State-owned Dubai Ports (DP) World, which relinquished control over six United States ports in a political firestorm last year, is studying plans to build a container terminal in the Cuban port of Mariel, business sources said.

DP World agreed in early October to do a feasibility study to build a US$250 million container terminal in Mariel that would start operating in 2012, a Havana port source told Reuters.

"A deal is in the works. It is moving forward and they have signed various agreements," another person familiar with the plan told Reuters. In Dubai, DP World spokes-woman Sarah Lockie said on Friday that she could not imme-diately comment.

Forced to sell

DP World became the world's third-largest container port business last year when it bought Britain's Peninsular & Oriental Steam (P&O) Navigation Company. But it was forced to sell P&O's United States (U.S.) assets when the Bush administration came under fire for allowing an Arab-owned company to control American ports. Critics said the deal involving the ports of New York City, Newark, Philadelphia, Baltimore, Miami and New Orleans posed a threat to U.S. national security.

P&O had planned for several years to rebuild Mariel port, 30 miles (50 km) west of Havana on the north coast of the Caribbean island, and turn it into a modern container port.

The port of Mariel was the site of a massive boat lift in 1980, when a flotilla of vessels from Florida picked up 125,000 Cubans wanting to leave the Communist-run island.

Its strategic proximity to the United States makes Mariel an attractive investment looking ahead to a time when Cuba is no longer under a U.S. trade embargo, given limited port capacity in the, one source said.