Sun, Feb 18, 2007 - Page 6 News List

NY port authority seals deal on port leases


A day after two US senators called the Port Authority of New York and New Jersey greedy and obstructionist, the agency signed off on a deal that lets DP World, a Dubai-based port operator, sell its leases to AIG Global Investment Group.

In return for its consent, the Port Authority will receive US$10 million from AIG to help pay for an overpass that will make it easier for trucks to deliver containers from the firm's terminal to train lines. AIG also agreed to spend more than US$40 million improving operations at its Port of Newark terminal.

The agreement was something of a compromise by the Port Authority, which had asked for US$30 million to cover investments it had made on behalf of DP World and a US$50 million commitment from AIG to spend on the port.

The deal all but closes a politically charged debate over which companies should run port terminals in the US, and in particular the New York area. DP World, the port operator owned by the royal Maktoum family of Dubai, United Arab Emirates, inadvertently set off a firestorm last year when it bought P&O Ports North America, a British company that operated ports in New York, New Jersey, Philadelphia and elsewhere.

Concerned about security at the ports, Congress members demanded that DP World sell its leases to operate terminals in six cities in the US to a US firm. In December, DP World and AIG Global Investment Group, an arm of the US insurance giant, reached an agreement estimated at more than US$1 billion.

Five other port authorities, including in Philadelphia and Miami, had consented to the handover without any financial conditions.

DP World and AIG called the request for compensation by the Port Authority of New York and New Jersey unprecedented and unreasonable.

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