By John Caicedo | 2025-06-27

LIMA -- Since its inauguration in November 2024, the Chancay megaport has placed Peru at the center of a contentious debate over economic sovereignty and market competition.

While Beijing hails the Chinese-backed terminal as a driver of bilateral trade, Peruvian authorities have raised red flags about the operational model of the megaproject, which is led by state-owned Cosco Shipping.

In May, Peru's transport investment regulator, Ositrán, asked the national antitrust agency Indecopi to assess whether conditions at Chancay ensure fair competition, particularly in comparison to other ports like Callao.

Following interviews with shipping firms, exporters, importers and regional officials, Indecopi concluded that Chancay lacks the safeguards for open competition.

Citing those findings, the government will now plan to regulate tariffs at the port through Ositrán, with a final proposal due by July 24.

Cosco, which holds a controlling stake in the port, responded swiftly and defiantly. In a public statement, the company warned it is considering "appropriate legal actions" and rejected any state interference in its pricing or operational practices.

Cosco leads the $5 billion investment in the port alongside Peruvian mining company Volcán and views the tariff intervention as a threat to its autonomy.

The dispute has deepened political divisions in Lima.

Some economists defend state intervention as essential to curb potential market dominance. Others argue that Indecopi's decision rests on outdated data and fails to reflect the complexity of Peru's current logistics landscape.

Megaport, polluted coast

Environmental tensions have added to the controversy.

In January, a Chancay-based citizens' group filed a criminal complaint accusing Cosco of polluting Chorrillos beach, adjacent to the construction site.

The group, Freddlich (Front for the Defense of Dignity and Freedom of Chancay), claims the installation of sand-filled "geotubes," meant to reduce coastal erosion, has severely disrupted the natural landscape.

Their lawyer, Ricardo Torres, told local media, "Those who pollute must repair the damage," and called for a criminal investigation.

Freddlich has also filed two legal challenges, not only against Cosco but also against the Peruvian state for failing to mitigate environmental harm.

The lawsuits accuse the Ministry of Transport, the Ministry of Environment and other agencies of neglecting their duties to protect coastal ecosystems.

Documents submitted in court cite a 2020 environmental review that warned of "severe impacts" on northern beaches. The group alleges that contractors used old tires to anchor the geotubes, which have since scattered along the shoreline, polluting the area and disrupting tourism and public access.

As local opposition mounts, critics of China's global infrastructure push have revived concerns over environmental degradation, monopoly control and Beijing's strategic ambitions.

The United States has also cautioned Peru about the long-term risks of handing critical infrastructure to firms backed by the Chinese government.

The port's opening in late 2024, attended by Chinese President Xi Jinping, marked a symbolic milestone in Sino-Peruvian relations. Less than a year later, that flagship investment has become a flashpoint, where commercial promise clashes with regulatory pressure and geopolitical scrutiny.