DP World’s controversial story of P&O ownership | P&O Ferries

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When Dubai Ports Ltd first bought P&O ports and ships 16 years ago, the issue preoccupying a country reeling from the 2005 Islamist terror attacks was Britain’s physical security.

Now the questions focus on the economic security of the UK workforce.

From DP World’s perspective in the Gulf, crewing loss-making P&O ferries may never have been a pressing concern. The heart of DP World’s global operation is the enormous port of Jebel Ali, at the commercial crossroads of continents, boasting the largest man-made harbor in the world, incorporating ever-larger container ships.

It is also one of the largest free zones in the world. These zones are a place where businesses can fit in with the lightest tax and regulatory framework.

DP World is ultimately owned by the ruling royal family in Dubai. The group’s chairman and chief executive is Sultan Ahmed bin Sulayem, who has long been at the heart of government; he chairs a government department that includes Dubai’s customs workforce and heads the Jebel Ali Free Zone Authority.

Bin Sulayem and DP World originally bought P&O – then a London-listed company – in 2006 for £3.3bn. He paid a huge premium, around 70% above market value, for a band that Margaret Thatcher once described as “the fabric of the British empire”.

However, the ports have always been his main target: Bin Sulayem then admitted that he had limited knowledge of the ferry business that docked him, but denied that he intended to sell them. They were, however, sold to a separate public entity, Dubai World, at the time of the financial crisis, before DP World bought them for $322m (£244m) in 2019.

Of its 70 ports around the world, the closest to home for most laid-off P&O workers are the major container operations at London Gateway and Southampton. Both are now central hubs for the first free ports, Thames and Solent, placing DP World firmly in the wake of post-Brexit government economic policy.

Chancellor Rishi Sunak has championed the controversial freeports as a key part of upgrading – allegedly providing more jobs for disadvantaged port regions. Critics have already questioned the Freeport model as potential ‘mini-tax havens’ that could fuel a regulatory race to the bottom and see more profits sent abroad rather than reinvested in the UK. United.

DP World has been a key supporter, however: it says it has already “replicated in key international locations” the Jebel Ali model. “Expanding on this successful model, we now own, develop and operate industrial parks, inland cargo depots, special economic zones and specialized facilities around the world that help foster trade.”

More and more politicians may be questioning an economic model developed in Dubai. Even outside Jebel Ali in Dubai, as in all the Gulf States, labor law is hardly adapted to the worker: largely carried out by migrants operating under the kafala system, in which employers have the right to decide whether they can ever change jobs or leave the country.

Those reporting from Britain have also apparently felt the pressure: P&O Ferries has had three chief executives in just over a year, after Janette Bell in August 2020 and then David Stretch in November 2021 gave notice in Dubai . The latest, Peter Hebblethwaite, handed the shooting team work over video to the head of human resources, Stephen Nee. DP World said the two “left the company for reasons completely unrelated” to the massive layoffs this week.

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DP World and P&O Ferries have also been embroiled in controversy over a £146million shortfall in industry-wide seafarers’ pension fund, the Merchant Navy Ratings Pension Fund, of which P&O is the largest employer. Parts of Royal Navy pensions are implicated, and the taxpayer could be left behind if P&O fails to pay the money it owes.

As this row rumbles, DP World signed on last November to sponsor the European Golf Tour for an even bigger sum – taking the lion’s share of the $200 million prize.

Meanwhile, the global operation continues: it has paid a dividend of $332 million in 2020, and saw its revenue jump 27% to a record $10.8 billion in 2021, in results reported by Bin Sulayem earlier this month. On Wednesday, as DP World assembled security teams at UK ports to escort ship crews, he tweeted of a seminar in the United Arab Emirates, aimed at young Emiratis: “I strongly believe in investing in the next generation. »

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