Panama AG agrees Hong Kong firm's canal concession is 'unconstitutional'

Panama's attorney general said Wednesday that concession granted to a Hong Kong-based firm to operate ports on either end of the Panama Canal should be scrapped for being "unconstitutional."

The contract held by CK Hutchison Holdings, owned by Hong Kong billionaire Li Ka-shing, has been at the root of US President Donald Trump's concerns for Chinese influence over the waterway.

The Panama Ports Company, a subsidiary of CK Hutchison, manages two of the canal's five ports, an arrangement in place since 1997 via a concession from the Panama government.

Last week, Panama's Supreme Court agreed to consider a request filed by a lawyer to nullify the contract -- the second such challenge before it.

On Wednesday, Attorney General Luis Carlos Gomez filed a submission in support of the suits and asking the court to find the contract "unconstitutional" for "improperly agreeing to transfer exclusive rights of the Panamanian State."

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Panama Ports Company manages the ports of Cristobal on the canal's Atlantic side and Balboa on the Pacific side.

The arrangement was renewed in 2021 for 25 years.

The plaintiffs in the case argue that the company benefited from undue tax breaks and other benefits.

The legal challenge came after Trump threatened to take back the canal -- built by the United States and handed over to Panama in 1999 -- claiming China was effectively "operating" the vital waterway.

Following Trump's charges, Panama also announced it would audit the Panama Ports Company.

CK Hutchison Holdings is one of Hong Kong's largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.

Source: AFP