WASHINGTON: The Panamanian government is considering rescinding the concession granted to Panama Ports Co., a subsidiary of Hong Kong’s Hutchison Port Holdings (HPH) for breach of the commitments agreed in the contract under law No. 5 of 16 January 1997. This is stated on the web site laverdaddepanamaports.com. The website, created to denounce alleged breaches of the powerful port operator, said that the government’s decision is based on Article 2.14.3, Termination of Contract by the State.
The clause stipulates that “The State may terminate this contract if the company fails to meet the substantial obligations which are contained in this contract.” In this case, says the clause, the State would take over control, operation and management of the ports of Balboa and Cristobal, subject to certain conditions.
When consulted, a senior official said, “the fact is that the government is very dissatisfied with the conduct of this company, which not only has managed to renege on commitments agreed in the original contract, but has become an obstacle for the government to take actions and run projects that are of interest to maritime and logistics development.”
These projects include the port of Corozal, whose execution is called for by the local and international maritime industry. However, PPC hopes that it will get the land in that area for expansion of the Port of Balboa, PPC filed an appeal with the Third Chamber of the Supreme Court in June, 2016, to declare null and void the decision of October 30, 2014, by the Board of Directors of the Panama Canal Authority (ACP) that authorized the administrator of the agency to tender the concession for the development and operation of the port of Corozal West.
The authorization was preceded by studies that justified the technical and economic viability of the terminal. Four major global port operators – PSA International Pte, Ltd, of Singapore.; Terminal Link, of France; APM Terminals, of the Netherlands and Terminal Investment Limited (TIL), of Switzerland – qualified to make proposals.
