DP World waits in wings after Chavez orders ports seizure

The terminal operator is waiting to hear the fate of its Venezuelan operations at Puerto Cabello.

DP World is waiting to hear the fate of its Venezuelan terminal operations at Puerto Cabello after Hugo Chavez, the president, on Sunday ordered the military to take over the country's ports and airports. Mr Chavez sought to gain control of installations run by the opposition-ruled state governments. The move follows legislation, passed by Congress, allowing the central government to take over transport infrastructure from regional governments if they have not been maintained properly.

Analysts said the Dubai terminal operator was unlikely to be seriously affected by the development. "We're waiting to see the results of a meeting between the government and the port authority," said Ethan Chorin, a senior manager of corporate communications at DP World. Mr Chorin said the port's activities had been unaffected to date. "The situation is quiet and calm," he said. "Apparently all operations are being handled as normal, and no employees are in any danger."

DP World is reportedly one of the largest investors in Puerto Cabello, and in January signed a 20-year lease to operate the port, which lies 75km west of Caracas, the capital. It is believed DP World owns the container-handling equipment at the port but not any adjoining land, according to Neil Davidson, the director of ports at Drewry Shipping Consultants. "I think this is more of a political power struggle," Mr Davidson said. "For DP World, this is likely a case of having a slightly different landlord now. The sensible thing for Mr Chavez to do is honour the existing agreements with terminal operators to make sure inward investment continues to flow in the long run."

Mr Chavez said during his weekly Sunday broadcast: "We are going to take over ports and airports throughout the republic, whoever wants can oppose it, but it is the law of the republic." He already faces opposition to the move. Political opponents have said Mr Chavez is concentrating power by using state resources to promote his own political party and limiting the ability of opposition governors and mayors to carry out basic tasks.

* with Reuters [e-mail]