PANAMA CITY — On Monday, Panama’s comptroller authority revealed an audit disclosing irregularities in the renewal process of a 25-year port concession related to the vital trans-oceanic canal. Consequently, a formal request for an investigation into the authorization of the contract involving a Hong Kong-based company has been put forward.
Comptroller-General Anel Flores reported that the audit uncovered significant issues such as payment defaults, accounting miscalculations, and the operation of undisclosed “shadow” companies, which the Hong Kong firm had initially denied. These discrepancies reportedly cost Panama an estimated $300 million in lost revenue.
The release of this audit concerning the Panama Ports Company, a subsidiary of a Hong Kong-based conglomerate responsible for managing ports at both the Atlantic and Pacific ends of the Panama Canal, coincides with allegations from the U.S. government, led by President Donald Trump, of Chinese interference in the canal’s operations. However, these claims have been consistently dismissed by Panamanian authorities. Additionally, the timing of the audit aligns with the arrival of U.S. Defense Secretary Pete Hegseth in Panama to attend a subregional security conference.
“There are various violations that require explanation,” expressed the Panamanian comptroller, emphasizing the need for a detailed account of these issues.
He further stated that the results of the audit would be forwarded to Panama’s Maritime Authority, responsible for overseeing port activities and possessing the authority to nullify the concession if deemed necessary. Attempts to contact the Hong Kong-based CK Hutchison Holdings conglomerate for comments have not yet received a response.
The original contract, secured by Panama Ports Company in 1997, allowed the operation of Balboa and Cristobal ports, and it was subsequently renewed in 2021 for another 25 years.
President Trump has made statements threatening to reclaim control of the Panama Canal, asserting that the U.S. should not have relinquished control to Panama over two decades ago.
Recently, amidst the audit process, CK Hutchison announced its agreement to divest its controlling stake in Panama Ports Company. The stake will be sold to a consortium that includes BlackRock Inc., potentially placing the ports under American influence.
Nevertheless, the Panamanian government reiterates its sovereign control over the canal, clarifying that the involvement of the Hong Kong-based group in port operations does not equate to Chinese dominion over the canal.