In a recent development, the Chinese state-owned company, Cosco Shipping Ports, embroiled in a contentious dispute over the operations of the Chancay Port Terminal in Peru, has reaffirmed its commitment to the terms agreed upon with the Peruvian government.
The dispute, which has sparked legal controversy and raised concerns about the future of the megaport project on Peru’s Pacific coast, centers on Cosco’s exclusive rights to operate the deepwater terminal.
Cosco Shipping Ports, based in Hong Kong, asserted on Tuesday that it would defend its legal rights to provide services as the exclusive operator of the Chancay Port Terminal, emphasizing that these terms were established at the inception of the investment.
The company expressed dismay over the detrimental impact of the legal dispute on the project, cautioning against the imposition of new regulations on ports, which some regulators have hinted at considering.
This statement comes amidst a backdrop of conflicting actions from Peruvian authorities. While the National Port Authority (APN) initially awarded Cosco the exclusive rights to operate Chancay port in 2021, it later renounced this decision in March, citing an “administrative error” and seeking to void the terms.
In response to Peru’s volte-face, Cosco had previously stated its intention to evaluate the repercussions of the decision. Subsequently, Peruvian lawmakers advocated for the continued involvement of private companies in port services, while Economy Minister Jose Arista emphasized the importance of respecting the original port agreement.
The Chancay port project, envisioned as a pivotal hub in the South American Pacific and a crucial driver of growth for Peru, has seen substantial investment from Cosco, with over 70% of the construction already completed.
Despite the ongoing dispute, Cosco recently extended an olive branch to Peru’s economy ministry, proposing a six-month negotiation period to resolve the conflict amicably, thereby averting the need for international arbitration. Minister Arista confirmed the receipt of this proposal and expressed optimism about reaching a resolution without resorting to arbitration.
However, with the ministry yet to respond to Cosco’s overture, the company has indicated its readiness to initiate arbitration proceedings under a Chinese-Peruvian trade pact.
As stakeholders await further developments, the fate of the Chancay port project hangs in the balance, with implications for both Chinese investment in Peru’s infrastructure and the broader landscape of international trade in the region.
