In 2019, state-owned Cosco Shipping initiated the development of a modern multipurpose port in Chancay, Peru. Two years later, Peru's National Port Authority (APN) granted them the exclusive right to manage the port, a standard practice for privately funded terminal facilities. 

However, last month, the APN reversed its decision, citing a lack of legal authority to grant exclusive operator rights in the first place.

The APN described this as a correction of an "administrative error," assuring that it would not impact ground operations. 

Nonetheless, according to the port's management, Cosco Shipping and its Chinese financiers view this development differently.

"We have received communication from the syndicated banks that gave us the loan and from Cosco saying 'What is going on here, we don't understand,'" said Chancay Port manager Carlos Tejada.

The US$3.5 billion port project is currently 70 per cent complete and is scheduled to commence operations by the end of the year. 

If Cosco can resolve issues with the Peruvian government and complete the project as planned, Chancay Port will establish a direct link from South America's west coast to China's industrial hub, carrying substantial regional implications. 

Brazil's government is contemplating collaborating to transport agricultural goods overland to Chancay, enabling direct shipment to China without reliance on the Panama Canal.

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