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President says that state-owned partnerships could take over the ports operated by CK Hutchison in Panama.

Panama's president Jose Raul Mulino stated on Thursday that public-private partnerships may take over two important ports near the Panama Canal if a court invalidates CK Hutchison's contract to operate them.

CK Hutchison owns 90% of the local Panama Ports Company. This company had a 25 year concession to operate Balboa Port and Cristobal Port, which are located at the ends of the Canal. The concession was renewed in 2021.

The contract is at the heart of a dispute after U.S. president Donald Trump threatened this year to take control of the waterway because China has influence over Panama's marine industry. CK Hutchison wants to sell its stakes in the Panamanian firm as part of a

massive global deal

Two suits were

Filed with the Supreme Court

The Panamanian Comptroller-General's Office filed a complaint this week, seeking to declare the agreement as unconstitutional, and nullify it on the grounds that the renewal had not followed the required legal steps including the Comptroller’s approval.

Mulino said at a press briefing that he did not see the Panama Ports contract continuing, whether it was amended or not. Mulino said, "We'll wait for the decision," Mulino said in reference to the lawsuits.

The comptroller has publicly criticized the contract for alleged irregularities committed by the former government, and the insufficient income generated by the deal to Panama. However, the full results from a recent audit conducted by his office are not yet available.

Legal challenges in Panama have complicated a highly sensitive diplomatic plan by a consortium headed by U.S. asset management firm BlackRock, to purchase a significant portion of CK Hutchison’s global ports business. The deal has been praised by Washington but criticized by China.

The deal has been made

Increasingly politicized

A U.S.-China Trade War is underway. Beijing claims it has important national interests in this transaction, and that the proposed deal is a betrayal to the country.

The government of Panama is looking at partnerships with the state to operate a copper mine that was previously operated by Canada’s First Quantum Minerals. Their contract has been declared invalid.

Unconstitutional

Mulino explained that the idea was still in draft form, and would cover the ports as well as the mines through partnerships with state. (Reporting and writing by Elida Moreno and Marianna Pararaga; editing by Brendan O'Boyle).

(source: Reuters)