Dubai ports deal runs into more trouble

WASHINGTON - Republican lawmakers say they won't wait for the Bush Administration to finish a security review of a state-owned Dubai company's takeover of terminal operations at six US seaports before passing legislation against it.

House Republican leaders said they would attach legislation blocking the deal to an emergency funding measure that the chamber planned to consider next week.

"We believe the US should not allow a Government-owned company to run American ports," said Ron Bonjean, spokesman for House Speaker Dennis Hastert, an Illinois Republican. Bonjean said the measure would be aimed only at the DP World deal.

DP World, which is owned by the Dubai Government, agreed to a new 45-day investigation of the transaction, and President George W. Bush's Administration urged Congress to delay judgment of the deal until that probe is finished and reviewed.

Senate Majority Leader Bill Frist, a Tennessee Republican, said he hadn't talked with the House leadership. Frist had earlier said he wouldn't allow a vote on the issue until the review was completed and reviewed.

Senator Susan Collins, a Maine Republican who heads the Senate Homeland Security Committee, said a proposal requiring DP World to subcontract these operations to US firms "is worth pursuing and has merit".

Senator Charles Schumer, a New York Democrat, said he would go a step further and ban DP World from owning the facilities, as well.

"It should be a total spinoff, a selling of the US operations," said Schumer, a leading critic of the Administration's decision in January to approve DP World's US$6.8 billion ($10.46 billion) acquisition of London-based Peninsular & Oriental Steam Navigation Co after a minimum 30-day review.

Overseas-based companies operate as many as 80 per cent of American terminals, a shift that began when Jimmy Carter was in the White House.

DP World would assume P&O leases on container-ship terminals in the ports of New York, Newark, New Orleans, Baltimore, Miami and Philadelphia.

DP World doesn't intend to change its plan to allow P&O executives to continue running the US facilities while it completes its purchase of the firm by "later this week", said senior vice-president Michael Moore.

DP World chairman Sultan bin Sulayem said the company was continuing to talk with members of the US Congress, and questions about security would be satisfied after the 45-day review now under way.

"A lot of people will be very clear what this deal is about," he said in an interview on CNN in Dubai. "We do not compromise on security."

Lawmakers object because Dubai is one of seven sheikdoms that make up the United Arab Emirates, where two of the September 11 attackers came from and whose banks were used by the plotters to funnel money to the operation.

- BLOOMBERG