VZCZCXRO5425
RR RUEHDIR
DE RUEHDE #6929 3481601
ZNY CCCCC ZZH
R 141601Z DEC 06
FM AMCONSUL DUBAI
TO RUEHC/SECSTATE WASHDC 4960
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEFHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHDE/AMCONSUL DUBAI 7996

C O N F I D E N T I A L DUBAI 006929 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL:  12/14/2016 
TAGS: PGOV PREL ECIN EINV ETRD PINS TRSY EWWT AE
SUBJECT: DP WORLD SELLS U.S. PORT OPERATIONS 
 
REF: A. DUBAI 001846, B. DUBAI 006394 
 
CLASSIFIED BY: Paul R Sutphin, Consul General, Dubai, UAE. 
REASON: 1.4 (b), (d) 
 
 
 
1.(U) The chairman of Dubai World, the Dubai government holding 
company that includes the port and freezone operators DP World 
group, Sultan bin Sulayem announced on December 11 that DP World 
had sold its operations at six U.S. ports to AIG Global 
Investment Group.  Although he did not reveal the price AIG 
Global Investment Group paid to DP World, he said that the price 
was "fair."  According to press reports, DP World was seeking 
USD 700 million for the U.S. operations. 
 
2.(C)  When DP World purchased Peninsular and Oriental Steam 
Navigation in February 2006 it acquired operations in the ports 
of New York, Newark, Baltimore, Philadelphia, Miami, and New 
Orleans.  After encountering Congressional opposition to the 
sale, DP World agreed to sell off the U.S. operations in March 
2006 (ref A). In October bin Sulayem told Consul General DP 
World stated that they expected the sale to be completed in 
November (ref B). Following the AIG announcement, Bin Sulayem 
was quoted in the press as saying "we are disappointed to be 
exiting the U.S. market".  Comment: Dubai World may be exiting 
the US port operations market, but bin Sulayem had earlier made 
clear that Dubai World - under the direct mandate of Dubai ruler 
Mohammed bin Rashid al Maktoum - would not retreat from other 
business engagement in the US.  In fact, another arm of Dubai 
World, Istithmar, has stepped up its purchases of US hotels and 
other investment properties in the wake of the ports 
controversy.  End comment. 
 
3.(U) An editorial in the English-language daily Gulf News dated 
December 13, 2006 summed up a variety of local views, praising 
the "diplomacy and grace" DP World showed throughout the 
episode, and contrasting it with U.S. government "heavy handed 
opposition" and accusing the USG of "pandering to ignorant 
Americans who couldn't find Dubai on a map." 
 
4.(C) Comment: We believe this is an accurate summation of 
popular Emirati sentiment regarding the issue -- as distinct 
from the typical UAEG official posture that the bilateral 
relationship remains unaffected.  Among senior Dubai officials, 
the issue still rankles -- every senior official the Consul 
General has met since his arrival in August has raised it, 
although usually more along the lines of the hurt feelings of "a 
close ally badly treated."  Many of these officials, including 
bin Sulayem and Federal Minister for Cabinet Affairs (and MbR 
confidante) Mohammed Gergawi also have been clear that lessons 
have been learned about the need to lobby in Washington and in 
the US to market Dubai, Inc as a dependable brand.  We believe 
Dubai is prepared to spend considerable sums to do so as it 
looks to continue investment in the US; for example, Dubai is 
preparing a paid insert to the New York Post to sell itself as a 
business and tourism destination -- and a place that wants 
closer economic linkages with the U.S.  End Comment. 
 
SUTPHIN