That China has no intention of leaving the lucrative package of 43 container terminals—spread across ports around the world, including two in Panama—in American hands became evident just days after CK Hutchison Group announced a preliminary agreement to sell control of Hutchison Ports to a consortium formed by BlackRock, Global Infrastructure Partners and MSC’s Terminal Investment Limited. Initially, sharply critical editorials from newspapers seen as aligned with the Chinese government emerged, followed by more direct interventions from Beijing’s institutional representatives, leading to an indefinite delay in signing the final deal.
The story remained under the radar until 13 June, when Bloomberg revealed that state-controlled Cosco Group was in talks with the Swiss-American consortium to join through its subsidiary China Cosco Shipping. This move could unlock the stalemate and, according to Bloomberg, has surfaced as a possible diplomatic solution following high-level meetings held in Switzerland between Chinese and US officials. Interestingly, the report—though unofficial and citing sources close to the matter—was released at the same time as President Trump’s announcement of a trade agreement with Beijing regarding tariffs.
No further details have been disclosed at this stage, as negotiations are reportedly still ongoing. The exclusivity period between CK Hutchison and the consortium is set to expire at the end of July, after a first deadline in April passed without a deal being finalised for the Panamanian segment. Adding to the uncertainty is the intervention of the Panamanian government, which is reportedly considering revoking the concession granted to the Hong Kong-based company.
The Panama Canal Authority has weighed in on the issue, since two of the terminals involved in the transaction—located in the ports of Balboa and Cristobal—sit at opposite ends of the canal. On 10 June, the Authority’s administrator, Ricaurte Vásquez, told the Financial Times of his concerns about a “potential concentration of capacity that could compromise the neutrality of the canal” in the hands of MSC, which operates the world’s largest container fleet. Vásquez also revived an old plan for a container terminal at Corozal port, on the Pacific end of the canal, which would be managed by the Authority itself.
One unresolved matter is the investigation launched by Panama’s Court of Auditors into the concession of the Balboa and Cristobal terminals to Hutchison Ports via its subsidiary Panama Ports Company. According to prosecutor Anel Flores, CK Hutchison extended its contract in 2021 without the mandatory approval of the Court of Auditors. Initial findings from the audit reportedly reveal significant irregularities: of an estimated $1.3 billion owed over the first 25 years of the contract, the company is said to have paid only a fraction, improperly saving around $850 million. In addition, Panama Ports Company is reportedly still in debt for another $300 million and has failed to meet its obligation to transfer 10% of net profits to the government. Flores has announced plans to file a criminal complaint with the Attorney General’s Office against the officials who authorised the contract extension, as well as against the top executives of Panama Ports. The Canal Authority must now decide whether to revoke the two concessions.
