PRESS RELEASE FROM PANAMA PORTS COMPANY, S.A. (PPC)

  
Panama Ports Company, S.A. ("PPC"), operator of the port terminals of Balboa and Cristobal pursuant the concession contract approved by Law 5 of January 16, 1997, and its respective addenda, hereby responds to the recent statements regarding our company and concession:
 

• In 2005, PPC and the State voluntarily entered into an addendum to the concession contract, which was in accordance with all applicable legal requirements and approved by Law 55 of 2005. Under this addendum, PPC committed to invest more than $1,000 million balboas and to make an additional payment of $102 million balboas for the infrastructures it had inherited when it assumed the concession of the ports of Balboa and Cristóbal in 1997. This agreement reflected a strong commitment from the company and allowed all port operators in Panama to compete on a level playing field, as they do today.
• PPC has made significant investments that exceed $1,695 million balboas, surpassing not only the $50 million investment required under the original concession contract, but also the $1,000 million agreed under the addendum, as confirmed by the Comptroller General of the Republic in 2020 after a thorough audit process that lasted approximately 4 months.
• Therefore, any statement regarding what PPC should have paid under the concession contract entered into in 1997 must take into account the respective addenda, validly executed and approved by law. To express the opposite, as it unfortunately has been the case, not only distorts the reality of the existing legal relationship between PPC and the State under the concession contract and its addenda, but also contradicts the State's own acts over the years. To maintain, therefore, that PPC has failed to pay approximately $1,200 million balboas to the Panamanian State, is absolutely contrary to reality.
• PPC is the only port company in Panama in which the State is a shareholder, with a 10% stake. Over the last 28 years, PPC has paid the Panamanian State the sum of $126 million balboas in dividends. Consequently, the State receives these dividend payments only from PPC and not from the other port operators.
• All the tax exemptions granted to PPC under the concession contract, which was approved by Law 5 of January 16, 1997 and its respective addenda, are precisely the same tax exemptions granted to all other port operators in Panama.
• The Office of the Comptroller General of the Republic, in its 2020 audit report, concluded that PPC is in substantial compliance with the clauses and obligations of the concession contract.  Also, the Panama Maritime Authority certified in 2021 that PPC is in compliance with its obligations under the concession contract. Additionally, the PPC extension of the concession contract is valid, in force, and compliant with all legal requirements.
• During the term of the concession, PPC has paid the State $668 million of balboas, far exceeding the contributions of any other port operator in Panama.
• According to the Comptroller General of the Republic, PPC has contributed an amount of more than $5,900 million balboas to the national economy, through added value, indirect effects, payments to the State and investments made.
• The contracting of service providers has represented significant savings to PPC during the last 10 years.
• PPC has complied with the payments for container movement that the Panama Maritime Authority has required, at the same rate applicable to all port operators.  At no time has PPC failed to comply with the payments corresponding to the rates applicable to port operators in Panama for the movement of containers.

We firmly believe that respect for legal certainty gives companies and investors the certainty that Panama is a safe country in which to invest. Our philosophy of "Ports made by Panamanians" reflects our continuous commitment to the country and its people, being an essential engine within the dynamic national economy and the maritime port sector. Our track record of more than 28 years is proof of the positive impact we have generated, by building world-class ports, creating more than 25,000 direct and indirect jobs and contributing billions of balboas to the Panamanian economy. PPC continues to call for respectful coordination and consultation to protect the concession that has provided high-quality services for the benefit of Panama and the world.



Notes:

• 1 Panamanian Balboa = approximately 1.00 USD
• Translated from Spanish. The Spanish version shall prevail in case of any discrepancy or inconsistency between the Spanish version and its English translation.