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Chancay: US$8 billion investment could stop

Chancay: US$8 billion investment could stop

The Chinese State, the main shareholder of the Cosco Shipping company, would be evaluating not continuing with investments in the Chancay megaport after the completion of its first stage of US$1.3 billion, due to a controversy with the National Port Authority (APN) that risks the exclusivity agreement in the administration of the terminal.

Carlos Tejada, deputy general manager at Cosco Shipping Ports Chancay Peru, told the special project monitoring commission in Congress that the company received all the guarantees from the Peruvian State when it signed the authorization to build the port with purely private capital, which He will then manage to turn the country into a global hub.

“We have received communication from the syndicate of banks that gave us the loan and the Cosco subsidiary itself. Behind this first stage of investment came technology transfer and a logistics and industrial park, about US$7,000 or US$8,000 million more,” Tejada lamented.

Cosco is granted port authorization for stage 1 of the ‘Chancay TPM’ project through Board of Directors Agreement Resolution No. 0008-2021-APN-DIR in February 2021. The problem occurs with its second article, in which, in detail, grants “the exclusivity of the exploitation of essential services in the port infrastructure.” The president of the APN Board of Directors at that time was Carlos González Diez Canseco.

Article of contention

Now, APN recognizes that it never had the authority to issue that second article, and that rather there was a “legal loophole” that was used to allow exclusivity with “legal interpretations,” as if it were a concession.

For this reason, the authority, based on the observation made by the Olaechea Study, initiated a judicial process this year in order to correct that “administrative error.”

“In the 21 years that the APN has had, exclusivity has never been given in a resolution that approves a port authorization […] What both Ositrán, Indecopi and APN are saying is that there is no legal framework that empowers us to grant exclusivity,” said Milagros Miguel, head of Legal Counsel at APN.

APN claims to raise the voice of protest in order to safeguard the rest of the private investments that the sector sees. For this reason, last November it presented a proposal to modify the National Port System Law before the Ministry of Transportation and Communications (MTC), with which it hopes that the Chancay case “will be regularized.”

The APN has assured that construction will not stop, but the company expressed its concern about an agreement that was supposed to have been finalized and signed, just seven months after inaugurating the infrastructure, the cornerstone for the visit of Chinese President Xi Jinping. during the APEC 2024 summit in Peru.

China: key trade partner of Peru

The Chancay megaport has a planned investment of US$1.3 billion and should be ready in November 2024. Subsequently, it could be expanded with an investment that exceeds US$3.5 billion.

According to the Foreign Trade Society (Comex), between 2010 and 2023, the value of Peruvian exports to China increased by an impressive +325.9%, and reached a total of US$23,156 million last year.

According to the Peruvian Chinese Chamber of Commerce (Capechi), the Asian country maintains the largest foreign direct investment (FDI), which until May 2023 amounted to US$13.6 billion.

Source: Larepublica

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