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Audit Exposes Major Breaches in Panama Canal Port Concession, $300 Million Owed to State

The Comptroller General of Panama, Anel Flores, stated on Monday that the audit initiated last January on the Chinese company CK Hutchison’s subsidiary, which operates two ports around the Panama Canal, has revealed a series of breaches of contract, a multi-million dollar debt with the State, and irregularities in the automatic renewal of the concession.

“More than 300 million (dollars) are owed to us due to breaches in the contract,” Flores said, referring to Panama Ports Company (PPC), which operates the Balboa and Cristóbal ports located at the Pacific and Atlantic entrances of the Canal, respectively.

PPC has managed Balboa and Cristóbal, two of the five ports around the Canal, since 1997, when it was granted a 25-year concession contract that was automatically extended for another 25 years in June 2021, amid accusations of alleged corruption and unfavorable conditions for the Panamanian State, which holds a 10% stake.

In a press conference surrounded by auditors, the comptroller made a lengthy list of the unfavorable results for the Panamanian State from a modification to the concession conditions made in 2002, during the government of Mireya Moscoso (1999-2004).

These changes, which among other things eliminated a 22 million-dollar annual fee to the treasury, left the State with a fee based on container entries and included a series of tax exemptions, allowing the treasury to lose “about 1.2 billion dollars over two decades, at a rate of 55 million dollars per year.”

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“This situation is not the company’s fault,” Flores said, “but rather the fault of some ‘bad Panamanians’ who negotiated the concession contract very poorly.”

The automatic renewal of the PPC concession approved by the Board of Directors of the Panama Maritime Authority (AMP) “did not meet all the legal requirements and also lacks the endorsement of the General Comptroller’s Office,” something the law mandates, Flores emphasized.

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Central America

Panama begins reverse migration by sea for 109 stranded migrants

Panamanian authorities have transported a group of 109 migrants of various nationalities by sea to La Miel, a Caribbean town on the country’s border with Colombia, to continue their return journey to South America. The move comes after the migrants failed to settle in the United States, following stricter immigration policies implemented under the administration of former President Donald Trump.

The National Migration Service (SNM) of Panama announced in a statement on Tuesday that the transfer was carried out from the Caribbean port of Colón using a vessel from Panama’s National Aeronaval Service (Senan). The operation was part of the country’s so-called “reverse flow” initiative, aimed at facilitating the safe return of migrants.

The official report noted that the group included migrants from nine different nationalities, with 75 adults and 34 minors on board. Authorities emphasized the “inter-institutional commitment to safe and humanitarian reverse migration.”

A source familiar with the process, speaking anonymously to EFE, confirmed that the vessel departed on Monday. Many of the migrants had opted into the reverse flow program after arriving at the Temporary Attention Center for Migrants (CATEM) in Costa Rica, where coordination was made with Panamanian authorities for their return.

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Central America

Ombudsman: Tear gas overused in Arimae protest crackdown

Panama’s Ombudsman Office stated on Tuesday that the National Police (PN) used excessive tear gas to disperse a protest in the indigenous community of Arimae, which escalated into a violent clash lasting several hours and leaving multiple people injured on both sides.

After a two-day visit to Arimae, a town in the Darién province about 200 kilometers from Panama City, Ombudsman Eduardo Leblanc reported that “there was clear evidence of the excessive use of tear gas in the community, which has caused various health issues among the population.”

The confrontation occurred on June 5, when police forces arrived to clear a section of the Pan-American Highway — which spans the entire country — that had been blocked by residents using tree trunks. The blockade was part of a protest against a newly enacted social security reform.

According to EFE, police responded with tear gas and rubber bullets, while demonstrators hurled rocks, sticks, arrows, and even Molotov cocktails.

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Central America

Honduras sees 7.8% rise in external public debt year-on-year

Honduras’ public sector external debt reached $9.96 billion by the end of April 2025, marking a 7.8% increasecompared to the same period in 2024, according to a report released Tuesday by the country’s Central Bank (BCH).

The figure represents a rise of $725.8 million compared to the $9.24 billion recorded between January and April 2024.

However, the debt balance decreased by $243.2 million compared to December 2024, when it stood at $10.2 billion. This reduction was primarily due to higher principal payments totaling $410.8 million, while new disbursements reached only $87.4 million, resulting in a net amortization of $323.4 million. This effect was partially offset by unfavorable exchange rate fluctuations, which increased the debt balance by $80.2 million.

By institution, the general government holds 90.8% of the debt (approximately $9.05 billion), followed by the monetary authority with 7.7% ($770 million), non-financial public enterprises with 1.3% ($126.6 million), and public financial institutions with 0.2% ($16.5 million), the BCH detailed.

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