Peru port conflict escalates as Chinese firm insists on original terms

COSCO SHIPPING Ports

07/05/2024 21:06

By Marco Aquino
       LIMA, May 7 (Reuters) - The Chinese state-owned company
at the center of a dispute over operations of a megaport it is
building on Peru's Pacific coast insisted on Tuesday on terms
agreed with the government, as some local officials have sought
to backtrack on the deal.
    Hong Kong-based Cosco Shipping Ports will defend its legal
rights to provide services as the exclusive operator of the
deepwater Chancay Port Terminal under "terms that were agreed at
the beginning of this investment," the firm said in a statement.
    Cosco added that the legal controversy has harmed the
project and cautioned against imposing new rules on ports that
some regulators have said they might consider.
    Peru's government did not immediately respond to a request
for comment.
        Cosco began developing Chancay port in 2019 as a hub in
the South American Pacific and key growth driver for Peru. In
2021, Peru's National Port Authority (APN) awarded Cosco the
exclusive right to run Chancay, but said in March that it never
had the legal authority to grant it. It blamed an
"administrative error" and requested that a judge void the
terms.
    Cosco responded at the time that it was evaluating the
impact of the decision. Since then, Peruvian lawmakers have
pushed to allow for the exclusive provision of port services by
private companies and Economy Minister Jose Arista has said the
original port deal should be respected.
    Cosco, which provides marine transportation services, is
expected to invest some $1.3 billion on the first stage of the
$3.5 billion project, with more than 70% of construction
completed.
    Last month, Cosco sent a letter to Peru's economy ministry
requesting a six-month negotiation to amicably resolve the
dispute without resorting to international arbitration, which
Arista said had been received.
    At the time, he said he expected to reach a deal and avoid
arbitration.
    In its statement on Tuesday, Cosco noted that the ministry
had yet to respond to its letter, proposing an "institutional
channel" for talks. But it also said it has taken a first step
toward invoking an arbitration process allowed for by a
Chinese-Peruvian trade pact.


 (Reporting by Marco Aquino; Writing by David Alire Garcia;
Editing by Richard Chang)
 ((david.aliregarcia@thomsonreuters.com; +52 55 5282 7151;
Reuters Messaging:
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