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Panama Canal boss warns MSC ports deal could threaten neutrality

According to the Financial Times, Ricaurte Vasquez, head of the Canal Authority, the sale of two Panama Canal ports to a global group led by Mediterranean Shipping Company threatens the principle of neutrality of the canal.

Vasquez, in a Tuesday report by the FT, said that there is a risk of a concentration of capacity if the deal is structured the way we currently understand it.

If there is a high concentration of terminal operators that are part of a single integrated shipping company or if they belong to merely one, this will affect the competitiveness of Panama on the market. This is incompatible with neutrality.

MSC is one the top container shipping companies in the world. MSC and Panama Canal Authority didn't immediately respond to our request for comments.

CK Hutchison announced last month that MSC was owned by the Italian billionaire Gianluigi Aponte's family and the group seeking to purchase 43 ports including two in Panama for $22.8 billion.

Clarification comes after weeks of criticism and scrutiny in China regarding CK Hutchison’s plan to sell ports to a group led by U.S. Investment firm BlackRock. BlackRock is still part of the group.

After the announcement, Donald Trump, the U.S. president has expressed his desire for a reduction of Chinese influence in the Panama Canal region and called the proposed sale a "reclaiming of the waterway".

In April, China’s top market regulator stated that it was closely monitoring CK Hutchison’s planned sale. It also said that the parties to the transaction should not attempt to avoid an antitrust investigation.

Vasquez said that the canal could use the deal with the ports to become its own terminal operator by reactivating the project to build a port in Corozal, at the Pacific end of canal. (Reporting and editing by KanjyikGhosh; Muralikumar Anantharaman & Kate Mayberry).

(source: Reuters)