by Ron Thaniel
March 6, 2006

Responding to the acquisition of six major U.S. maritime ports by a United Arab Emirates company, The United States Conference of Mayors leadership February 24 sent a letter to the Administration and Congress, urging a suspension of the proposed business transaction and an immediate commencement of a 45-day investigation on the takeover’s effects on national security.

The national debate continued to unfold into a third week on the acquisition by Dubai Ports World (DPW), which won a takeover battle for a British firm, Peninsular & Oriental Steam Navigation (P&O). For several years, this firm has operated significant operations at the port terminals in New York/New Jersey, Baltimore, Philadelphia, New Orleans and Miami. The mayors at the Conference’s 2006 Winter Leadership Meeting stated, “By taking these actions, the Administration will have greater opportunity to inform mayors, Congress, and the American public regarding the many complicated issues surrounding this matter.”

DPW asked for a 45-day review February 26 of its deal to buy management rights to the terminals. The request for a 45-day investigation was made to the Committee on Foreign Investment in the United States (CFIUS), which originally approved the transaction.

CFIUS is headed by Secretary of the Treasury John W. Snow, and comprised of eleven U.S. agencies, including the Department of Homeland Security (DHS), Defense, State, Justice and Commerce. CFIUS deliberations usually are not disclosed.

Key Congressional Committees are holding hearings on the 45-day review as well as addressing if they should have the authority to disapprove the sale.

DPW would handle terminal operations including loading, unloading, or transfer point for shipments; hiring terminal workers; and terminal security, including screening and X-raying shipments. The U.S. Coast Guard monitors and approves port security plans, and U.S. Customs and Border Protection reserves the right to inspect particular shipments.

The Conference of Mayors has long expressed serious concerns that U.S. maritime ports are ill-prepared for a terrorist attack.

In a prior communication to the Administration and Congress February 21, Conference President Long Beach Mayor Beverly O’Neill wrote, “As the home to one of the world’s largest ports, I am deeply aware of the importance of securing port cargo and operations. Our organization has been calling for important measures to strengthen port security, and we cannot understand how it is appropriate to take such a drastic risk at this time.”

Immediately after September 11, 2001, the Conference issued a National Action Plan on Safety and Security in America’s Cities. Again, in the Conference’s homeland security progress assessment released in October, the 2005 National Action Plan on Safety and Security in America’s Cities, the mayors continue to state that not enough is being done at our nation’s ports. Ports remain exposed to large'scale acts of terrorism, including weapons of mass destruction or other dangerous materials.

Since 2002, the Department of Homeland Security Port Security Grant Program has provided $630 million for seaports.

In contrast, the U.S. Coast Guard has estimated that ports would have to spend $5.4 billion over ten years to meet federal-mandated port security enhancements. That’s on top of the more than $3 billion ports have to spend already annually on infrastructure improvements and operations, maintenance and personnel expenses just to keep pace with world trade.