PNO’ers: I’m not a “complete” asshole. I have told you about CK HUTCHISON for YEARS.
- By : James Bryson
- Category : Canal, Economy, Energy/Infrastructure, Financials, International Relations
Hong Kong-based CK Hutchison 0001.HK announced on Thursday that it notified Panama of a dispute under the investment protection treaty after AP Moller–Maersk MAERSKb.CO expressed its willingness to temporarily take over the management of the Balboa and Cristóbal terminals.
The move comes after Panama’s Supreme Court annulled key port contracts in late January for Panama Ports Company SA (PPC), a subsidiary of CK Hutchison, leaving the future ownership of some Panama Canal operations unclear and potentially disrupting CK’s plans to sell some terminals.
APM Terminals Panama, a subsidiary of Maersk, said in late January that it was prepared to temporarily operate the Balboa and Cristóbal terminals to avoid any impact on regional and global trade.
CK Hutchison said that such an acquisition would give rise to legal action against APM Terminals, unless it is carried out in agreement with the company.
CK Hutchison said in its statement that Panama has not provided clear guarantees about the continuity of PPC’s operations in Balboa and Cristóbal, and continues to move towards a forced closure or acquisition, which exacerbates the disruption and harm.
PPC has had contracts since the 1990s to operate container terminals at the Pacific and Atlantic entrances to the canal, independently of the waterway operations.
The canal, one of the world’s busiest waterways, is vital to global trade and U.S. trade, as about two-thirds of the cargo that passes through it is destined for or originates in North America.
The Hong Kong conglomerate added that if the Panamanian Supreme Court ruling, which has not yet taken effect, is published and leads to the termination of PPC’s concession, it would not be able to continue operating its terminals in the two ports.
The situation with port contracts also casts uncertainty over the planned agreement by CK Hutchison, owned by billionaire Li Ka-shing, to sell its global port business, including terminals in Panama, to a consortium led by US asset manager BlackRock BLK.N for $23 billion.
(Reporting by Shivangi Lahiri in Bangalore; Editing by Mrigank Dhaniwala and Ronojoy Mazumdar; Edited in Spanish by Ricardo Figueroa)
(( Shivangi.Lahiri@thomsonreuters.com ; Spanish Editing Desk; santiago.desk@thomsonreuters.com ))
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