Judge Orders Administration to Address Port Deal Issue

By Melanie Arter | July 7, 2008 | 8:22 PM EDT

(CNSNews.com) - A federal judge Friday ordered the Bush administration to explain why it did not inform New Jersey officials about a deal that would allow an Arab company to take over operations of a container terminal in Newark.

The Port Authority of New York and New Jersey filed a lawsuit opposing the sale of British-owned Peninsular & Oriental Steam Navigation Co., to Dubai Ports World, saying the deal violates a 30-year lease signed with the authority in 2000. The suit claims the deal required the authority's consent.

U.S. District Court Judge Jose Linares called on federal officials to explain why New Jersey officials were not given the same documents and information regarding the deal that Washington used to approve the deal.

Meanwhile, Dubai Ports World agreed late Thursday to delay its takeover of operations at six major U.S. ports to give the administration more time to convince skeptical lawmakers that the deal would not affect national security.

"We believe it would be helpful to have some additional time to brief Congress about the facts and about the safeguards that are in place," White House press secretary Scott McClellan said Friday.

"We believe once Congress has a better understanding of the facts and the safeguards that are in place that they will be more comfortable with the transaction moving forward. So, a slight delay would be helpful in that regard," added McClellan.

No word on how long Dubai Ports World will wait before officially taking over operations of U.S. ports. In the meantime, the company also agreed not to influence management over the ports.

In other legal action, Eller & Company Inc., an American company at the Port of Miami, filed a court petition overseas in England to block the sale on Friday. The company asked the High Court, which has the authority to approve the purchase of the British company to Dubai World Ports, to stop the transaction.

Eller filed a lawsuit last week as well in Florida court seeking more than $10 million in damages and claiming it became an "involuntary partner" with the government of United Arab Emirates as a result of the sale.

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