WASHINGTON (AP) – Dubai Ports World warned Thursday that its deal to sell off major port operations in six American 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 American port operations it acquired last year.
That acquisition was attacked by U.S. politicians who charged the sale threatened national security, a dispute which proved to be a major black eye for the Bush administration which originally approved the sale.
As a result of the criticism, DP World struck a deal in December to sell the American 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 past improvements to the Port Newark Container Terminal, roughly $30 million, but in the letter the two companies charge the agency is seeking a fee of $84 million.
“We’re not looking to hold up anything,” Port Authority spokesman Stephen Sigmund, said Wednesday.
Dubai Ports World, based in the United Arab Emirates, 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, Tampa, Fla., and New Orleans.
The deal also involves stevedoring operations in 16 locations along the eastern seaboard and Gulf Coast and a passenger terminal in New York.
The American 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.”