The mood in Congress is ominous, with calls being heard for a divestment of foreign interests from port operations in all US ports. Most terminals at west coast megaports in Los Angeles and Long Beach are operated by wholly owned subsidiaries of foreign shipping lines or joint ventures involving overseas companies. Inchcape Shipping Services, which arranges pilots, tugs and dock workers for shipping companies at a number of American ports and works with the US Customs, is owned by United Arab Emirates investment firm Istithmar.

President Bush is not the only one to worry that blocking the P&O investment by a company from a country considered a 'valued and strategic partner' will affect the judgement of other foreign firms considering investment in America.

Dubai Ports World has completed its acquisition of the 90% of P&O's global ports portfolio not in America. The Dubai Government backed operation paid £3.9bn for a package which moves it into third place among global terminal operators.

A sale of P&O Ports North America is expected to take four to six months to complete, complicated by the fact that the operations in Philadelphia, Baltimore and New Orleans are not considered sufficiently competitive and DP World paid over the odds to acquire them.

Until they are sold, P&O's American ports will operate independently from DP World.

MJ Information No: 21627