Panamanian President Jose Raul Mulino announced his government will seek independent concessionaires for the ports of Balboa and Cristobal. The decision follows a Supreme Court ruling that invalidated the existing contract held by Panama Ports Company (PPC). Mulino made the statement during a press conference on Wednesday, February 5.
The court’s decision, which declared PPC’s concession contract unconstitutional, forces a major restructuring of port operations at both ends of the Panama Canal. For now, operations will transition temporarily to APM Terminals, the port operating arm of Danish shipping giant Maersk. This interim period will precede two separate public tenders for long-term concessions.
“We will be sovereign over the ports, yes. Under a different scheme, yes,” President Mulino stated. [Translated from Spanish]
The president did not specify the duration of APM Terminals’ temporary management. He also did not address potential concerns about market dominance, given Maersk is already the largest user of the Balboa port. Mulino emphasized the company’s capability, calling Maersk the most important user of Balboa and a firm with the necessary experience to assume control during the transition.
Transition and Arbitration Process Outlined
Mulino clarified that Panama has not harassed PPC, a subsidiary of the Hong Kong-based consortium CK Hutchison. He acknowledged the company’s right to pursue international arbitration following the court’s ruling. The government will defend national interests throughout the transition process, he added, stressing that the judicial decision is final and must be obeyed.
“There [in arbitration] they will present their complaints, their opinions, their legal positions, and we have every right to respond and defend ourselves against that claim,” Mulino said. [Translated from Spanish]
PPC continues to operate both terminals for the moment. The court’s ruling is not yet fully executed as required by law, allowing current operations to proceed until the formal transition begins. This period provides a buffer for planning the handover to APM Terminals and designing the future tender processes.
Global Context and Local Logistics Impact
The move places Panama’s strategy in line with global shipping trends. Major ocean carriers like MSC, Maersk, CMA CGM, COSCO, and Hapag-Lloyd increasingly own and operate key port terminals worldwide. These companies control significant container capacity and manage strategic ports across Asia, Europe, the Americas, and the Middle East.
APM Terminals’ role is further solidified by its recent major investment in Panamanian infrastructure. The company disbursed 600 million dollars last year to acquire operational control of the Panama Canal Railway. This intermodal link between the Atlantic and Pacific is a critical component of the country’s logistics corridor.
Separating the concessions for Balboa on the Pacific and Cristobal on the Atlantic aims to foster competition and potentially attract different specialized operators. The government’s plan suggests a desire to move away from a single operator controlling both canal-facing terminals, a structure now deemed unconstitutional by the Supreme Court of Justice of Panama.
Industry analysts will watch closely to see how the temporary arrangement with APM Terminals influences the subsequent bidding. The government has not released a timeline for the tender launches. The coming months will involve complex legal and logistical coordination to ensure port operations remain stable during the handover and as the country reasserts its control over these strategic assets.