PSA Panama is a port operator located in the old naval base of Rodman, on the western shore of the Pacific entrance of the Panama Canal. PSA Panama is dedicated to providing port services to vessels, specializing in the handling of container loading and unloading with the best industry standards. PSA began operations, servicing cargo of iron products and other supplies used for the expansion of the Panama Canal in 2010, while container operations formally began in 2012.
The PSA Panama Concession Contract was approved by the National Assembly through Law 36 of June 19, 2008, where the Panamanian State signed a contract with PSA Panama for the operation of a port in the area of the former Rodman Naval Base. With this, the State allowed the construction and operation of a port terminal with capacity for 450,000 TEUs (twenty-foot equivalent unit) at the Pacific entrance of the Canal.
Then, in 2013, PSA Panama and the State, represented by the AMP, evaluated a new concession contract, which would become a new Contract Law through the approval of the National Assembly and the Executive Power, thus replacing the Contract Law 36 of June 19, 2008. The objective of the Contract Law is to increase the operational capacity of the port to 1, 850,000 TEUs, operate and manage the port terminal, make an investment of at least $ 371 million dollars (PSA Panama exceeded this amount, investing more than $615 million dollars in Phase I and II) and create employment for Panamanians.
The process of the new Contract Law concluded in 2015 with the different approvals and permits by all corresponding entities and regulates the terms and conditions of the concession. This contract mainly includes the legal framework of PSA Panama, as well as the applicable legislation, which includes, without limitation, Law 56 of the Port of 2008 and the ISPS Code.
No, the State of Panama doesn’t have the obligation to call a public tender to grant a concession for the construction and operation of a port terminal to an organization.
It is important to note that the investment commitment of PSA Panama is contractually regulated, where the Treasury of Panama, in addition to the concession fees, derives additional fiscal revenues through the expansion of PSA Panama’s operations.
The procedure implemented in the Contract Law case of PSA Panama is not exclusive. Different port operators in the Canal Zone currently have similar agreements, which have been established through the same processes and steps that PSA Panama has carried out for the Contract Law.
PSA Panama is a private subsidiary of PSA International, one of the leading port groups worldwide. PSA International is registered in the Republic of Singapore as a private entity in accordance with the provisions of the Companies Act of Singapore. In addition, PSA International is a corporation with sufficient capabilities to perform all the functions of a registered company. PSA International is not a governmental or semi-governmental entity of the Government of Singapore. It is an autonomous entity, both legally and financially, that operates under civil and commercial law. PSA International has operations in 16 countries; being PSA Singapore and PSA Antwerp the flagship operations of the company.
Before becoming PSA International, PSA was the acronym that meant Port of Singapore Authority, and functioned as a statutory directive responsible for regulating, developing, operating and promoting the Singapore port terminal.
In 1996, the regulatory functions of the Ports Authority of Singapore were delivered to the Maritime and Port Authority of Singapore. In 2003, PSA International became an investment holding company for PSA companies in Singapore and around the world.
In 2008, PSA International began evaluating opportunities to expand its port network, especially in Panama, and began negotiations to build a terminal.
The State. The Contract Law is not a transfer of ownership or title of the area where the container terminal is being developed. Within the scope of the Contract Law, lands are under the full control and title of the Panamanian State at all times.
Since 2015, several complaints have been filed against PSA Panama and / or the previous concessionaire, PIMPSA, which have been dismissed. These complaints have involved assumptions of: irregularities in the lease and land concession of the Rodman area, lack of compliance with public bidding processes, self-allocation between parties that have a common shareholder, unfair tax exemptions, among others.
However, consistently the final cases have reiterated, on the part of the competent authorities, the legality of the Contract Law between the State and PSA Panama. In general, these complaints have lacked legal validity or sufficient evidence. More importantly, the Supreme Court of Panama has ruled on two occasions that the previously denounced provisions of the Contract Law between PSA Panama and the State are, in effect, constitutional.
The Maritime Industrial Park of Panama S.A. (PIMPSA) is a private company registered in Panama and previous concessionaire of the area of the former Rodman naval base.
PSA Panama, in the process of investment in the logistics sector of Panama, identified that in the west bank of the Canal there is a high demand for capacity to serve incoming vessels. Therefore, PSA offered PIMPSA to lease Polygon 4 for the construction and operation of a container terminal. This agreement was granted with Contract Law No. 36 signed on June 19, 2008, between the Maritime Authority of Panama and PSA Panama. The Contract Law was made official with the publication of the Official Gazette No. 26,066 of June 20, 2008.
In 2013, PSA Panama decided to start the process of port expansion, for which it was necessary to increase the concession area and request a new Contract Law.
As a concessionaire of the Rodman area, PIMPSA rescinded the concession it had over some of the polygons, which were returned to the Ministry of Economy and Finance, who transferred them to the AMP for it to sign and grant the concession area in favor of PSA Panama.
Serviamerica, Corp., is a company that had the intention of building and operating a multimodal port next to the old Rodman naval base, with the first purchase option. To that end, Serviamérica requested the Reverted Property Unit of the Ministry of Economy and Finance to grant a lease with investment on the polygon. Even with the approval of the Cabinet Council, the contract was not perfected, so there was no execution of this project.
In March 2015, the lawyer and politician Miguel Antonio Bernal, denounced the Cabinet Resolution that approved the Lease and Investment Agreement between the Ministry of Economy and Finance and Serviamerica, Corp.
Bernal argued that the adjudication process violated normal / standard public bidding procedures and that Serviamerica was acquiring the land at a price below its market value.
The complaint was evaluated by the Anti-Corruption Prosecutor's Office of the Attorney General's Office and judged by the Second Criminal Court of Panama, and was dismissed by the competent authorities when it was determined that the Lease and Investment Agreement didn´t have legal validity since it was not executed.
On the other hand, in July 2017, Cochez and Martínez filed a complaint with the Attorney General's Office, requesting an investigation into the award process of the previous and current concession of the Rodman area. The allegations pointed out that the public administration abused its authority and acted improperly. They also questioned that there is a supposed association between PIMPSA, Serviamerica and PSA, to self-assign a concession agreement.
However, the Attorney General's Office dismissed the complaint because previously these accusations had been judged in favor of PSA Panama.