The Government of Peru seeks to avoid an international arbitration process that could be presented by the Chinese port operator Cosco Shipping due to a legal dispute over the exclusivity rights linked to the Chancay megaport , which the company is building, according to a Peruvian official told Reuters. .
Cosco sent a letter to Peru’s Economy Ministry in mid-April to begin a six-month negotiation process to reach an amicable resolution without having to resort to international arbitration, local media first reported. The Minister of Economy, José Arista , said in an interview with local radio RPP that he received the letter but had not yet responded.
In March, the National Port Authority of Peru (APN) maintained that an “administrative error” had given Cosco Shipping exclusivity over operations at the Chancay megaport and asked a judge to annul the decision. Cosco is expected to spend $1.3 billion on the first phase of the site.
Since then, the government has promoted measures to allow private port operators to provide services exclusively. Arista said he was “sure” that Peru and Cosco would not have to go through an arbitration process, “we will reach an agreement sooner,” he stated.
Cosco’s office in Peru did not immediately respond to a Reuters request for comment. A free trade agreement between Peru and China, which has been in effect since 2009, protects investments and has allowed greater trade between the countries. “We believe that (the proposal) will soon be submitted to a second vote in Congress, which will calm things down,” Arista noted.
In Peru, measures must be voted on twice to be binding. Lawmakers approved the motion in a first vote earlier this month, although the second vote is still pending.
In April, Cosco Shipping confirmed that its investment in the Port of Chancay was ongoing and that it still hoped to inaugurate the first part of the port in November of this year for the Asia-Pacific Economic Cooperation (APEC) leaders’ summit .
