An entrance to the Balboa terminal, managed by CK Hutchison’s Panama Ports Company, was closed on Monday following a decree from the Panamanian government. This action came after the Supreme Court ruled that the concession held by CK Hutchison was unconstitutional. The decree allows the Panama Maritime Authority to take control of the two critical ports at the Panama Canal, citing “urgent social interest.”
This occupation includes a comprehensive sweep of all movable assets at the Balboa and Cristóbal terminals, affecting cranes, vehicles, computer systems, and software vital for port operations. The government’s decision is part of a larger geopolitical context, as Panama finds itself at the center of a rivalry between the United States and China. Tensions rose last year when former President Trump accused China of exerting undue influence over the Panama Canal.
Previously, CK Hutchison was in discussions to sell the two ports to a consortium that included U.S. investment giant BlackRock. However, this deal faced immediate pushback from the Chinese government, which intervened to block the transaction. The backdrop for these events includes a Supreme Court ruling from January, which nullified the law that authorized the concession contract for Panama Ports Company, established back in 1997. This ruling invalidated a contract extension granted in 2021 and left the company’s operations without legal support.
In a recent statement, the Panamanian government assured that port operations and job stability would be maintained. Danish group A.P. Moller-Maersk’s subsidiary, APM Terminals, is set to temporarily manage the terminals until a new contract is finalized. CK Hutchison has begun arbitration proceedings against Panama through the International Chamber of Commerce, though the timeline and consequences of these actions remain uncertain. The company has also threatened legal action against APM Terminals if they proceed with operation, while APM Terminals has noted that it is not involved in the ongoing legal disputes.
Despite these challenges, a spokesperson for CK Hutchison indicated the company is actively seeking a resolution with the Panamanian government to continue its operations. This situation underscores the dynamic intersection of local governance and international business interests in one of the world’s most crucial maritime passages.