Panama Auditor Files Suit to Scrap CK Hutchison-Controlled Port Contract
PANAMA CITY July 30: Panama’s comptroller general, Anel Flores, said on Wednesday he had filed suit to the nation’s Supreme Court against a contract to operate ports near the Panama Canal, held by a local firm controlled by Hong Kong-based CK Hutchison. Flores said the two suits were to declare the unconstitutionality and to nullify the contract to operate the Balboa and Cristobal ports. The Supreme Court would still need to accept the request to hear the comptroller’s complaint. The suits stem from a months-long audit spearheaded by Flores, who has publicly complained that the contract did not serve the nation’s interests. Flores has not made the full audit public, but said on Wednesday that it had revealed “many irregularities.”
The complaint could throw a wrench in a planned deal for a consortium involving Italian billionaire Gianluigi Aponte’s family-run shipping company MSC and U.S. investment firm BlackRock to buy out most of CK Hutchison’s global port business, including the two ports. CK Hutchison holds a 90% stake in the local Panama Ports Company, which had a 25-year concession to operate the ports renewed in 2021. The sale has faced pressure from both Washington and Beijing, with Reuters reporting that Chinese state-run shipping giant COSCO could also be brought into the deal. “They are talking about billion-dollar deals here, which do not include Panama, the true owner of the Panamanian ports,” Flores said. “That is why we have taken the actions we are taking, because we are not satisfied.”
CK Hutchison-Operated Panama Ports could be taken over by State Partnerships, Panama President says
PANAMA CITY July 31: Public-private partnerships could take over two key ports near the Panama Canal if courts invalidate a contract with Hong Kong-based CK Hutchison’s to operate them, Panama’s President Jose Raul Mulino said on Thursday. CK Hutchison holds a 90% stake in the local Panama Ports Company, which had a 25-year concession to operate the Balboa and Cristobal ports, located at both ends of the canal, renewed in 2021. The contract has been at the center of a dispute since U.S. President Donald Trump this year threatened to take over the waterway due to China’s influence over Panama’s maritime industry. CK Hutchison is trying to sell its stake in the Panamanian company as part of a massive global deal. Two suits were filed with the Supreme Court this week by Panama’s Comptroller General’s office, aiming to declare the agreement unconstitutional and to nullify the contract on the basis the renewal did not follow required legal steps, including the Comptroller’s green light. “I do not at the moment see the continuation of the Panama Ports contract, amended or not,” Mulino told a press conference. “We will wait for the verdict,” Mulino added, referring to the lawsuits. “The idea is still a draft, covering the ports and the mine through partnerships with the state,” Mulino said.
The comptroller has openly criticized the contract over alleged irregularities by the previous government and insufficient revenue to Panama from the deal, but the full results of a recent audit by his office have not been revealed. The legal challenges the contract is facing in Panama are adding troubles to a diplomatically sensitive plan from a consortium led by U.S. asset manager BlackRock to buy a large portion of CK Hutchison’s global ports business, a possible deal that has been celebrated by Washington but criticized in China. The deal has become increasingly politicized amid a U.S.-China trade war. Beijing argues it has significant national interests in the transaction and the proposed deal would be a betrayal of the country. Panama’s government is also seeing partnerships with the state as a solution for the operation of a key copper mine previously operated by Canada’s First Quantum Minerals, whose contract was declared unconstitutional by the Supreme Court in 2023.
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