By David D. Kirkpatrick and Carl Hulse

Washington – DP World, the United Arab Emirates state-owned company that had agreed to buy several port terminals in the United States, said today that it will transfer those properties to an American-owned company, bowing to a political groundswell against the acquisition. The decision came just hours after a delegation of Republican leaders in Congress told President Bush in an Oval Office meeting that Congress would act within days to block the company’s acquisition of the United States port terminals in the name of national security, lawmakers present said.

“The House spoke very clearly,” Senator Bill Frist of Tennessee, the Republican leader, said in an interview after the meeting.

Announcing the company’s decision on the Senate floor about 1 p.m., Senator John W. Warner, Republican of Virginia, read a statement from the company: “Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the U.S. operations of P & O North America to a United States entity.”

The announcement did not immediately mollify Democrats, though Senator Charles E. Schumer of New York, a chief critic of the deal, called it a promising development. But he added that if the Dubai-owned company ultimately retained control over the port operations, “I don’t think our goals would be accomplished and obviously we will need to study this agreement carefully.”

Senator Harry Reid of Nevada, the Democratic leader, concurred. “We will have to wait and see what is really going to happen,” Mr. Reid said.

On Wednesday evening, the House Appropriations Committee voted overwhelmingly to scuttle the deal giving DP World control of some major seaport operations without awaiting the outcome of a 45-day review of potential security risks.

Representative Jerry Lewis, the California Republican who is chairman of the panel, added an amendment blocking the transaction to an essential emergency spending measure for the war in Iraq and for Hurricane Katrina recovery.

The vote was 62 to 2, a signal of the deep opposition to the takeover on both sides of the aisle.

The committee’s ranking Democrat, Representative David R. Obey of Wisconsin, said he regretted that President Bush had not done a better job of explaining the proposed transaction and had not been given enough time. But Mr. Obey said, “When I heard of the transaction, I thought it sounded nuts.”

Mr. Lewis’s effort was endorsed by Speaker J. Dennis Hastert of Illinois, so the vote was not exactly a surprise. But it was a stark example of Republicans breaking with their president, after years of working in tandem or quietly settling differences behind closed doors.

Source: The New York Times


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