Port Authority Head Tells Why He is Blocking Deal

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The chairman of the New York and New Jersey Port Authority, Anthony Coscia, has filed a lawsuit to block Dubai Ports World from taking over operations, and saying the current operator, London based Peninsular & Oriental Steam Navigation Co., violated its lease by failing to obtain the authority’s consent for the takeover.


The case is scheduled to be heard March 9 in state Superior Court in Newark.


In an interview with the Associated Press, Mr. Coscia answered questions about the Dubai deal and port security.


Q: Why should port security be as important as airline security?


A: Since September 11, 2001, Americans understandably have focused on security in the services they use and see everyday, like airlines, tunnels, bridges and railroads. But port security is too often an afterthought until an issue like Dubai Ports World arises. More than 15 million containers of cargo travel through American ports every year, originating from ports throughout the world. But only 5 to 8% of those containers are physically inspected.


That means that everyday tens of thousands of containers are traveling through our ports without being inspected, and their contents subsequently distributed throughout the country. This system leaves us at much greater risk of being exposed to hazardous materials, weapons of mass destruction, or people being smuggled in through our ports.


There simply has not been the level of commitment needed from the federal government to secure our ports. For example, the Port Authority has invested more than $70 million on port security improvements since September 11, and we’ve received only $10 million from the federal government.


Q: What are the problems with this deal?


A: The biggest problem was the process. The Port Authority, the governor of New Jersey, our congressional delegation, and the general public were essentially blindsided that a deal was in the making and, in fact, already approved. Secondly, the transaction required Port Authority consent, which was neither requested nor obtained. While the Bush administration has stated that there are no concerns with this transaction, they have also refused to share information to give us any confidence that security will not be negatively impacted.


So it’s not foreign ownership of ports that is at issue here. Foreign entities can be and are responsible operators. And we as port owners in this post-9/11 world must be able to reward those entities that put cargo security at the top of their agenda and act as a strong link in the port security chain, and punish those that don’t. The problem in this case is that we simply have no information for the administration to know which category Dubai Ports World falls into.


Q: Why did the Port Authority sue?


A: We sued because a clause in our lease agreement with our tenant, Port Newark Container Terminal, makes it clear that the Port Authority must give written consent when there is a significant change in ownership at the facility. That consent was not sought in this case and therefore we have no information to determine whether or not this transaction will be in the best interests of the people of the region.


Q. What role does the port operator play, and why does a change in ownership matter?


A: Port operators like PNCT (Port Newark Container Terminal) are responsible for handling cargo, loading and unloading ships, and operating all aspects of the marine terminal facilities they lease. This means they of course must work hand-in-hand with the Coast Guard, Customs, the Port Authority, and all state and local officials on security matters, from who has access to their facilities to cargo security to identification and patrol of restricted areas, to name just a few.


The president says this transaction will not have an impact on port security because the Coast Guard and Customs and Border Protection will continue to bear considerable responsibility for security. That minimizes the critical role every part of the supply chain, including terminal operators, plays in port security from when a container is packed overseas until it arrives and is unpacked at our ports.


Q. What role does private enterprise play in port security?


A: Every part of the supply chain plays an enormous role in port security. In large part because the federal government has not yet developed a comprehensive mechanism for ensuring cargo security, we continue to rely on private sector operators as a critical link in the port security chain. That’s a link we have to know is strong, and that’s why a secretive process in the Dubai Ports World case gives us so much concern.


Q. What have you learned from this?


A: I’ve continued to learn that being proactive is better than being reactive, and that’s why we as an agency and as a country need to take advantage of this moment to finally acknowledge and address the real security threats our ports face every day. We need to implement national minimum cargo security standards, a uniform system of checking and identifying every worker at every port, and a real focus on coordinated response and recovery plans.


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