US ports deal called off amid political outcry

US: An Arab-owned company has abandoned its attempt to take over the running of six American ports following a massive political…

US: An Arab-owned company has abandoned its attempt to take over the running of six American ports following a massive political outcry that saw Republicans in Congress defying the White House with threats to block the deal.

Dubai Ports World ended weeks of controversy yesterday by announcing that it would transfer ownership of the ports, which it had bought from Britain's P&O, to an American company. The announcement came a day after a Senate committee voted overwhelmingly to block the company, which is owned by the government of Dubai, one of the United Arab Emirates, from taking over the ports.

"Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, Dubai Ports World has decided to transfer fully the US operations of P&O North America to a United States entity," the company said in a statement.

The move will come as a relief to President Bush, who had threatened to veto any Bill blocking the ports deal.

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Opposition to the takeover had gained such strength in recent weeks that critics claimed they could muster the necessary two-thirds majority in Congress to overturn a presidential veto if necessary.

Republicans welcomed yesterday's announcement, but New York Democratic Senator Charles Schumer said that that if the Arab-owned company ultimately retained control over the port operations, "I don't think our goals would be accomplished and obviously we will need to study this agreement carefully".

On Wednesday evening, the House Appropriations Committee voted 62 to 2 to forbid the ports deal, with almost all Republicans joining in open revolt against the White House.

New York congressman Peter King, Republican chairman of the House Homeland Security Committee, said he was waiting to see the details of the new plan.

"It would have to be an American company with no links to Dubai Ports World, and that would be a tremendous victory and very gratifying," he said.