The acquisition of P&O by Dubai Ports World step by step
The controversy continues on the acquisition of Peninsular & Oriental Steam Navigation by Dubai Ports World:
WASHINGTON - A New Jersey congressman said Saturday he wants to require that security officials at U.S. ports be American citizens to prevent overseas companies operating shipping facilities here from hiring foreigners in such sensitive positions.
Republican Frank A. LoBiondo, chairman of the Coast Guard and Maritime Transportation Subcommittee, cited “significant” security concerns over a $6.8 billion sale that gives a company in the United Arab Emirates control over operations at six major American ports.
LoBiondo said he wants the new mandatory citizenship requirements approved by Congress and President Bush before state-owned Dubai Ports World completes its pending purchase of London-based Peninsular and Oriental Steam Navigation Co.
The British company, the worldÂ’s fourth-largest ports company, runs major commercial operations at shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.
The Bush administration earlier approved the deal, which has drawn escalating criticism by lawmakers who maintain the United Arab Emirates is not consistent in its support of U.S. terrorism-fighting efforts.
In the interest of putting a little more light on the subject I submit the following timeline:
January 10, 2006 DPW offers a bid for P&O.The previous bidder had been the Port Authority of Singapore, which has connections with the Chinese authorities. Whichever bidder prevailed a foreign operator would have control over port terminal operations in six American portsThis was not a new situation: the British company had controlled the terminal operations for many years.
January 26, 2006 After DPW ups the ante P&O management recommends acceptance of the offer.
February 12, 2006 The American press takes note of the acquisition. See also this interesting post on the change in Internet activity on subject.
February 13, 2006 P&O shareholders accept offer.
February 14, 2006 New York Senator Charles Schumer notices (apparently for first time) that New York port terminal operations are foreign-controlled.New York Post editorial condemns acquisition.
February 16, 2006 Seven U. S. Senators call for review of acquisition.
February 17, 2006 White House defends acquisition arrangement.Senators Menendez and Clinton announce plan to block sale.
February 18, 2006 First lawsuit to block acquisition filed.
To recap:
The port operations in question had been controlled by foreign companies for many years.
Government ownership in whole or part of large companies is a commonplace in most of the world. The United States is an outlier in this.
Whichever bidder prevailed (or, in fact, no change of ownership took place) a foreign-owned company would control the port terminal operations in question.
DPW is an international leader in port terminal operations.
There is no comparable U. S.-owned company.
Banning the operation of U. S. port terminal facilities by foreign-owned companies is flummery (not to mention paranoid and diseconomic).
I do think that there are legitimate security concerns whoever is responsible for port terminal operations: the terminal operator is in a distinctly advantageous position to evade security operations. Does DPW present a particular risk? I donÂ’t see it.
In my view this situation should be managed not legislated. The risks should be identified and controls put in place to mitigate them. The controls should be reviewed systematically, thoroughly, and frequently to ensure their effectiveness.
This whole matter illustrates why we need more business managers in the Senate and many fewer lawyers and career politicians.