There's nothing erroneous about the FACT I presented. The editorial specifically stated that DPW -- through its acquisition of Peninsular and Oriental Steam Navigation Co. (also known as P&O Nedlloyd to those who have seen their containers in intermodal yards or on the nation's highways) -- would be acquiring six U.S. ports. This is utterly and completely FALSE, as P&O doesn't OWN a single one of these facilities.
Separately, the Port Authority of New York and New Jersey said it will conduct its own review of the deal and urged the government to defend its decision. In a letter to the Treasury Department, Port Authority chairman Anthony Coscia said the independent review by his agency was necessary "to protect its interests."
The Port Authority of New York and New Jersey -- not P&O -- owns the port facilities in the New York harbor. P&O jointly operates (with a company called Port Newark Container Terminal) of one of the Port Authority's seven container terminals under a lease arrangement with the agency. If there are any details of the proposed acquisition that the Port Authority finds unacceptable, the agency can simply terminate the operator's lease on the property and prohibit any vessels from the UAE-owned company from making port calls in New York and New Jersey.
Man, there's been some really TERRIBLE reporting if what you say is true.
It's going to be really interesting to follow the development of this story. Thanks for the info.
Actually, it isn't quite that simple. These are long-term leases and concession agreements. IIRC, in some cases (depending on the port), the port authorities enter into land leases and the operators own and finance the improvements (facilities) and in some cases, separate investment companies own the improvements. But the point is still, containers are shipped into and through the ports by a company that has questionable loyalty to the U.S.
And as to the lease provisions that permit the Ports to merely cancel the leases...again, it isn't as simply as that I imagine. When there are hundreds of millions of assets involved, the cancellation provision are quite complicated and if there is a cancellation, I would think there would be complicated unwinding procedures for just compensation to all parties.
I do agree with your point that the operators are not buying the ports. I think that was naive of the writer of the article to make such a statement.
But I repeat, this acquisition by Dubai Ports World needs very careful analysis. It does give an islamic country tantamount ownership (if partially through long-term lease agreements) in major U.S. ports.
P&O Ports is the P&O Group company responsible for port development, investment, operating and stevedoring activities. It operates approximately 31 container, general cargo, and passenger terminals in New York, New Jersey, Philadelphia, Baltimore, Miami, New Orleans, and Vancouver, and half of Norfolk's CP&O Ports Virginia, the largest stevedoring service in Hampton Roads.
A little background history:
International Terminal Operating Company, Inc. (ITO) was founded in 1921 by Captain Franz Jarka. Originally called The Jarka Corporation, the company specialized in handling freight and passengers in the Port of New York. Soon, The Jarka Corporation expanded its services to encompass the ports of Boston, Philadelphia, Baltimore, and Hampton Roads, Virginia. In 1962, ITO was acquired by Ogden Corporation. In 1983, the company merged with John W. McGrath Corporation, which included Atlantic and Gulf Stevedores, Inc. and integrated their North Atlantic and Gulf Coast operations. Ogden and McGrath continued to share ownership of ITO.ITO opened its first public container handling facility in 1967, and it was among the first to utilize computers in its terminal operations. The company used the latest technology to coordinate all its port activities, including receiving and delivery functions, cargo documentation, and terminal security. ITO worked with many of the largest container, break-bulk, and specialized cargo carriers in the world and became one of the largest stevedores and marine terminal operators in the United States. In 1999 the United Kingdom-based Peninsular and Oriental Steam Navigation Co. (P&O) acquired ITO. The company then became part of P&O Ports, one of P&O's many subsidiaries. P&O Port's operations spanned 17 countries around the globe. In all, P&O Ports ran 24 container terminals in 84 ports.
And now, for the sum of $6.8 billion, Dubai Ports World (DP World) is the proud owner of the former P&O Ports.
And as noted in Forbes (during the bidding war for acquisition of P&O):
DP World made the first formal approach for P&O in November, when it offered 3.3 billion pounds ($5.9 billion) for the 165-year-old company.A deal would make the combined company the third-largest ports operator in terms of capacity, lifting DP World up from its current rank as No. 7.
The concern, of course, is that DP Worlds is state owned, that Dubai has a rather ignoble history of ties to terrorist funding and transit, that DP Worlds' ownership rights over existing North American terminal infrastructure and operations comes complete with extant leasehold, stevedoring, wharfage, and seaway rights, and that the CFIUS did not conduct a 45-day investigation on top of the initial 30-day review that it usually gives to foreign purchases of U.S. businesses
By the way, that 30 day window was for the approving committee itself to voice objections.
Thank you for the clarification. That Schumer is involved made me highly suspicious.