If Dubai Ports World can survive the political firestorm sparked by its bid to enter the lucrative U.S. market, it will cap a remarkable 7-year run from nobody to global power.
The United Arab Emirates company, which manages cargo and container operations at ports around the world, is set to buy London's Peninsular & Oriental Steam Navigation Co. for $6.8-billion. The acquisition would place it among the three largest businesses of its kind.
But a small number of Peninsular's management contracts - six, including Miami - are with U.S. ports. The board of the Port of Tampa elected this week to hire Peninsular. Some top U.S. legislators are worried about the potential security risk and are asking the Bush administration to reconsider its approval of the Peninsular acquisition.
It's a long way from 1999, when DP World began exporting its cargo-management skills. Until then, the primary terminal it had managed was in Dubai's port, Jebel Ali. But before long, DP World had landed work in Saudi Arabia, Djibouti, India and Romania. Its portfolio grew in early 2005 when it acquired the international terminal arm of Jacksonville's CSX Corp. for $1.1-billion.
Not bad for a company from a city-state about the size and population of Hillsborough County. But DP World's growth is part of a larger plan to put the Persian Gulf emirate on the map - and to assure its economy will survive after the world's petroleum reserves run dry.
The driving force behind the plan is Sheikh Mohammed bin Rashid Al Maktoum: a billionaire poet, falconer and horseman born in 1949 who rules Dubai and the enterprises that define it.
Some of Dubai's riches - synonymous with those of the Maktoum family, which has ruled it since 1833 - are being plowed into tourism. Current and future attractions include world-class athletic facilities, the world's tallest skyscraper (under construction), a series of man-made islands, the Middle East's largest airline and what has been billed as the world's only 7-star hotel.
Sports are used as a marketing tool.
And horse-racing is a particular passion of Sheikh Mohammed, a competitive "endurance" rider who has spent many millions of dollars breeding and running thoroughbreds. He helped establish the Dubai World Cup as the world's richest race in 1996, once owned the father of Triple Crown contender Smarty Jones - Tampa's John Sykes, founder of call-center company Sykes Enterprises, sold the pregnant mother for $5-million in 2004 - and inspired a book about his quixotic battle to win the Kentucky Derby.
"They realize that if they win the Kentucky Derby, everybody would know Dubai," said Jason Levin, who pursued Sheikh Mohammed for his book but was granted only two interviews of 20 minutes each. "It's all to position themselves for when the oil runs out."
Sports and tourism are just the beginning for Dubai and the Maktoums, who are seeking broader investments.
Last year, Dubai-owned companies bought a stake in automaker DaimlerChrysler, bought London's famous Madame Tussaud's wax-museum chain, picked up New York's Essex House and 230 Park Place for more than $1-billion total and teamed up with an American billionaire to try to buy the futures arm of financial services company Refco, which is in bankruptcy. Forbes magazine reported that Sheikh Mohammed's inheritance from his late father generates an estimated $2-billion a year.
At times, Dubai's growing stature and power has placed it uncomfortably close to the Bush administration.
Its $100-million investment with the Carlyle Group, a private equity firm with past ties to President Bush's father, raised eyebrows. So did Bush's nomination last month of David C. Sanborn, DP World's director of Latin American and European operations, to head the Department of Transportation's Maritime Administration. Some cynics wondered whether Treasury Secretary John Snow, a former CSX chairman, eased federal approval of DP World's deal with CSX.
In her Bush biography The Family, Kitty Kelley wrote that President Bush's brother Neil visited Sheikh Mohammed during a fundraising trip for his Ignite software company in 2001 and returned with "lucrative commitments" from the United Arab Emirates and other Persian Gulf countries.
What role Sheikh Mohammed and his family are playing in the expansion of DP World is unclear. Edward Bilkey, the company's chief operating officer, told CNN on Thursday that the Dubai government is "not involved in our daily operations. When we want to make investments, when we want to have a new project, we decide it on commercial terms." A call to the company's U.S. publicist was not returned Friday.
But Sheikh Mohammed's late father, Sheikh Rashid, is credited with putting the port business into motion in 1976. According to the Financial Times of London, he marked a spot in the sand of Jebel Ali and pledged to build a port there.
Levin, the author, said there's no question who really owns DP World, which the American media euphemistically refers to as "state-owned."
"Yeah, it's theirs," he said of the Maktoum family. "They own the state."
Times staff researcher Caryn Baird contributed to this report, which has information from Times wires.