Washington – Bowing to ferocious opposition in Congress, a Dubai-owned company signaled surrender today in its quest to take over operations at U.S. ports.
“DP World will transfer fully the U.S. operations … to a United States entity,” the firm’s top executive, H. Edward Bilkey, said in an announcement that capped weeks of controversy.
Relieved Republicans in Congress said the firm had pledged full divestiture.
The announcement appeared to indicate an end to a politically tinged controversy that brought President Bush and Republicans in Congress to the brink of an election-year veto battle on a terrorism-related issue.
A leading congressional critic of the ports deal, Rep. Peter King, applauded the decision but said he and others would wait to see the details. “It would have to be an American company with no links to DP World, and that would be a tremendous victory and very gratifying,” said the New York Republican, chairman of the House Homeland Security Committee.
After weeks of controversy – and White House veto threats that spokesman Scott McClellan renewed at midmorning today – the end came unexpectedly.
The House Appropriations Committee voted 62-2 on Wednesday to block the deal, and GOP congressional leaders privately informed the president this morning that the Senate would inevitably follow suit. Senate Democrats clamored for a vote, increasing pressure on Senate Republicans to abandon the president.
It was unclear how DP would manage the planned divestiture, and Bilkey’s statement said its announcement was “based on an understanding that DP World will not suffer economic loss.” The firm finalized its $6.8 billion purchase today of Peninsular & Oriental Steam Navigation Co., the British firm that through a U.S. subsidiary runs important port operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.
It also plays a lesser role in dockside activities at 16 other American ports.
Despite the furor, the company’s U.S. operations were never the most prized part of the global transaction. DP World valued its rival’s American operations at less than 10 percent of the nearly $7 billion total purchase.
