Published January 13, 2015
Dubai Ports World warned Thursday that its deal to sell off major port operations in six U.S. cities may fall apart if the Port Authority of New York and New Jersey doesn't drop demands for a multimillion-dollar payment.
DP World, based in the United Arab Emirates, is trying to finish the sale of U.S. port operations it acquired last year, which caused an outcry among U.S. politicians who said the United Arab Emirates-based company could endanger national security.
"I've carried a lot of water for the Port Authority," said 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."
"Asking for this large a fee is greedy," Schumer said of the authority's payment demands.
DP World struck a deal in December to sell the U.S. operations to AIG Global Investment Group for an undisclosed sum, but the final sale has been delayed by the Port Authority's request for tens of millions of dollars from the prospective new owners.
"If the Port Authority continues with its unreasonable request, the sale will fail," wrote DP World CEO Mohammed Sharaf and AIG managing director Christopher Lee to the agency in a letter dated Thursday and obtained by The Associated Press.
Port Authority officials said they want compensation for roughly $30 million in past improvements to the Port Newark Container Terminal — and a commitment from AIG for future infrastructure work — but in the letter the two companies charge the agency is seeking a fee of $84 million.
The yearlong saga of trade deals, terrorism fears, and turf fights took another strange twist as Menendez and Schumer, two of DP World's loudest critics last year, found themselves defending the company's new deal and blasting their own states' port agency.
"You can imagine our chagrin, you can imagine how upset we were to learn that, of all people, the Port Authority is throwing a monkey wrench in this deal," said Schumer, adding: "I wouldn't call it a shakedown in the traditional sense, but I would say that the Port Authority is trying to exact a huge price at the last minute in a very unseemly way."
Port Authority spokesman Stephen Sigmund insisted Wednesday that his agency was "not looking to hold up anything."
DP World is the world's largest marine terminal operator with 51 terminals in 24 countries. It announced in December that it had struck a deal to sell AIG the U.S. operations, which include six major U.S. seaports in New York/New Jersey, Philadelphia, Baltimore, Miami, New Orleans and Tampa, Fla.
AIG Global Investment Group is an asset management firm with more than $635 billion in assets. Its parent company is the New York-based insurance firm, American International Group Inc.
The deal also involves stevedoring operations in 16 locations along the eastern seaboard and Gulf Coast and a passenger terminal in New York.
The U.S. holdings were valued last year at roughly $700 million, but the companies did not disclose the sale price.
Sigmund said Dubai Ports World has "made a pretty substantial profit here, and we want AIG to make a commitment to reinvest money in the capital projects so that we're sure they're going to operate the terminal responsibly."