Under Pressure, Dubai Company Drops Port Deal

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March 9 — The state-owned Dubai company seeking to manage some terminal operations at six American ports dropped out of the deal on Thursday, bowing to an unrelenting bipartisan attack in Congress that swept aside President Bush's efforts.

How the Clock Ran Out on the Dubai Ports Deal (March 10, 2006)

DP World and U.S. Trade: A Zero-Sum Game (March 10, 2006)

News Analysis: Suddenly, a Rebellion in the G.O.P. on a Signature Issue (March 9, 2006)

In Break With White House, House Panel Rejects Port Deal (March 9, 2006)

Faulty Screening of Truck Drivers Puts Ports at Risk, New Report Finds (March 9, 2006)

G.O.P. Leaders Vowing to Block Ports Agreement (March 8, 2006)

Doubts Back Home Fuel G.O.P. Worries Over Ports Deal (March 2, 2006)

Coast Guard Had Concerns About Ports Deal, Papers Show (February 28, 2006)

Gaps in Security Stretch From Model Port in Dubai to U.S. (February 26, 2006)

The Reaction: Panel Saw No Security Issue in Port Contract, Officials Say (February 23, 2006)

Timeline of a Troubled Deal

Forum: National Security
The company, DP World, said that at the direction of Dubai's ruler it would "transfer" to a still-unnamed American company the leases to manage some of the busiest terminals in the United States, including some in New York, Newark, Baltimore and Miami.

Under questioning, the company declined to say whether it planned to sell the American operations or had some other transaction in mind.

The action averted a showdown with Congress that Mr. Bush was all but certain to lose, as signaled on Wednesday by a 62-to-2 vote of the House Appropriations Committee to reject the transfer, because it allowed the sale of some terminal operations to an Arab state company.

Senator John W. Warner, Republican of Virginia, announced the change on the Senate floor two hours before the Senate had been scheduled to vote on a motion that could have paved the way for a Democratic proposal to scuttle the deal.

Mr. Warner made his announcement amid indications that the White House was looking for a way out of the confrontation. A delegation of Republican Congressional leaders told Mr. Bush on Thursday morning that his threat to veto Congressional action against transferring control of the terminals would not stop Congress from blocking the deal.

The outcome did nothing to solve the underlying issue exposed by an uproar that has consumed the capital for weeks. A vast majority of containers that flow daily into the United States remain uninspected and vulnerable to security gaps at many points.

Some experts suggested that DP World's quick surrender might take pressure off the administration, Congress and nations around the world to solve that problem.

DP World announced its decision after the White House appeared to signal that Mr. Bush wanted a face-saving way out of the shift by declining to repeat his veto threat.

The company said the decision had been made by the prime minister of the United Arab Emirates, who is also the ruler of Dubai, Sheikh Mohammed bin Rashid al Maktoum.

"This was clearly not a business decision made by DP World," a senior administration official said. "It was a strategic decision made by the U.A.E. to avoid further damage."

In Dubai, a senior political official with intimate knowledge of the deliberations, said: "A political decision was taken to ask DP World to try and defuse the situation. We have to help our friends."

The official sought anonymity because he was not authorized to speak for the record. He was referring to Mr. Bush, who backed the initial deal, and several Republican senators who did as well.

The company's decision drew sighs of relief from officials in New York and other cities where the imminent transfer had stirred cries of alarm. But the announcement left those officials wondering which American companies might want to buy the American terminal operations. The company that DP World outbid to buy the...
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