Dubai Ports Agrees to Delay Takeover

Dubai Ports World moved today to defuse opposition to its contentious takeover of US seaports by announcing a delay in assuming control of the facilities.

Under a $6.8bn (£3.9bn) deal to buy Britain’s P&O, the historic ports operator, Dubai Ports will assume responsibility for six big US ports, including those of New York, Miami and Baltimore.

However, leading Republicans and Democrats have balked at such a takeover on security grounds. In an effort to placate vocal opponents of the deal, Dubai Ports (DP) agreed to hold off taking control of the ports to allow for further discussions between the administration and congress.

But DP said the takeover would proceed on schedule in spite of the controversy in the US.

The delay in taking control in the US leaves American and British executives in charge of seaport operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

Dubai Ports, based in Jebel Ali, in Dubai, plans to complete the purchase of P&O on March 2. March 16 will be the final date on which P&O investors will receive the 520p a share that the Dubai company agreed to pay. "It is not only unreasonable but also impractical to suggest that the closing of this entire global transaction should be delayed," DP said in a statement.

Peter King, a Republican from New York and a chairman of the House homeland security committee, described the delay in the US as "definitely a positive step".

But Mr. King, one of the fiercest critics of the deal, said the White House must still disclose new details about the administration’s review and approval of the agreement last month.

DP has expressed bewilderment over the security concerns voiced in congress.

"The reaction in the US has occurred in no other country in the world," Mr. Bilkey, the chief operating officer, said in a statement. "We need to understand the concerns of people in the US."

The port takeover has sparked a political furor that has taken the White House by surprise. Both Republicans and Democrats have threatened to introduce legislation to block or delay the deal, citing unease over what they describe as inconsistent support against terrorism by the United Arab Emirates. Dubai is the second-largest member of the UAE federation, from which two of the September 11 hijackers came. Senator Carl Levin of Michigan, the top Democrat on the senate armed services committee, asked whether the review that gave the green light to the deal had examined alleged links between government officials in the UAE and Osama bin Laden before the September 11 attacks.

The White House noted the UAE contributed $100m to help victims of Hurricane Katrina just weeks before Dubai Ports sought approval for its business deal. It said the money was nearly four times as much as the administration received from all other countries combined but denied any connection between the donation and the pending deal.

George Bush has threatened to veto any legislation that seeks to block the takeover.