US accepts 45-day review of Dubai ports deal

WASHINGTON, Feb 27: The Bush administration said it would grant a request by Dubai Ports World for an additional 45-day review of its contested takeover of terminal operations at six major U.S. ports.

DP World had said yesterday it was seeking further review in order to allay US lawmakers' national security concerns about handing management of the port terminals to a company owned by the government of Dubai in the United Arab Emirates.

''Upon receipt of the new notification, CFIUS (Committee on Foreign Investment in the United States) will promptly initiate the review process and fulfill DPW's request for a full investigation,'' the agency said in a statement.

The request, made jointly with the US unit of British company P&O, gives the Bush administration time to convince members of the U.S. Congress not to block the deal.

''We are confident the further review by CFIUS will confirm that DP World's acquisition of P&O's US operations does not pose any threat to America's safety and security,'' Ted Bilkey, chief operating officer of Dubai Ports, said in a statement.

The White House said it was pleased the company had reached made the additional overture to the US Congress, but added that the purchase had already been closely scrutinized for security concerns.

''We believe, however, the additional time and investigation at the request of the company will provide Congress with a better understanding of the facts, and that Congress will be comfortable with the transaction moving forward once it does,'' White House spokesman Scott McClellan said in a statement.

Many lawmakers fear the Dubai-based port operator could allow militants to attack the United States. They also were outraged that CFIUS approved the deal giving the state-owned company control of terminals at the six ports, including New York, without conducting the additional 45-day review to thoroughly examine potential national security concerns.

Dubai Ports said last week it would proceed with its 6.85 billion dollars takeover of P&O on March 2 making it the world's third-largest port operator but not immediately assume management of the US port terminals.

STEP FORWARD

President George W. Bush has strongly backed the ports deal and threatened to veto any legislation blocking it.

But Bush national security adviser Stephen Hadley said on CNN's ''Late Edition'' it was clear members of Congress needed more time to understand and review the deal.

The White House says the United Arab Emirates is a staunch ally in the US war on terrorism and has worked to close the loopholes that allowed al Qaeda operatives to use it as a financial and logistical hub before the September 11 attacks.

The companies' decision to ask for an extended review followed intense consultation with congressional leaders.

Senate Majority Leader Bill Frist, a Tennessee Republican, had recommended the companies voluntarily seek an extended review.

Senate Armed Services Committee Chairman John Warner, a Virginia Republican, told NBC's ''Meet the Press'' he met with Bilkey this weekend to discuss the deal and was given a copy of the agreement between Dubai Ports and P&O Ports North America asking for the 45-day review.

Warner said Dubai Ports already operates in more than 30 countries.

Sen. Charles Schumer, a New York Democrat and leading critic of the deal, said the request for a 45-day investigation ''is a significant step forward, but the devil is in the details.'' Congress must have a 30-day opportunity after the extended review to block the deal if it still has concerns, Schumer said. He also called on the administration to make public the results of the new investigation.

As part of its request for an extended review, Dubai Ports pledged to guarantee the independence of all terminal operations now managed by P&O North American Ports (POPNA) by establishing that as a separate business unit.

It also pledged to keep POPNA's current management and not to try in any way to influence the unit's operations. POPNA's chief security officer will remain a U.S. citizen unless the US Coast Guard agrees otherwise, the company said.

REUTERS