Mexico's President Takes Aim at Veracruz Port Concession

On Tuesday, Mexican President Andrés Manuel López Obrador said that his administration would try to revoke a "100-year" lease agreement for operations at the Port of Veracruz. He did not identify the private operator in question, but Reuters indicates that he was referring to a lease held by Hutchison Ports. 

"Obviously, we need to see about getting this concession revoked," said Lopez Obrador.

Hutchison Ports ICAVE, a subsidiary of leading terminal operator CK Hutchison Holdings, acquired a terminal lease at Veracruz in 2001. In April, it fully migrated its container operations to a new terminal in Veracruz's North Bay, which has seven Super-Post-Panamax cranes and two berths. The transition is the culmination of a years-long modernization effort and an investment of more than $450 million. The operator holds a 20-year lease at the site, according to local media. 

The project is part of a massive modernization drive spearheaded by the Integral Port Administration of Veracruz (APIVER) and several terminal operators. The partners describe it as the "most important work of the last 50 years" for Mexico's port system. 

Lopez Obrador (who is better known by his initials, AMLO) has frequently criticized public-private concession agreements signed by his predecessors in government. Petchem company Braskem-Idesa recently attracted Lopez Obrador's scrutiny over a 20-year gas supply contract with Pemex, which the president has described as abnormally favorable for Braskem.