After the Panama Supreme Court ruled last month that the contract allowing a subsidiary of Hong Kong’s CK Hutchison Holdings to operate ports on the Panama Canal violates the constitution, the Panama Maritime Authority officially took over CK Hutchison’s two Panama Canal ports on the 23rd.
According to Bloomberg and AFP, Panamanian President Mulino on Monday ordered the temporary takeover of two ports operated by a subsidiary of CK Hutchison Holdings Limited, after Panama’s constitutional court ruled the company’s concession invalid.
In his Monday speech, Mulino said management and operation of these two ports, located at the strategic Panama Canal, would be handed over to the Panama Maritime Authority to "ensure the continuous, safe, and efficient operation of the ports."
Mulino stated that the takeover applies to movable equipment inside the ports and “does not mean the final loss of ownership.” He said Panama would return assets, including cranes, to the owners and pay corresponding compensation when the reason for the takeover is removed, unless the related equipment is sold to a new party.
The Supreme Court ruling took effect on Monday upon publication in the official gazette. The head of the Panama Maritime Authority, Flores, told reporters that the authority would take over the ports to ensure continued operation. An 18-month transition period has begun, during which the two ports will be operated by two different companies until new contracts are awarded in an international tender.
Panama’s Labor Minister Munoz assured that there would be no layoffs at the Balboa and Cristobal ports previously operated by Panama Ports Company due to the change in operational management. Currently, the two ports employ about 1,200 people.
According to Panama’s La Prensa, Denmark’s APM Terminals, part of Maersk, will operate one of the ports during the transition period, while a local subsidiary of Switzerland-based Mediterranean Shipping Company (MSC) will manage the other port until a new contract is signed through the tender process.
Last month, Panama’s Supreme Court ruled that CK Hutchison’s Panama Ports Company (PPC) contracts to operate local ports were unconstitutional. CK Hutchison announced that PPC had officially initiated international arbitration proceedings with the Panamanian government.