February 24, 2006

Port Authority sues over Dubai control of NJ port

By Jon Hurdle

PHILADELPHIA (Reuters) - The Port Authority of New York and
New Jersey filed a lawsuit on Friday to stop a United Arab
Emirates company from taking over management of its container
terminal at Port Newark in New Jersey.

The authority, jointly owned by the states of New York and
New Jersey, argued that the deal under which state-owned Dubai
Ports World would take over management from the British company
P&O violates the terms of P&O's lease.

The transaction is part of a $6.85 billion deal under which
DPW would manage terminals at six major U.S. ports. The plan
has sparked protests from federal and local lawmakers and
officials who fear the ports' security will be hurt if they are
managed by a company whose owner has been accused of having
links with terrorist groups.

The Port Authority said it has a right to review changes in
port management under the existing lease agreement. The
lawsuit, filed in the Superior Court in Newark, urged the court
to declare that the purchase of P&O requires consent of the
Port Authority under the lease, that the container terminal is
in breach of its lease, and that the lease is terminated.

The suit names P&O Ports North America, and Port Newark
Container Terminal LLC as defendants.

Lawmakers opposed to the takeover noted links between UAE
and al Qaeda but President George W. Bush has defended the
deal, calling the UAE an ally in the war on terror.

"The Port Authority has been deprived of its right to
conduct a thorough review of the purchase ... of the identity,
qualifications, experience and reputation of the purchasers ...
and of the proposed impact that the change may have on the
control and ownership," the lawsuit said.

New Jersey Gov. Jon Corzine urged the other governors of
states with ports affected by the DPW deal -- Louisiana, New
York, Florida, Connecticut, Maryland and Pennsylvania -- to
join the lawsuit.

Democrat Corzine issued the invitation in letters to each
governor, saying the lawsuit "will seek to enjoin this sale of
vital assets to a foreign nation without our states having had
the opportunity to determine the extent of the threat to the
safety of our citizens."

In London, a U.S. company at the Port of Miami, Eller & Co.
Inc., filed a petition in High Court opposing the takeover.

On Thursday, the State of New Jersey sued the federal
government to block the deal.

Officials at P&O Ports North America did not return phone
calls seeking comment.

New Jersey Sen. Robert Menendez on Friday dismissed DPW's
offer to delay assuming control of the port terminals.

"We can't rely on non-binding promises from foreign
governments to secure our ports," he said. "If the Bush
administration will not stop this deal from closing, Congress