six U.S. ports, has agreed to an indefinite postponement, opening the door for further discussions between supporters and opponents of the deal.

The deal drew strong bipartisan opposition because Dubai Ports World – which was planning to take over London-based Peninsular & Oriental Steam Navigation Co. – is owned by the United Arab Emirates. The takeover would have essentially given the government of that Middle Eastern country control of significant operations at six major U.S. ports.

The Associated Press reported that Dubai Ports, in a deal coordinated with the White House, has agreed not to exercise control or influence management over the U.S. ports pending further discussions. No time frame was given for those discussions.

The company will continue to move forward with its acquisition, but it will temporarily segregate the U.S. operations.

The AP reported that critics of the deal said the postponement was a positive step forward, but it still did nothing to allay their concerns over U.S. security.

Sen. Robert Menéndez, D-NJ, one of the deal’s harshest critics, told The AP that the postponement offer “isn’t worth the paper on which it’s written.”

“If the Bush administration will not stop this deal from closing, Congress must,” he said.

President Bush has maintained that the U.A.E. does not pose a security threat to the U.S., but a Senate oversight committee that met Thursday, Feb. 23, and challenged the assertion, claiming that the administration did not do a thorough enough examination of the deal before it was approved.