The History of Dubai Ports World

A discussion on Dubai Ports World will be very interesting for those who are interested in doing business in Dubai. This discussion will also be important to understand the US relationship with United Arab Emirates.

The Dubai Ports World is a subsidiary of Dubai World. Dubai Ports World is the holding company which is owned by the Dubai government.

Dubai World purchased the British company Peninsular and Oriental Steam Navigation Company (P&O) in the early 2006 at the cost of 7 billion dollars.  It was March 2, 2006 when Dubai Port World received the final approval from the British High Court to acquire the P&O Company.

The company provides terminal operations and other services to the 21 ports along the US Atlantic and Gulf Coasts. Before the approval of the British High Court the acquisition was also approved by the US government’s Committee on Foreign Investment in the United States on January 17, 2006.

But the attention on the deal was not paid till Singapore based another terminal operator dropped its bid for the competition with the company on February 10, 2006 leaving the decks clear for the DP World to acquire the P&O. Since then political storm developed in US over this deal.

At that time it was the fourth largest port operating company which later became the largest in the world.

It will be interesting to know about the background of Dubai Ports World. Dubai Ports World is an established global developer of container ports and provider of stevedore and terminal services.

Previously Dubai Ports was owned by the government company The Corporate Office (TCO). This is the same company which owns real estate company Nakheel and the investment bank Istothmar.

In 2005, the Dubai Port Authority and Dubai Ports International were merged into DP World. Dubai Ports World was further strengthened after its merger with the Ports, Customs and Free Zone Corporation (PCFC).  Both TCO and PCFC are on the model of Singapore’s government owned companies and managed by the Emir of Dubai.

So Dubai Ports World grew out of the Dubai Ports authority that was established to manage the home ports of Rashi and Jebel Ali. In 1999 Dubai Ports International (DPI) was formed to expand these skills throughout the world. After this the company expanded at a very pace and bought terminals in Saudi Arabia, Djibouti, India and Romania.

By 2005 the company made strong presence in Asia. In 2005 DPI was renamed as DP World and it currently operates terminals in many countries including Dominican Republic, Venezuela, Germany, Romania, India, China, South Korea and Australia. It is at present the largest port operator after Hutchison, Whampoa and PSA.

P&O which the Dubai Ports World acquired in 2006 operated ports in US in New York, New Jersey, Baltimore, Miami and many other cities. After the acquisition DP World started its operations in these American cities.  Many American lawmakers felt this was going to breach the US port security.

This mindset was influenced by the 9/11 attacks in the US in which two UAE nationals were involved. After the generation of much heat on the subject in US, the Dubai Ports World said that it would voluntarily sell its US ports operations to a US company. DP World sold its American operations to a US company American International Group. 

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