Key Points
- Panama’s Supreme Court ruled the Balboa and Cristóbal port concession unconstitutional, ending its legal basis.
- A comptroller audit attacked the 2021 extension without bidding and alleged about $1.3 billion in lost public revenue.
- The move hits amid U.S.-China rivalry and a proposed $23 billion sale of 40-plus ports tied to BlackRock talks.
Panama’s Supreme Court has declared unconstitutional the contract that let Panama Ports Company, controlled by Hong Kong’s CK Hutchison, operate Balboa and Cristóbal, the terminals at each end of the Panama Canal.
The concession began in 1997 and was extended in 2021 for another 25 years without a tender. The ruling cannot be appealed.
CK Hutchison can request clarifications that could delay implementation, and PPC says it may pursue domestic and international legal avenues.
The decision followed two lawsuits filed by Panama’s comptroller after a government audit alleged irregularities. The audit argued the state forfeited about $1.3 billion in public income and cited alleged investment shortfalls and other economic harms.
PPC rejects that reading and says it invested about $1.8 billion in infrastructure and technology. Beijing said it will take “all necessary measures” to protect legitimate corporate interests.
Panama Canal Ports Face Geopolitical Pressure
Hong Kong’s government warned against coercive tactics in trade and urged local firms to reassess investments in Panama.
Around 3% to 6% of global trade moves through the canal each year, and the United States is its biggest user.
Donald Trump has used the ports issue to argue that China holds undue influence and has vowed to “recover” control, while President José Raúl Mulino insists the canal “is and will remain Panamanian.”
Complicating matters, CK Hutchison has been negotiating a ports divestment of more than 40 assets for about $23 billion with a consortium involving BlackRock and Mediterranean Shipping Company.
Trump celebrated the talks as proof of U.S. leverage. Chinese officials pushed back, signaling that state shipper Cosco should hold a larger stake, prompting reports of buyer rethinking.
Panama now must keep cargo moving while rewriting the legal template for port concessions. Mulino has floated public-private partnerships as a bridge, before any re-bid for assets that sit at the canal’s gates.
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