by Kerry Thomas
February 27, 2006
In October 2005, when the
Peninsular and Oriental Steam Navigation Company began negotiating a deal with
Dubai Ports World that would transfer the operations of six major U.S. ports to
the Dubai-based company, few people noticed.
[Dubai Ports World
is a company owned by the government of Dubai, in the United Arab Emirates, via
a holding company which is under the direct control of Dubai's ruler and
current Prime Minister of the United Arab Emirates, Mohammed bin Rashid Al
Maktoum.]
On February 13 2006,
the stockholders of Peninsular and Oriental Steam Navigation Company, a British
firm, agreed to a sale of that company for $6.8 Billion to DPW over a bid by
PSA International of Singpore. [No
American firms bid on the deal.] As
part of the sale, DPW would assume the leases of P&O to manage major
U.S. port facilities in New York, New Jersey, Philadelphia, Baltimore, New
Orleans, and Miami, as well as operations in 16 other ports.
After P&O
stockholders approved the deal, the arrangement was reviewed by the Committee
on Foreign Investment in the United States Treasury Department. The transfer of leases was approved.
Then the American
mass media decided they knew better than the shareholders of the
Peninsular and Oriental Steam Navigation Company who should buy their
company. The media decided to get
involved, and the comedy of errors was off and running.
I would guesstimate that at least 95% of the reports
about this story over the last two weeks have been just plain wrong. And as the erroneous reporting snowballed, a
lot of uninformed Americans got riled up about it. So of course, Congress decided it should get involved, too.
Fueled by uninformed
reporters repeating their erroneous coverage of the whole deal, the hysteria
exploded. Misleading polls asked
leading questions, and the predictable negative results were used as
justificatin for Congress to jump into the situation. The tried and true concerns over “national security” were the
basis for questioning the deal. If it
worked for UFO’s, it would work for this story.
The notion of
foreign ownership of the company that manages operations in these ports didn’t
seem to be a concern when the company was owned by a British company. But because Dubai Ports World is a company
owned by the government of Dubai, in the United Arab Emirates, suddenly we
should worry about “national security” in our ports.
Remember, the deal
involves the management of day to day port operations. The question of security will still be
handled by the U.S. Coast Guard.
Inspection of the cargo containers is still the job of U.S. inspectors,
not the management firm.
This whole situation
is reminiscent of the Japanese purchases of large real estate holdings here in
the U.S. in the 1980’s. Everyone was so
concerned that maybe the Japanese would somehow tear down landmark buildings
and, what, ship them to Japan? Will the
UAE close down the U.S. ports and relocate them somehow back to the UAE? Not gonna happen.
The United Arab
Emirates has transformed it’s economy from primarily oil-based to one based more on
international trade. They’re not about
to close the ports of the largest trading partner in the world. And not even Osama bin Laden has $6.8
billion to spend just to put a bomb into American ports. There are much cheaper ways to strike us.
The people of the UAE
are some of the richest people in the world.
Rich people, no matter where they’re from, tend to want to retain their
money, and ensure that the stream that produces that money doesn’t dry up. Harming America or just plain pissingus off
is one of the last things they want to do.
It must be a slow
news cycle if this story has stuck to the front pages for more than 2 weeks
now. And with all the problems in
Congress, this is not something they need to stick their noses into. Oh, I forgot, this is an election year. Maybe a few Members of Congress can tap this
perceived new source of money by threatening to outlaw the deal. Hey, it worked when Microsoft was
threatened, so why not try it with Dubai Ports World.