Congressional opposition mounts

Dubai: Even as opposition mounts in the US Congress, DP World wrapped up its purchase of P&O, which will give the Dubai-owned company operational control of six US ports.

Stock of the British-based P&O was delisted yesterday, and shareholders in the company will be paid by March 16, DP World said in a release.

"The deal is done. P&O shareholders will get their cash next week," said John Lawson, a transport analyst with Investec. "The bit which is still in the air is will the Americans prevent DP World from taking over the American ports."

A US House of Representatives committee on Wednesday voted overwhelmingly to block an Arab-owned company from managing American ports, defying President George W. Bush who has vigorously supported the deal.

By a vote of 62-2, the House Appropriations Committee approved a measure to stop the DP World from managing ports on the Eastern seaboard.

A vote by the full House could come next week on the legislation, which was attached to a must-do bill providing more emergency funds for the war in Iraq and for rebuilding Southern states hit by hurricanes last year.

The amendment did not try to force broader controls on foreign investment in US facilities, as some lawmakers have suggested.

Norman Ornstein, a resident scholar at the nonpartisan American Enterprise Institute for Public Policy Research in Washington DC, said he fully expects the bill including the anti-DP World amendment to be approved by the House. "The more significant question is if it makes it through the Senate, where the president has more support," Ornstein told Gulf News.

Bush enjoys the support of at least one key Republican, Thad Cochran of Mississippi, who chairs the Senate Appropriations Committee and will shepherd the emergency spending bill through the Senate.

Senate Armed Services Chairman John Warner is also planning a last-ditch legislative effort to rescue DP World's port takeover, Bloomberg reported.

Warner's measure will be introduced "within a week'" and would require DP World to ensure the security of the facilities, spokesman John Ullyot said yesterday. He said the legislation is still being drafted and declined to say what it would require of the company.

President George W. Bush, who has threatened to veto legislation blocking the Dubai ports deal, has not changed his position, the White House said on Thursday.

However, even if Bush does veto the bill, there is a good chance Congress will override him, Ornstein said. "What will happen when the president exercises the first veto of his career? More than likely he'll be overridden. This is an extremely unpopular thing," he said.

Even if DP World is banned from taking over the US ports, there is next to nothing that can interrupt its takeover of P&O. At most, Lawson said, the Dubai firm will have to divest itself of the US terminals. "At the end of the day, this isn't going to send a friendly message to the Middle East," he added.

- With input from Reuters