Schumer, Menendez Blast Port Authority Of NY/NJ For Holding Up Dubai Ports World Deal

Schumer, Menendez Blast Port Authority Of NY/NJ For Holding Up Dubai Ports World Deal

Senator Charles E. Schumer today highlighted the stumbling block posed by the Port Authority of New York/New Jersey that is holding up the completion of the Dubai Ports World deal. Schumer urged the Port Authority to abandon its unprecedented request for $84 million as a condition of giving its consent to the deal and called on the Port Authority not to stand in the way of deal with major national security significance. "We've fought long and hard to bring these ports back to U.S. hands after they were sold to Dubai Ports World through a process riddled with flaws, but now that we're finally on the brink of a sale that will return the ports to a U.S. company, our very own Port Authority of New York/New Jersey is jeopardizing the entire sale. The Port Authority needs to back down from this excessive fee and allow this sale to go through. The Port Authority has never demanded this type of fee before, and I'm astounded that they are trying a new experiment with a deal that is so important to our country's security." Schumer said.

"The concerns I expressed a year ago are still valid today: A company run and controlled by a foreign government should not run and control the operations of American ports," Menendez said. "All parties involved in these negotiations should remember that this is not just a business transaction, but also a matter of national security. I urge them to finalize this deal quickly."

The port holdings in question were initially sold to Dubai Ports World by P & O Ports North America. After considerable concerns were raised in Washington, chiefly by Senator Schumer, about the process that initially approved the transfers of these ports and terminal operations to foreign ownership, Dubai Ports World agreed to sell off its U.S. acquisitions. In December, Dubai Ports World announced that it had struck a deal to sell the holdings to AIG Global Investment Group. The U.S. operations being sold include seaports and terminal operations in New York/New Jersey, Philadelphia, Baltimore, Miami, Tampa, Fla., and New Orleans. The Port Authority of New York/New Jersey, which owns the Port Newark Container Terminal slated to go to AIG, must give its consent to the transfer of the lease in order for the deal to close.

The sale of the Port Newark Container Terminal requires the approval of the Port Authority. One unexpected condition for that approval is the request for a fee of $84 million that the Port Authority is attempting to charge as a condition of approving the lease transfer. While the selling price is not disclosed, Dubai Ports World's U.S. holdings were valued at $700 million prior to their sale, and the proposed fee to be levied on the transfer of a single terminal would represent over 10% of that value. The Port Authority has reportedly never before demanded this type of fee as a condition of approving the transfer of a terminal lease.

http://schumer.senate.gov/SchumerWebsite/pressroom/record.cfm?id=269900