The saga of foreign ownership and management of US ports took a tabloid turn on Thursday. DP World and its partner, AIGGIG, released a letter that accused — in veiled langauge — the Port Authority of New York and New Jersey of extortion. The Port Authority (PA) retaliated by accusing DP World of trying to "[extract] benefits through the press."
Central to the tussle is the Port Newark Container Terminal (PNCT), an advanced 180 acre container terminal, capacity of 1 million containers (measured in 20-foot equivalent units) with 4,400 feet of deep water wharf.
Sen. Charles Schumer (D-NY) and Sen. Robert Menendez (D-NJ) "threaten[ed] political payback against the Port Authority." Menendez: "I have no intention of carrying any water for the Port Authority if they cannot consummate this deal for the national security of the people of our region and our nation." Schumer said the PA is being "greedy."
Perhaps they didn't understand that DP World and AIGGIG, after three requests since mid-December, had "[o]nly in the last 48 hours... begun to share any of the information that the PA requires in order to exercise its fiduciary responsibility." Or that the "greedy claim" reported in the press is more nuanced in the letter exchange.
Moreover, the citizens of New York and New Jersey own 50 percent of the terminal. Is it not reasonable for the Port Authority to review information about "the financial viability and the actual ownership of PNCT following the proposed sale to AIGGIG"? Is it not reasonable to recoup public investment that has increased the value of the property?"
Back Story
DP World purchased the assets of British P&O in 2006, making it the third largest container port operator in the world. When Congress learned the extent of P&O's business in the United States (a figure consistently underreported), the hue and cry that followed led to a promise to sell the US business to a domestic firm.
In December, an unnamed AIG "member company" (pdf) won the bidding war. The AIG Global Investment Group is "a group of international companies which provide investment advice and market asset management products and services to clients around the world."
In the 11 December 2006 press release, AIGGIG states that the business that it is purchasing "principally comprise marine terminal concessions in the ports of New York/New Jersey, Philadelphia, Baltimore, Miami, Tampa and New Orleans, coupled with stevedoring operations in 16 locations along the East and Gulf Coasts and a passenger terminal in New York City." This is the expanded facility list that I've been talking about for a year. AP and Bloomberg are still talking about six facilities.
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