DPW benefits from opposition by US

DUBAI — Dubai’s state-run port operator, DP World, has been anything but hamstrung by the U.S. Congress’ scuttling of its bid to run six U.S. ports.

By (AP)

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Published: Mon 26 Jun 2006, 10:39 AM

Last updated: Sat 4 Apr 2015, 1:12 PM

The company has stepped up acquisitions of global shipping terminals, growing at a furious pace. It also seems to have gained some sympathy within the industry for its handling of the dispute, which some viewed as prompted by anti-Arab bias.

"The industry feels that DP World has been treated badly and has a great deal of sympathy for them,” said Katy Aldrick, analyst with London-based Drewry Shipping Consultants. "And DP World acted with dignity throughout.”

Since March, when Congress voted to block DP World from running dockside operations in America, the world’s third-largest port operator has racked up an impressive list of deals and acquisitions, adding to its already bulging portfolio of operations in 13 countries.

In June, it landed a $210 million (euro168 million), 30-year concession to develop and run a container terminal in Peru’s Callao port near Lima.

Also this month, DP World signed a $500 million (euro398 million) deal to develop another container terminal at the Chinese port of Tianjin, China’s fifth-largest port — and the seventh Chinese port with DP World operations.

The company is due to finish construction this year on a new terminal at the Korean port of Pusan, the world’s third-largest container port. DP World won rights to run that terminal for the next 30 years.

And work is under way on a new $500 million (euro398 million) terminal in southern India and another DP World terminal in Vietnam. Late last year, the Dubai port operator bought terminals in Qingdao, China, and Yarmica, Turkey, and expanded operations in Romania.

"DP World’s rapid growth is unprecedented. No other operator has made such major acquisitions in order to expand so rapidly,” Aldrick said. Earlier this year, DP World’s $6.85 billion (euro5.47 billion) purchase of British firm Peninsular and Oriental Steam Navigation Co., or P&O, gave it control of ports in New York, New Jersey, New Orleans, Baltimore, Miami and Philadelphia — plus lesser port activities at 16 other ports in the United States.

But the deal kicked off an outcry in the U.S. Congress, where some members said they had concerns that an Arab-owned port operator could expose the United States to Middle Eastern terror groups. Bowing to political pressure, DP World promised to sell its U.S. operations by October.

Analysts said DP World is on course to meet that deadline.

Many in the Middle East felt that Congress’ opposition smacked of anti-Arab bias, and the imbroglio hurt U.S. relations with the Emirates, considered a staunch American ally.

But the U.S. opposition did not damage DP World’s business, and company officials and analysts say the firm may have won an image boost from its handling of the matter. A DP World official said privately that the company would consider returning to the United States if U.S. laws ever allowed it.

"The U.S. ports part of the P&O portfolio is only a small part of their business,” Aldrick said.

"There are many other opportunities, which they are pursuing elsewhere.”

DP World refused to comment on the sale of its American ports, believed to be worth roughly $700 million. The company has been discussing the sale with several potential bidders.

Meanwhile, a lawsuit filed in Miami seeks to block the sale of DP World’s U.S. assets.

Port Everglades, Florida, based Eller & Co., a partner with P&O at the Miami port, claims in the lawsuit that it was not consulted on a deal that made the company an unhappy partner with the Dubai-based operator.

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