Located 80 kilometers from Lima, the $1.3 billion Chancay port, backed by China’s Cosco Shipping, aims to be a key conduit for South American agricultural exports to Asia.
However, a recent regulatory change has introduced unexpected challenges.
The Peruvian port authority corrected an earlier decision granting Cosco exclusive rights for onsite services, now requiring the port to open these tasks to additional companies.
This shift disrupts the common practice of exclusivity in Peru, which helps operators recoup investments, especially since Chancay is a unique case, being a private initiative from the start.
As Chancay gears up for its debut in November, coinciding with Peru hosting the Asia-Pacific Economic Cooperation conference, the port has found itself at the center of U.S.-China trade discussions.
The U.S. has criticized Peru’s dealings with a Chinese state-owned entity, while Peru emphasizes the need for such foreign investments.
The port promises to shorten South America’s trade routes to Shanghai significantly, but the exclusivity controversy casts uncertainty on this vision.
Peru’s Transport Minister Raúl Pérez Reyes has pledged regulatory adjustments to keep the opening on track despite Cosco’s concerns that exclusivity was crucial to their investment decision.
This dispute highlights potential risks for Peru’s investment climate and underscores the challenges facing Chancay port’s launch.
Beyond its immediate impact, Chancay is eyed by Brazil, Colombia, and Ecuador as a trade nexus, potentially cutting transit times to Asia from 45 to 28 days for Brazilian exports via a strategic road from Brazil’s Amazon.
Other countries like Chile and Colombia also view Chancay as an opportunity to enhance their exports, setting the stage for its pivotal role during the APEC summit discussions led by Peru.