Chinese Port in Peru Confronted with Unexpected Challenge to Business Strategy

Chancay Port: A Private Entity Facing a Public Challenge

Peru’s $1.3 billion port in Chancay is facing a surprising challenge just months before its inauguration later this year. The port, operated by Cosco Shipping, was granted exclusivity over services to be offered on site, but the country’s port authority has now stated that this exclusivity was a mistake. They believe that the port should be open to other companies offering services like loading and unloading shipping containers. This unexpected development could potentially alter the business plan for the port.

Despite the recent regulatory challenge, Transportation and Communications Minister Raul Perez Reyes confirmed that the Chancay port is set to be inaugurated in November. The government is working on adjusting regulations to address the exclusivity issue, aiming to create a framework that is fair to all involved parties. Cosco criticized Peru’s stance, stating that exclusivity over services was a key motivator for their investment in the port and that the challenge negatively impacts the investment climate in the country.

The Chancay port has attracted attention due to US-China trade tensions in South America. US officials have criticized Peru for allowing a state-owned Chinese company to lead such a significant infrastructure project in the country, pointing out that US firms have not made similar investments in the region. However, Peruvian authorities defend their decision, emphasizing the lack of private sector interest from US companies.

Once operational, the Chancay port could revolutionize South American trade by providing a direct route from Chancay to Shanghai through exclusive deals with foreign investors. However, Chancay’s legal structure differs from other Peruvian ports as it was developed as a private entity from the beginning and not concessioned later like public ports are usually done in Peru or other countries around Latin America.

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