Panama’s comptroller general has asked the country’s supreme court to review CK Hutchison’s contract to operate the ports of Balboa and Cristobal.
Hutchison of Hong Kong (0001.HK) operates the maritime centers through its Panama Ports subsidiary as part of an agreement signed in 1997, and extended in 2023 for another 25 years.
The move comes after Beijing said it could block the $23 billion sale of Hutchison’s 43 marine terminals to U.S.-based investor BlackRock (NYSE: BLK) and Mediterranean Shipping Co. of Switzerland, on anti-trust grounds unless a Chinese business, thought to be state-run shipping giant Cosco, was cut in on the deal.
Panama in the two cases filed July 30 wants the high court to cancel the contract as unconstitutional.
If the agreement is nullified and a new operator solicited, BlackRock, the world’s largest infrastructure fund, could be in line to make a bid to run the ports.
The pact was “unfair” and “abusive,” Comptroller General Anel Flores was quoted as saying. He alleged that Panama Ports Company failed to pay sufficient royalties, and that the extension came without the required authorizations.
“It doesn’t seem correct that in other [parts of the world] there are people negotiating the future of assets that belong to us, the Panamanians,” Flores said, referring to Cosco’s potential involvement.
Flores kicked off Panama’s port fight after President Donald Trump in his January inauguration speech promised to take back control from what he said was China’s influence over the Panama Canal. The same day Flores said he would open an audit of Panama Ports Company.
The sale of CK Hutchinson’s ports unit, Hutchison Port Holdings, has been on hold since July 27, when an exclusive negotiating period with BlackRock ended. Two days later, French shipping conglomerate CMA CGM of France, which operates global container terminals including in the U.S., expressed interest in the business.
