Hutchison Makes Overtures to Panama for Negotiations Over Terminal Ops
Hong Kong-based CH Hutchison is reported to have made a formal request to the government of Panama for negotiations over the operations of the terminals at each end of the Panama Canal. In statements made by the company on Panamanian radio, the company indicated it was fully prepared to “renegotiate absolutely everything” related to its concession to operate the terminals in Balboa and Cristobal.
Since it was announced last month that Panama’s Supreme Court had ruled the law that established the concession was unconstitutional, Hutchison has alternated between statements defending its operations and threatening various legal actions. The governments of Hong Kong and China have also strongly condemned Panama’s actions while saying they were politically motivated.
“We request that there be a dialogue between CK Hutchison and the representatives of the Executive Branch to seek a reasonable solution to this decision by the Court,” said Alejandro Kouruklis, spokesperson for PPC, in an interview on Thursday on Panama’s Radio Red, reports the Panama news service. “We need specific steps to be able to continue operating, because otherwise, chaos will erupt overnight.”
The company has previously said its overtures to Panama have not received a response. It has called for a dialogue regarding the concession that was first awarded in 1997. It was renewed for 25 years in 2021 in a no-bid process. CK Hutchison asserts the Panama Ports Company, of which it owns 90 percent and the government 10 percent, has invested millions in the port operations.
Hutchison has previously said it was considering all legal remedies while also announcing it would seek an international arbitration. The company later issued a stern warning to APM Terminals or any other company that might take steps against its operations. Panama has previously said that Maersk’s terminal company would operate the two locations on an interim basis until a new tender could be conducted. CK Hutchison threatened legal action against APM Terminals. It has also asserted that Panama was taking steps to force it out and take over the operations.
According to the reports, while sounding a conciliatory tone, Kouruklis also stressed that if the ruling is ultimately carried out, the “inevitable consequences would be a shutdown of the ports.”
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The terminals at each end of the canal are reported to handle more than a third of the containers (38 percent) of the nearly 10 million in Panama in 2025. There has also been a strong increase in transshipment of containers across the Panama isthmus, especially in the past few years when the canal was struggling to manage a water shortage.
The government of Panama assured the industry that the terminals would continue to operate normally during the transition. It also said its goal was to run a new tender, but that it would add a provision requiring separate management for the two terminals. It has also announced plans for a tender to establish competing terminals at each port and invited the leading companies in terminals and container operations to participate.