Chinese Port in Peru Confronted with Unexpected Challenge to Business Strategy

Chancay Port Exclusivity Challenge: A Setback for Peru’s Asia-Pacific Economic Conference Hosting?

The Chancay port, set to open in November during Peru’s hosting of the Asia-Pacific Economic Cooperation conference, has attracted attention due to US-China trade tensions in South America. However, the port’s exclusivity granted to Chinese company Cosco Shipping is facing a surprising challenge just months before its inauguration. Peru’s port authority recently stated that this exclusivity was a mistake and that the port should be open to other companies offering services like loading and unloading shipping containers.

The decision to grant exclusivity over services to Cosco Shipping sparked controversy among Peruvian authorities and US officials who criticized it. US officials accused Peru of allowing foreign investment from China at the expense of private sector interests from US firms. However, Peruvian authorities defended their decision by emphasizing the lack of interest from US companies in investing in infrastructure projects in the region.

Once operational, the Chancay port could revolutionize South American trade by providing a direct route from Chancay to Shanghai. Exclusive deals are common in Peru, enabling port operators to recoup their investments by charging for infrastructure use. However, Chancay’s legal structure differs from other Peruvian ports as it was developed as a private entity from the beginning, unlike public ports that are later concessioned to private operators.

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

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