Panama Ports Deal Still Underway

12 Sep Panama Ports Deal Still Underway

The future of two of Panama’s most strategic ports is still uncertain as it’s been announced that public-private partnerships could assume control of the Balboa and Cristobal terminals if the courts strike down the operating contract of Hong Kong-based CK Hutchison Holdings.

The announcement follows legal challenges that seek to invalidate Panama Ports Company’s (PPC) concession on the basis that the contract was “unfair” and did not deliver adequate returns to Panama. PPC, 90% owned by CK Hutchison, has operated the Balboa and Cristobal ports since 1997 under a 25-year concession renewed in 2021. The timing of this challenge appears to be favourable for the US-backed consortium – BlackRock and Mediterranean Shipping Company (MSC) – who launched a joint bid to acquire Panama Ports Company as part of a broader deal involving 42 CK Hutchison terminals worldwide.

However, this transaction quickly met resistance. China’s antitrust regulator said it would review the sale, while Beijing reportedly pressured for state-owned COSCO to be included in the takeover consortium with veto rights.

If the courts rule in favour of the plaintiff, Panama would have to re-tender the contracts. However, legal experts warn the move could expose Panama to costly litigation from CK Hutchison, which could claim the move constitutes politically motivated expropriation.

FOLLOW US FOR THE LATEST NEWS!

Simply click here to follow our LinkedIn Company Page to stay up-to-date with the latest industry news that may impact your business.