China’s COSCO Shipping Set To Operate Peru’s New Mega-Port In Chancay

COSCO Shipping’s new container terminal in Chancay, Peru, will be operational, with a soft opening planned soon.

The port, located 50 miles north of Peru’s capital, Lima, is more than 90% complete and has four operational berths. Despite Peruvian government objections, COSCO, the Chinese shipping giant, will be the facility’s sole operator.

Chinese President Xi Jinping is set to formally launch the facility on November 14 during his visit to Peru for the Asia-Pacific Economic Cooperation (APEC) meeting.

However, due to security concerns, Xi will open the port remotely using a video link from the Chinese Embassy in Lima.

Chancay is set to become a key distribution hub for trans-Pacific trade. In its early stages, COSCO plans to operate two 14,000 TEU (Twenty-foot Equivalent Units) container ships weekly, connecting the port to Shanghai.

As the terminal expands, it will be able to accommodate larger vessels carrying up to 24,000 TEU.

The port will also accommodate smaller vessels transporting containers to neighbouring South American countries like Chile, Colombia, and Ecuador.

There are even plans to use the terminal to supply regions of Brazil that are too far inland for Atlantic coast ports to properly reach.

A consortium of Chinese banks has sponsored the project, which is worth $3.5 billion. This is seen as a big achievement for China’s Belt and Road Initiative (BRI), a program aimed at building infrastructure worldwide.

However, the BRI faced criticism in other regions, with some governments failing to repay debts, forcing China to take control of facilities.

The strategic importance of the Chancay port has raised concern in the United States. General Laura Richardson, the outgoing commander of the United States Southern Command, is concerned that the port’s deep-water capabilities may make it suitable for Chinese military use.

The port’s features, in particular, may allow Chinese vessels to dock, potentially making it a base for regional intelligence-gathering activities.

Richardson said that Chancay’s potential as a “dual-use” facility serving economic and military purposes aligns with China’s goal of growing its presence in Latin America.

The US military has observed similar patterns in other areas where China has built ports, often raising security concerns.

China’s rising presence in Latin America, mainly through the Belt and Road Initiative, has increased its influence in the region, formerly considered the United States’ “backyard.”

Beijing is currently South America’s largest commercial partner and a major investor in essential industries like minerals, transportation, and energy.

Reference: Financial Times

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