Government Begins Transition at Ports of Balboa and Cristóbal

The Board of Directors of the Panama Maritime Authority (AMP) could approve a transitional operating plan for up to 18 months for the port terminals of Balboa and Cristóbal. This is part of the state strategy to guarantee the continuity of service while a new long-term concession model is defined. For this purpose, the best international law firms will also be hired to defend Panama, as has been done in the past in various arbitrations that Panama has faced. It was also indicated that the occupation decree allows the use of port equipment to guarantee operational continuity, although economic agreements must subsequently be reached with the owning company. "The occupation decree is to guarantee that this equipment can be used by Panama to continue the operation of the port, and the port operators that we are bringing in from the first world and of the highest quality also know how to operate this equipment, and it is the Panamanians who operate it here; these Panamanian workers are the ones who will continue operating this equipment and, obviously, it must be acknowledged that in due course these teams will have to reach agreements with the company to resolve the economic aspect of this," said engineer Zubieta. During this period, the government will define the model Panama will adopt in a future international tender for long-term concessions. According to the information presented at the conference, APM Terminals, a subsidiary of AP Moller-Maersk, will temporarily operate the Port of Balboa on the Pacific coast, while Terminal Investment Limited (TiL), the operating and investment arm of Mediterranean Shipping Company, will operate the Port of Cristóbal on the Atlantic coast. Authorities explained that, unlike the previous scheme, two separate contracts will be submitted: one for the Port of Balboa (Pacific) and another for the Port of Cristóbal (Atlantic). As explained, the goal is to improve management and enable differentiated operating models. "This is to guarantee port stability for these 18 months," said Zubieta. In his turn, the national director of Ports, Max Flores, confirmed that the roadmap includes the temporary hiring of operators while the process to select definitive concessionaires is carried out. Authorities indicated they have held talks with large-scale international operators to ensure stability during the transition period. In response to inquiries from Newsroom Panama, Alemán Zubieta indicated that the companies involved could resort to international arbitration. In the case of the Pacific port, it will be APM Terminals. However, the State asserted that it will defend itself with specialized law firms, as it has done in previous cases. "We recognize that this is a state governed by the rule of law, that companies have the right to initiate arbitration proceedings, as they have already done, and that the Panamanian state will have the right to defend itself. We have sought out operators who handle the cargo." Alemán Zubieta indicated that the country is evaluating structures different from the current ones, in order to strengthen competitiveness and logistical connectivity. For her part, Labor Minister Jackeline Muñoz reiterated that there will be no layoffs and that the employer substitution process will be implemented gradually as temporary operators take over.