Sunday, February 26, 2006

P&O options - only other bidder also "gov't owned or controlled"?

Mata Musing
PSA Int'l also gov't controlled, and has US port operations

When considering the ports deal, the big question never raised by the dissenters is... what are the options?

P&O's holdings are vast, and are being marketed as a total package. Acquiring such a large portfolio limited the bidders to the top competitors, as I pointed out what seems a lifetime ago in my original post back on the 18th of February, "UAE port operations - perspectives and reality".

Obviously, whether the current media and Congressional driven beef is union encroachment or distrust of Arab state owned gov't businesses, the only other interested purchaser was PSA Int'l, a port operations company based out of Singapore.

While sniffing around the internet, looking for American owned company options of this size (of which there are none...), what I did learn is that
there is, per the Council on Foreign Relations, one other foreign gov't owned company that leases (or leased?) terminals in the US. And that is Neptune Orient Lines.

Most U.S. port terminals are operated by foreign companies because most shipping companies are foreign owned. These companies want to have their own terminals to ensure their ships can quickly discharge and receive new cargo, Flynn says. Operation of a port terminal is first and foremost "a commercial activity," says Chuck Carroll, executive director of the National Association of Waterfront Employers. "[Companies] want to control the terminal business for their customer relations."

What sets DP World apart from other foreign companies controlling terminals at U.S. ports is that DP World is state owned. According to Carroll, the only other state-owned shipping company to have leased a U.S. port terminal is the Singaporean company Neptune Orient Lines.

So who is NOL? According to their website...

The NOL Group was publicly listed in 1981 and is the largest shipping and transportation company on the Singapore Stock Exchange (SGX). NOL currently has 1,454 million shares on issue and is a component stock of major local indices including the Straits Times Index, DBS 50 and the MSCI Singapore Free Index.

Temasek Holdings - the investment arm of the Singapore Government - is the largest single shareholder with 68%.

Hummmmm... Temasek Holdings. Now there's a familiar name that rings bells. Temasek Holdings owns 100% of the shares in PSA Int'l, per their website. Let's see... 100% of ownership of PSA by "the investment arm of the Singapore Government", who ALSO own controlling interest in a ports operations company already with leases in US ports.

I do believe that this revelation brings us back full circle. What P&O obviously had was a bidding war between two companies - both gov't owned ports operations management businesses. The only apparent difference being that one is Asian (Singapore) owned... but less obviously at a quick glance... and the other overtly, in-your-face Arab (UAE) owned.

This also throws some water on the dismay by some at the DP World purchase being financed by Sharia bonds, and the "unknown" bond holders. In both situations, we have other "unknown" financiers/bondholders/shareholders benefiting from the companies' operations who can gain information and use their profits for nefarious uses.

Lordy... wouldn't Hollywood have a field day with plots such as these? The ways to wring our hands in panic are just endless either way!

Not only does PSA's link to Singapore gov't throw the monkey wrench into the other "preferred" (per some bloggers) bidder, but such information, in light of the Clinton proposed legislation to ban gov't ownership of port operations management, brings up a couple of looming, but inevitable snafus.

Since NOL, 68% controlled by the gov'ts Temasek Holdings, already have some US port operations, just what happens when Clinton's proposed legislation passes? What about the NOL leases in place? Are they then booted out because of new federal regulations prohibiting their lease ownership?

Ahhhh...the threads and relations between the players in this scene. We obviously have only scratched the surface. And hey... I'm just a research junkie! How deep can the conflicts go when you start looking at share ownership of all the port operation facilities in the US?

Now... back to the "American owned" company options. It was my original quest when uncovering the PSA/Singapore Gov't link.

It's well known by now that, in addition to the stink raised by Congress members, the Teamsters/Longshoremen union is also hip deep in active protests. Teamsters Gen. President, James Hoffa, called for Congress to *halt* the sale... not delay... halt, on Feb 21st of this year on their website. Instead, they suggested American companies be allowed to bid.

I urge Congress to act quickly to prevent the illogical, Bush-supported sale of the current ports manager, London-based P&O, to Dubai Ports World. There are three major, reputable U.S.-owned terminal operating companies that could bid on P&O’s U.S. based assets if given the chance. They should be given that chance.

The key here is that none of the American companies are large enough to purchase P&O assets in full, but they may be able to bid on the P&O US assets only.

This, of course, is suggesting that

1 - P&O will separate the US assets from the sale, and put it out on the market with a different price tag, or

2 - DP World will still consider the sale, sans US assets.

Either way, P&O is in the financial position to sell after their ferry operation losses over the past quarters.

That's alot of "ifs", and alot of demands that are completely out of line, in my opinion. CFIUS and the WH have the right to approve/or not approve a sale between these two companies based solely on the national security risk... not the financial details. But do they have the right to tell P&O how to package their assets for sale, and who they can sell to?

And if our embarassingly misinformed Congress manages to shove their will down the throats of P&O, telling them how to divide their holdings and sell, exactly where does that precedent end?

In the meantime, I was curious about what the
American Association of Port Authorities had to say about the sale. The AAPA is a trade organization founded in 1912, representing 150 public ports in the US, Canada, the Caribbean and Latin America, plus more than 300 associate members of supporting services with interests in the seaports.

In fact, the AAPA will not take a public stand on the P&O/DP World merger. But what they do is provide a
comprehensive FAQs page on all aspects of the merger and it's repercussions. INCLUDING straightening out facts on who does what on port security.

P&O Ports is a terminal operating company that operates marine terminal facilities worldwide, including several terminals in the United States owned by public port authorities. Some press accounts have not accurately stated the nature of the business transaction involved or the resulting impact on U.S. port operations.

DP World’s purchase of P&O Ports would involve the operation of specific terminals or provision of stevedoring services (vessel loading/unloading) at some ports, but DP World would not “own,” “control,” or “take over” those ports (which would continue to be owned by the port authorities). DP World would not be solely responsible for facility security at any of the involved terminals, and the federal government would continue to be primarily responsible for maritime and cargo security.

So much to be learned that it boggles the mind. But what is most obvious is that our options are few. American companies lack the capacity to buy out all of P&O holdings. The federal gov't does not have the right to tell P&O how to package it's assets for sale. And the Port Authority association itself does not appear to be overly concerned with the port operations ownership, as it relates to national security.

This is politics, plain and clear. It's either posturing by the parties for mid-term elections, or union driven. And the American Congress and their pet media are playing the American public like marionettes.


TrekMedic251 said...

I have no problems with foreign companies operating our ports, so long as they are TRUSTED AND FRIENDLY to the US.

Most of our ports on the West Coast are operated by groups such as Norinco or Cosco, both fronts for Communist China and both deals came in under Slick Willie's watch, which still bothers me.

If we are going to reward an Arab state for supporting our anti-terror campaign, let it be Jordan, Qatar, or Bahrain, to name a few.

The UAE, in a POST-9/11 world, Mata, still plays both sides against the middle. They support our anti-terrorism only because it is to the detriment of their enemies such as Iran. The UAE, in a POST-9/11 world, still does not acknowledge the State of Israel and still covertly supports groups that wage terror against Israel.

Until they play by our rules, they don't deserve our ports.

MataHarley said...

There you go, TrekMed. "Trusted and Friendly". And it is there you could use more info than you're getting from MSM.

You need to start seeking out Gen Tommy Franks for a more complete the story on the UAE counterterrorism support. He's appeared on Tony Snow's radio and Saturday show. Few others want to hear what he has to say apparently. They prefer to get those who misquote the facts and stir up passions.

Tommy Franks ranks UAE aid right up there with Qatar and Bahrain post 911, if not higher. He credits their intel for the Afghan campaign accuracy and success. He credits activities in conjunction with the UAE for Libya's discontinuance of their WMD program.

Also remember, to totally disclose all UAE's aid and contacts, which may appease everyone's concerns, may also pose risk to the future intel they may be able to provide. Nothing like telling the enemy who's helping us specifically and how, right?

The nation is so danged uninformed on this, as well as most of Congress. Heard an idiot Congressman say yesterday CFIUS only did one meeting.... Not quite correct. One meeting to go thru the details and send every dept to the drawing board for concerns and research. Three more review meetings after that to go over findings and other concerns, plus adding conditions. Process took 90 days... labeled a "review" instead of an "investigation". Schumer and Peter King play the word game, leading people to believe there was one short meeting and no research at all.

As far as Israel, UAE port ops company boycotts any trade with them. I'm not sure I classify that as "not recognizing" them as a state, since that is not in the power of a port ops business. And sure, it's despicable. But cure all the hate in a moment? Not possible. One step at a time, guy, right?

And we still do scads of business with DP World already, with their Israeli boycott in place.

Do I trust them any more or less than Singapore or Hong Kong, who already has gov't owned port ops in the US? I think I'd trust them more. They will have tighter scrutiny not only by us, but by the int'l community since they are Arab.