Plan for Gulftainer to take over Port of Wilmington passes CFIUS review.
The plan for United Arab Emirates-based Gulftainer to take over the Port of Wilmington, Del., is moving forward, with the Committee on Foreign Investment in the United States (CFIUS) finding no reason to object to the deal.
In a statement, Delaware Gov. John Carney and Secretary of State Jeffrey Bullock said CFIUS found the state’s agreement to have Gulftainer operate and refurbish the existing port for a term of 50 years and build and operate a new port facility on the Delaware River is “not a covered transaction.”
Carney and Bullock said that decision reflects “the consensus of front-line agencies charged with ensuring the protection and security of the United States. No further review is required.”
“This is a significant step forward in finalizing our agreement with Gulftainer, which will protect and create good-paying, blue collar jobs at one of Delaware’s most important employment centers,” said Carney. “This expansion will result in significant new investment at the Port of Wilmington and help stabilize families and communities that rely on those jobs.”
Bullock added, “The more than a dozen federal agencies that make up CFIUS have completed their review of our plans to grant Gulftainer a concession to operate the Port of Wilmington and greatly expand its capacity and capabilities over the coming years. This is the best response we could have received and clears the way for us to finalize our contract with Gulftainer over the summer.”
The deal allowing Gulftainer to lease the Port of Wilmington from the state was announced in March and approved by the Delaware Legislature.
Under terms of the agreement, Gulftainer’s subsidiary GT USA will make annual royalty payments to the State of Delaware reaching an estimated $13 million over the next decade. The company also has agreed to invest more than $580 million in the port over the next nine years, including approximately $410 million for a new container facility at DuPont’s former Edgemoor site, which was acquired by the port in 2016. Final terms of the agreement are currently under review by the port’s board of directors.
In contrast to the controversy that arose in 2006 when DP World, another UAE-based company, attempted to acquire port contracts in the United States from P&O Ports, few voices were raised in opposition to the Gulftainer deal in Delaware.
Gulftainer has been operating the container terminal at Port Canaveral, Fla., since 2015.
One of the most vocal critics of the deal was Frank Gaffney, the founder and president of the Center for Security Policy, who alleged, “Gulftainer is co-owned by the emir of Sharjah, UAE and Hamid Jafar, Dr. Jafar’s brother and business partner. The Iraqi Jafar brothers share a history of participation in Saddam’s weapons of mass destruction (WMD) programs.”
Rep. Duncan Hunter (R-Calif.) had written to President Trump asking for a hold on the deal until the CFIUS review was completed.
But Peter Richards, chief executive officer of Gulftainer, said his company “never has, never will have anything to do with terrorism, with dirty money” and had welcomed the review by federal authorities.
Gulftainer is interested in expanding elsewhere in North America, he said during an April 3 interview on the UAE radio station Dubai Eye 103.8. Gultainer was “looking at ports on the West Coast and also in the Gulf of Mexico as well at this time. We’re even looking towards Nova Scotia.” The company is looking at opportunities on the West and East Coast of Africa and in Asia, but he said “I would think probably a year before you see the next announcement
In Wilmington, he said Gulftainer would initially use the existing footprint of the Port of Wilmington, adding it operates “at the moment in a way that we do not believe utilizes the land efficiently. So we’ll be going in there and changing the processes and procedures and allowing that footprint to handle a greater capacity. But then we realized that the interest that’s been shown in us entering the Port of Wilmington is going to generate sufficient volumes that even using a better model on that footprint we’ll still need to expand into a new terminal, and that’s what Edgemore is. It’s going to be a new state of the art terminal built adjacent to the existing port.”
Richards added during the radio interview that Wilmington does not seem as vulnerable as other ports to rising tariffs: “When politics comes into business there is always a concern, but we’re lucky in a way that the port of Wilmington is the biggest importer and exporter of foodstuffs. Those foodstuffs traditionally are coming from South America and South Africa, and as of yet the trade war doesn’t seem to have expanded to those areas.”
Gulftainer-Delaware deal gets OK
