Feb. 15 (Bloomberg) -- DP World, the world's third-biggest operator of container ports, said it's unable to sell six U.S. terminals to American International Group Inc. because of obstacles by U.S. authorities.

DP World is facing a demand from the Port Authority of New York and New Jersey for ``millions of dollars'' in a transaction fee before the transfer of the leases to AIG will be approved, Chief Executive Officer Mohammed Sharaf, said in a telephone interview today in Dubai, United Arab Emirates.

``We have been asked something that is totally unreasonable -- an unheard-of transaction fee,'' Sharaf said. ``It is not common and it's not in our lease agreement with the port authority.''

DP World bought London-based Peninsular & Oriental Steam Navigation Co. last year for $6.8 billion to become the world's third-biggest container-port operator. It agreed to sell terminals in New York, Newark, Baltimore, Philadelphia, Tampa and New Orleans after the deal caused a political uproar in the U.S.

``We are having productive discussions and hope to reach an agreement soon,'' Steve Coleman, a port authority spokesman, said in a statement today. ``Ultimately, it is the port authority's responsibility to protect the public investments made in the ports and to ensure that terminal operators are partner in the long term growth of our port operations, and those are the goals we are working to accomplish through these negotiations.''

AIG's asset management arm, AIG Global Investment Group, said it agreed to purchase the terminals plus cargo handling operations and a New York passenger terminal on Dec. 11. The New York-based insurer hasn't disclosed the terms. DP World was seeking $700 million, Lloyd's List reported Oct. 3.

`Regulatory Process'

AIG spokesman Chris Winans declined to comment on whether demands from the Port Authority would derail the deal. The snag was reported yesterday by the Associated Press.

``We're excited about acquiring this business, but we're going through a regulatory process and it wouldn't be appropriate to comment on that process until it's completed,'' he said today.

DP World is adamant about not paying a fee to the port authority, Sharaf said.

``We are disappointed by the approach that has been taken,'' said Sharaf. ``We have fulfilled our promise to the American Congress, to the American people completely. We said we are going to divest. We went through the whole process, in fact we were pushed again and again.''

DP World controls 51 port terminals in 30 countries including China, Australia, Germany and Venezuela.

AIG Global Investment Group manages $635 billion in assets, most of which are funds held to pay claims for policyholders of its property and casualty and life insurance businesses. The New York- based unit, which also manages assets for clients, has more than 1,800 employees in 44 offices around the world and invests in stocks, bonds, hedge funds, private equity and real estate.

To contact the reporter on this story: Massoud A. Derhally in Dubai, United Arab Emirates at mderhally@bloomberg.net.

Last Updated: February 15, 2007 11:49 EST