PPC’s claim against Corozal rejected

Balboa Container Terminal. Source: Panama Ports Company

The Supreme Court of Panama rejected the appeal made by Panama Ports Company (PPC) that the tender for the Port of Corozal infringes constitutional guarantees, writes Port Strategy.

As we wrote earlier, the Panama Canal Authority (PCA) had selected 4 global port operators to compete for the concession to design, construct and operate Corozal Container Terminal of 5.3 mln TEU on the east bank of the Canal’s Pacific entrance.

However, PPC, member of Hutchison Ports Holding and operator of Cristobal and Balboa ports, located at both ends of the Panama Canal, argued that, given the downturn in the global economy, Corozal’s construction is entirely unnecessary. Thus, in 2015 the throughput of Balboa, located next to the future Corozal terminal, dropped by 4.9% year-on-year. Besides, according to sources, PPC had twice applied to PCA to be granted a concession to use the land plot of 120 hectares in Corozal to extend its operations in Balboa.

In June, PPC filed a legal action to declare the project illegal.

Now, the Court’s decision, which was taken by nine judges, gives green light to PCA to continue with its tender. With the new container terminal the Canal Authority intends to diversify its business portfolio and thereby maintain its competitive position, allowing it to generate additional income for the state. Despite the arguments of PPC, the project is widely supported in the country, especially by the Chamber of Commerce, Industry and Agriculture. Thus, Rommel Troetsch, president of Panama’s Maritime Chamber, said that the country should invest in the development of its ports network to increase its share of the regional transhipment market and convert Panama into a regional logistics hub for markets in Asia and Europe.

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