Dubai presses on with port takeover despite US vote

DUBAI, Mar 9 (Reuters) Dubai Ports pressed ahead with a takeover that gives it control of six major US ports despite a Congress committee vote to block the deal.

Government and company officials in the United Arab Emirates declined comment yesterday's vote by US lawmakers to block the deal on the grounds that handing the ports over to a Gulf Arab state-owned firm would threaten US national security.

But sources familiar with the deal said the vote had not taken Dubai Ports any closer to relinquishing the six ports at the centre of a political firestorm.

''The vote in the House of Representatives has not changed anything in that respect. We are not at that point,'' one Dubai-based source said.

Dubai Ports said today it had completed the acquisition of P&O, adding that it hoped the US review of its operations would be resolved soon.

''A review of our operations in the United States continues and we look forward to a timely resolution of any issues. We will continue to hold our US operations separate while this process continues,'' Mohammed Sharaf, DP World's chief executive, said in a statement.

The statement said P&O shares have been delisted.

DUBAI: NO PLANS TO SELL The Web site of Britain's Financial Times newspaper (www.ft.com) had reported that private equity groups had approached DP World about buying its US operations.

DP World's Sharaf told the newspaper in an interview published on Thursday that his company would not consider selling its US operations.

One source in Washington said Dubai Ports had no plans to sell its newly-acquired US operations.

''DP World has received lots of approaches but is not considering any such options,'' the source, close to the firm, said.

Analysts said the political furore was bound to provoke businesses in the world's biggest oil exporting region, which is an increasingly important source of financing for the huge US current account deficit.

''It's American double standards. Do you think that businesses and governments here won't react and even retaliate?'' said Wadah Al Taha of the National Bank of Abu Dhabi.

He said the issue was likely to feature prominently in trade talks later this month between the United States and the UAE, a federation of seven emirates that includes Dubai.

The Dubai Ports row has reinforced fears in the Middle East that investments in the United States have become politically risky for Arabs and Muslims. Some Arabs say the US opposition to the deal smacks of racism.

Some US politicians say the UAE has in the past been sympathetic to Islamist militants, noting that two of the September 11 hijackers came from that country.

President George W Bush, however, says the UAE is a staunch ally in the US war on terrorism and he has vowed to veto any legislation that would block the ports deal.

Yesterday's 62-2 vote, by the House Appropriations Committee, will be followed next week by another vote by the full House of Representatives.

Dubai Ports officials said they were pushing ahead with plans to integrate British ports group P&O which runs the US ports.

Dubai Ports Chairman Sultan Ahmed Bin Sulayem and Sharaf fly to London this week to discuss integration of the two companies which make up the world's third largest ports group.

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