2025-04-08T06:06:19.000Z

PANAMA CITY -- Panama’s comptroller authority announced on Monday that an extensive audit has uncovered significant irregularities related to the renewal of a 25-year port concession linked to the interoceanic canal. This revelation has prompted officials to request a formal investigation into the circumstances surrounding the contract awarded to a Hong Kong-based company, raising eyebrows in the context of ongoing international scrutiny of the Panama Canal.

Comptroller-General Anel Flores disclosed that the audit revealed several issues, including instances of payment defaults, accounting discrepancies, and the emergence of undisclosed 'shadow' companies that were originally denied by the Hong Kong firm. The financial implications of these findings are substantial, with estimates indicating that Panama has suffered approximately $300 million in lost revenue as a result of these irregularities.

The release of this audit concerning the Panama Ports Company, a subsidiary of the Hong Kong conglomerate CK Hutchison Holdings, comes at a particularly sensitive time. It coincides with U.S. President Donald Trump’s administration making allegations of Chinese interference in the operations of the Panama Canal, claims that Panamanian authorities have categorically denied.

This situation is further complicated by the arrival of U.S. Defense Secretary Pete Hegseth in Panama for a subregional security conference, highlighting the geopolitical tensions that surround this vital maritime route.

“There are many violations that will have to be explained,” stated Comptroller-General Flores during a press briefing. He indicated that the findings from the audit would be forwarded to Panama’s Maritime Authority, which holds the authority to terminate contracts if deemed necessary, a move that could reshape the landscape of port operations in the country.

CK Hutchison Holdings, which operates the ports at both ends of the Panama Canal—Balboa on the Pacific side and Cristobal on the Atlantic—did not immediately respond to inquiries regarding the audit or the investigation. The company had originally won its concession in 1997, which was subsequently renewed in 2021 for an additional quarter-century.

Notably, the situation is further complicated by historical tensions regarding control over the Panama Canal. In recent statements, Trump has expressed a desire to regain control of the canal, arguing that the United States should never have relinquished it to Panama more than two decades ago. This rhetoric is indicative of underlying concerns about foreign influence and control over a critical infrastructure that serves as a key conduit for global trade.

In a recent development, while the audit was still ongoing, CK Hutchison announced its decision to sell its controlling interest in the Panama Ports Company to a consortium that includes BlackRock Inc., effectively transferring control of the ports to American interests. This move is seen as a strategic effort to mitigate concerns regarding Chinese presence in the region.

The Panamanian government has consistently asserted that it maintains full control over the canal, and the operations of the Hong Kong-based group should not be interpreted as a transfer of power to Chinese entities. However, the ongoing scrutiny and allegations have raised questions about the future of foreign investments and operations within this crucial maritime passage.