Panama city: Panama has officially announced the termination of its port contract with a Hong Kong-based subsidiary, marking a significant shift in the management of the Ports of Balboa and Crist³bal near the Panama Canal. The decision follows a Supreme Court ruling that invalidates the concessions granted to the subsidiary, facilitating a temporary takeover by a foreign company.
According to Thai News Agency, the Supreme Court ruling, published in the Government Gazette, has annulled the contract held by Panama Ports Company, a subsidiary of CK Hutchinson from Hong Kong, which had been managing the ports for nearly three decades. CK Hutchinson has not yet responded to the court's decision, although it had previously indicated its intention to exercise investment protection rights after Maersk, a Danish shipping giant, expressed interest in taking over the port management.
The Panamanian government has announced that Panama Maritime Transport (AMP) will temporarily manage the ports for a period of up to 18 months, as instructed by the Supreme Court to maintain uninterrupted operations. Specifically, APM Terminals Panama, a subsidiary of Maersk, will oversee the Port of Balboa, while TIL Panama, a subsidiary of MSC, the largest shipping company globally, will manage the Port of Cristobal.
Panama's Supreme Court's decision to invalidate the concession is seen as a triumph for US President Donald Trump, who had urged Panama to reduce Chinese influence over the Panama Canal, a critical global trade route responsible for 5% of the world's trade. Panamanian President Jos© Raºl Mulino clarified in a televised statement that the temporary management by AMP is not an expropriation but a measure to ensure port operations continue while awaiting a proper asset valuation. He further stated that the government aims to establish a framework for future concessions with genuine competition to prevent the recurrence of past mistakes.