EqualOcean has learned that since May, the Peruvian Chancay Port terminal project, constructed under Chinese investment, has been progressing steadily and is expected to be completed by November this year, becoming a major logistics hub in Latin America.
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Chancay Port is located about 80 kilometers north of the Peruvian capital, Lima, and is a natural deep-water port. The Chancay Port project is a landmark initiative of the Belt and Road Initiative in Latin America, including multi-purpose terminals, container terminals, and related infrastructure. As one of the Chinese enterprises' port projects in Latin America, the project is expected to cost USD 3.6 billion and aims to promote bilateral trade. In January 2019, COSCO Shipping Ports Ltd.(中远海运港口有限公司), a subsidiary of COSCO Shipping Group(中远海运集团), acquired a 60% stake in Chancay Terminal, with the transaction being officially completed in May of the same year.
In 2021, the first phase of the project commenced, planning to build four berths with an annual designed capacity of 1 million TEUs. Upon completion, Chancay Port will become a critical transportation hub and logistics center along the South Pacific coast of Latin America, significantly facilitating regional import and export trade. Peruvian Ambassador to China, Balarezo, stated that the construction of Chancay Port will boost employment with the increase in logistics and people flow, thus significantly contributing to Peru's economic and social development.
According to the plan, Chancay Port will develop into a major hub port in Latin America and a gateway port to the Pacific, promoting local economic development and becoming a new connection point and communication bridge for Sino-Peruvian economic and trade exchanges. Mario de las Casas, Director of Public Affairs at COSCO Shipping Group, stated that upon completion, Chancay Port will become "South America's gateway to Asia."
Once completed, the Chancay Port project will be the first large-scale Pacific coast logistics center in South America serving Asia, reducing the need to transit through the Panama Canal or Cape Horn, thus saving shipping time. It will not only serve Peru but also become a primary connection point for goods from Ecuador, Chile, Colombia, and Brazil to China.
However, recent legal disputes surrounding the operation of Chancay Port have impacted the project's construction. In March, the Peruvian National Port Authority announced it was seeking to annul the exclusive operating rights granted to COSCO Shipping for Chancay Port in 2021 through judicial proceedings to "correct administrative errors." The Authority stated that, according to Peruvian competition law, it had no authority to grant such rights. Nonetheless, the National Port Authority emphasized that these measures would not affect the construction of the Chancay Port project and would continue to collaborate with COSCO Shipping to complete the project on schedule.
EqualOcean has learned that COSCO previously sent a letter to the Peruvian Ministry of Economy and Finance, seeking to reach an agreement within six months to resolve the dispute. The letter pointed out that Peru's actions violated the agreement and constituted unfair treatment of COSCO's investment. In April, the Peruvian Congress passed an amendment to the port system law, which may create an opportunity for COSCO to regain exclusive operating rights. However, the Peruvian judiciary has not yet made a final decision, and a special administrative litigation court in Lima is currently reviewing the matter without a set deadline.
This legal dispute highlights the risks brought about by Peru's turbulent political environment, with the country having experienced six governments over the past eight years.