The Dubai Deal You Don't Know About

[TomInTib]

The Dubai Deal You Don't Know About
Even as one company gives up on U.S. ports, a different Middle Eastern firm remains a major contractor for the Navy

By DAREN FONDA
With midterm elections approaching, no politician wanted to go home and explain to voters why a company controlled by the government of Dubai was taking over operations at six U.S. ports—without so much as a meow of protest from Congress. As it turns out, that won't be necessary. Dubai Ports World, the firm at the center of the controversy, announced today that it would give up its bid to manage U.S. ports, agreeing to transfer the contracts to a “U.S. entity."

Yet while one Dubai company may be giving up on U.S. ports, another one shows no signs of quitting the U.S.—or of giving up a contract with the Navy to provide shore services for vessels in the Middle East. The firm, Inchcape Shipping Services (ISS), is an old British company that last January was sold to a Dubai government investment vehicle for $285 million. ISS has more than 200 offices around the world and provides services to clients ranging from cruise ship operators to oil tankers to commercial cargo vessels. In the U.S., the company operates out of more than a dozen port cities, including Houston, Miami and New Orleans, arranging pilots, tugs, linesmen and stevedores, among other things. The firm is also a defense contractor which has long worked for Britain’s Royal Navy. And last June, the U.S. Navy signed on too, awarding ISS a $50 million contract to be the “husbanding agent” for vessels in most Southwest Asia ports, including those in the Middle East, according to an unclassified Navy logistics manual for the Fifth Fleet and a press release from ISS.

Why is a Dubai shipping services company doing business with the Pentagon when handing over U.S. port operations to the emirate would supposedly compromise national security? Because it makes sense. Call it the reality of living in a globally connected business world. Your IBM laptop is now manufactured by a Chinese company that may outsource customer support to an Indian firm and the logistics to FedEx. Dubai companies aren't just buying overseas assets like hotels in New York and wax museums in London; they're providing jobs and business for U.S. companies. Boeing, for one, can only hope it doesn't receive a frosty reception the next time it wants to sell airplanes to Dubai's booming airline, Emirates. Rival Airbus would be more than happy to take advantage of Washington's creeping protectionism.

The Navy, for one, has long understood that it would be virtually impossible to rely solely on Western-owned companies for critical services. It simply couldn’t operate without local firms providing logistics support at the 200 ports its ships visit around the world. After the bombing of the USS Cole in 2000, the Navy undertook a wide-scale review of contracting procedures, including those involving ship husbanding. As a result of that review, the Navy took several steps to increase the security of ships in foreign ports, but maintained its system of contracting. “We've been doing business in the Persian Gulf for 60 years,” says a Navy official who was unable to confirm the details of the ISS contract. Moreover, Dubai is considered one of the best-equipped ports for the Navy—it’s also a crucial logistical base for operations in the region, including those in Iraq and Afghanistan.

The rest:

http://www.time.com/time/business/article/0,8599,1171773,00.html

[queenbdem87]

1. whatever

I don't care if the country is western or not, no country that has financed terrorist activity should be running our ports! Any subsidiary of a state owned comapny owned by a country that has or is financing terrorism should be running our ports. PERIOD. Thats not to say that we shouldnt embrace globalization and allow foreign companies to run our ports as long as there are stringent security efforts enforced by the government.

[NinetySix]

5. Embrace globalization?

I find it odd that you would use such a phrase so fraught with laissez-faire overtones. I guess we've been so inundated with conservative phrases and paradigms over the last 25 years that it's hard not to talk like them. I hope you don't really mean it.

But let me hit you with the sentiments of another conservative that I myself have been taking to heart of late: shut the borders, kill free trade, impose high tariffs on the importation of foreign goods, subsidize manufacturing at home, take care of our own, neo-isolationism, etc., etc.

God help me, that conservative voice coming out of my own mouth: Pat Buchanan. America First economics may well be the only way to pull out of this spiral of outsourcing that has us circling the Chinese-made bowl.

[babylonsister]

2. I am a bit worried because the US doesn't have the

resources to go it alone and will have to accept that at some point. But I have no answer, nor do I know who will be drawing that line.
It's just ironic that this admin was all for going it alone into war, pretty much, but all of a sudden they acknowledge we can't function that way.
Another good reason to stay out of politics, especially if you're a crook.

[electron_blue]

3. I read this before in your reply to my question, so do you think

it really is all about money and doing things practically in a modern globally connected world?

Then why, for example, doesn't Bush care about being so practical in other respects, such as taking precautions in advance of Katrina's landfall to save money? Wouldn't that be practical?

I'm not trying to be sarcastic,I just want this to make sense. I really feel like I am missing something big here. This is not just about money. Something else is going on.

[TomInTib]

4. self-delete

[spindrifter]

6. The issue that seems to go by the by

is the ultimate one: what are we doing about port security regardless of who is running operations?
Where is the extra money for the Coast Guard, you know, the DHS agency that is supposedly in charge of port security. I was absolutely amazed that someone did not jump on the bandwagon and say look, we have got to fund port security and stop screwing around. We are not trading in a vacuum but we will be cleaned out if the government doesn't sit down and draw up some plans for how we are going to get up to speed. Or are we waiting so we can contract with KBR and a Carlyle company to study, do the P.R. and implement the new Port Security System (PSS).