Panama took over operations of two container terminals at either end of the Panama Canal on 23 February, ending more than three decades of management by Hong Kong-based CK Hutchison Holdings (CKHH), FreightWaves wrote.
CKHH was reported as saying that it had been informed that Panamanian authorities had entered terminals at Balboa and Cristobal, operated by its subsidiary Panama Ports Company (PPC).
The state had taken over administrative and operational control of PPC’s terminals at the ports, barring representatives of PPC from the property, the 24 February report said.
The takeover followed a ruling on 29 January by Panama’s Supreme Court that PPC’s concession was unconstitutional.
Maersk’s APM Terminals unit had been put in temporary charge of operations at the Pacific terminal of Balboa while the country’s port authority prepared to bid a long-term contract, FreightWaves wrote.
Mediterranean Shipping Co’s terminal unit was also part of new management, operating Cristobal’s Atlantic facility, according to published reports.
The Panama Canal is a critical route for merchant and military vessels moving between the Atlantic and Pacific oceans and has become highly politicised, with US President Donald Trump saying the USA should take back control of the canal, and that China’s presence threatened US security there.
Last year, CKHH announced that a consortium – including US investment firm BlackRock and the Mediterranean Shipping Co – was buying a 90% stake in PPC and an 80% interest in its other subsidiaries and associated companies operating at 43 ports in 23 countries.
The US$22.8bn sale had stalled due to China’s State Administration for Market Regulation (SAMR) conducting a review into the deal “to protect fair market competition and public interest”, a Berliner Tageblatt report quoted a SAMR spokesperson as saying last year.
“The takeover of the two terminals reflects the culmination of a campaign by the Panama State against PPC and the concession contract over the past year,” CKHH said in a press release.
“Government representatives arrived without invitation to the ports and informed representatives of PPC that the concession no longer exists and that PPC must cease operations, and instructed that PPC employees would be transferred out of PPC, must not communicate with PPC, and must comply with government instructions, under threat of criminal prosecution,” CKHH said. “The state now has control of the terminals.”
Although the company said it had ceased all operations at Balboa and Cristobal, it said it considered the entire process unlawful, and that the state’s actions “raise serious risks to the operations, health and safety at the Balboa and Cristobal terminals,” on which PPC had not been consulted.
The company said it was considering its legal options.
