The future of two of Panama’s most strategic ports is hanging in the balance after president José Raúl Mulino said on Thursday that public-private partnerships could assume control of the Balboa and Cristobal terminals if the courts strike down the operating contract of Hong Kong-based CK Hutchison Holdings.
The announcement follows legal challenges filed by Panama’s comptroller general Anel Flores, who has lodged two cases with Panama’s Supreme Court seeking to invalidate Panama Ports Company’s (PPC) concession. PPC, 90% owned by CK Hutchison, has operated the Balboa and Cristobal ports since 1997 under a 25-year concession renewed in 2021.
The two ports, positioned at either end of the Panama Canal, have become a flashpoint in the geopolitical struggle between Washington and Beijing. US president Donald Trump placed the facilities at the centre of his inauguration speech in January, vowing to “take back” the canal from Chinese influence. Hours later, Flores announced the audit of PPC, citing royalty underpayments and alleged irregularities in the concession renewal.
In March, BlackRock and Mediterranean Shipping Company (MSC) launched a joint bid to acquire Panama Ports Company as part of a broader deal involving 42 CK Hutchison terminals worldwide. But the transaction quickly met resistance. China’s antitrust regulator said it would review the sale, while Beijing reportedly pressured for state-owned COSCO to be included in the takeover consortium with veto rights.
Flores has argued that PPC’s contract was “unfair” and “abusive,” alleging the renewal was signed without proper authorisation and failed to deliver adequate returns to Panama. One lawsuit seeks to annul the concession outright; the other asks the court to declare it unconstitutional.
Mulino has backed the comptroller’s move, while insisting it is unrelated to the wider geopolitical tug-of-war. Still, the timing of the challenge appears favourable for the US-backed consortium, especially after Panama formally withdrew from China’s Belt and Road Initiative in April.
If the courts rule in favour of Flores, Panama would have to re-tender the contracts. However, legal experts warn the move could expose Panama to costly litigation from CK Hutchison, which could claim the move constitutes politically motivated expropriation.
