The Panama Canal has launched what is expected to be a year-long process to select the operators for new terminals to be built at each end of the canal. At the same time, the authorities are considering the alternative for the existing terminals, which are operated by Hong Kong’s CK Hutchison and which became embroiled in the geopolitical disputes between China and the United States.
Plans were announced for the potential development of a terminal at each end of the Panama Canal, which the officials said would increase container transshipment capacity by 5 million TEU annually. They position the project as designed to enhance the competitiveness of Panama as an intermodal hub and to increase port capacity, while it also responds to the pressures from the United States. Donald Trump has repeatedly asserted that China controls the Panama Canal.
The Panama Canal Company reports that 22 of the leading companies in terminal operations and major container carriers attended a recent presentation on the plans for the new terminals. Participating were the major terminal operators, including APM Terminals, Cosco Shipping Ports, CMA Terminals, DP World, Hanseatic Global Terminal (HAPAG), MOL, PSA International, SSA Marine-Grupo Carrix, and Terminal Investment Limited (MSC).
Major carriers also attended the presentation. Panama reports that CMA CGM, ONE, Evergreen, Hapag-Lloyd, HMM, Maersk, MSC, OOCL, COSCO, Yang Ming, and Zim were represented. Also present was the Port of Houston.
Panama envisions completing the selection process in the fourth quarter of 2026. It will include a prequalification of the bidders and dialogues with the companies.
They will also be conducting a market and feasibility study for each of the terminals, which would be located in Balboa and Cristobal. The studies will inform the general project plan and ultimately the selection of the concessionaire. They estimate the cost of the two terminals will be $2.6 million.
Panama currently has five terminals, which combined handle more than 9 million TEU annually. However, the focus has been on the two operated by CK Hutchison, which received a 25-year extension of its concession in 2021.
In addition to the political focus on the Chinese-operated terminals, there is a legal challenge pending in Panama’s Supreme Court filed by the country’s attorney general. They assert the concession is illegal because of the no-bid process by which it was awarded. Hutchison has defended its concession, reporting that it is meeting all the obligations and investing in the operations.
Officials of the Panama Canal Company report they are planning for the potential that the concession is voided, in which case they would step in as the interim operator to maintain the supply chain. In this case, they expect a new bidding process would take 12 to 18 months to award a new contract. They, however, hold out the possibility that a deal can still be reached with CK Hutchison, which earlier this year proposed to sell the concession to a partnership led by U.S.-based BlackRock with investment from MSC’s Terminal Investment Limited. Negotiations were underway to save the deal by having COSCO take a position in a new partnership for the terminal portfolio.
