The Panamanian government seized two ports at the entrances of the Panama Canal on Monday according to a Hong Kong-based company that has operated them for decades, a move triggered by a final Supreme Court ruling that declared the company’s concession unconstitutional.
Panama annulled key port contracts held by a subsidiary of Hong Kong-based CK Hutchison in its official gazette Monday, transferring interim operations of the ports to Danish shipping giant A.P. Moller-Maersk and Swiss-based Mediterranean Shipping Co.
The notice formalized a Supreme Court ruling last month that the concessions for the Balboa and Cristobal terminals near the Panama Canal, which Panama Port Company (PPC), a subsidiary of CK Hutchison, had held for more than two decades, were unconstitutional.
The Panamanian government on Monday formally assumed control of the port facilities, including cranes, vehicles, computer systems and software under a decree aimed at ensuring uninterrupted operations until a new concession is awarded within 18 months.
Under the interim arrangement, APM Terminals, a unit of Maersk, will operate the Balboa port on the Pacific side of the canal, while MSC’s port operating subsidiary, Terminal Investment, will run the Cristobal port on the Atlantic side.
In a statement to CNBC Tuesday, Maersk said APM Terminals has begun temporary operations at the Port of Bolboa for a period of up to 18 months. “One of the main tasks will be the deployment of a new terminal operating system and the training of the workforce in this new system,” the shipping group said.
Separately, CK Hutchison said PPC had ceased all operations at the terminals on both sides of the canal on Monday, while describing the executive decree “unlawful.” The Hong Kong conglomerate said it would continue to consult legal advisors regarding the ruling and takeover.
Stella's Place 