Peru Port Dispute Escalates as COSCO Insists on Original Terms

🌈 Abstract

The article discusses a dispute between the Chinese state-owned company Cosco Shipping Ports and the Peruvian government over the operations of a megaport that Cosco is building on Peru's Pacific coast.

🙋 Q&A

[01] Cosco Shipping Ports' Dispute with the Peruvian Government

1. What is the dispute between Cosco Shipping Ports and the Peruvian government?

• Cosco Shipping Ports was awarded the exclusive right to run the Chancay Port Terminal in Peru in 2021 by the National Port Authority (APN).
• However, in March 2023, the APN said it never had the legal authority to grant Cosco the exclusive rights, citing an "administrative error" and requested a judge to void the terms.
• Cosco insists on defending its legal rights to provide services as the exclusive operator of the Chancay Port Terminal under the agreed terms.

2. How has the legal controversy impacted the project?

• Cosco stated that the legal controversy has harmed the project.
• Cosco cautioned against imposing new rules on ports that some regulators have said they might consider.

3. What steps has Cosco taken to resolve the dispute?

• Cosco sent a letter to Peru's economy ministry requesting a six-month negotiation to amicably resolve the dispute without resorting to international arbitration.
• Cosco noted that the ministry had yet to respond to its letter, proposing an "institutional channel" for talks.
• Cosco also said it has taken a first step toward invoking an arbitration process allowed for by a Chinese-Peruvian trade pact.

[02] Chancay Port Terminal Project

1. What is the Chancay Port Terminal project?

• Cosco began developing the Chancay port in 2019 as a hub in the South American Pacific and a key growth driver for Peru.
• Cosco 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.

2. What is the importance of the Chancay Port Terminal project for Peru?

• The Chancay Port Terminal project is a key growth driver for Peru's economy.