Basic Information

Chinese Name: 钱凯港
Location: Chancay, Huaral Province, Peru
Type of Project: Logistics and transportation, with industrial expansions
Project Developers: Cosco Shipping Ports Perú S.A., a joint venture between COSCO Shipping Ports and Volcan Compañía Minera S.A.A.
Main Contractor: Consorcio CHECSAC-CCCC4TH, a subsidiary of China Harbour Engineering Company Limited (CHEC) and China Communications Construction Company Limited (CCCC)
Financiers: Bank of China; Bank of Communications; China Minsheng Banking Corporation; and Shanghai Rural Commercial Bank.
Cost: 3 billion to 3.6 billion USD
Project Status: Stage 1 operational; stage 2 under construction

Project Outline

Designed to receive containerised, general, and rolling cargo, and accommodate the world’s largest container ships, the Chancay Multipurpose Port Terminal, when completed, is expected to cover 992 hectares and handle up to one million twenty-foot equivalent units (TEUs) annually. The project is being developed in two stages. The first stage received 1.3 billion USD to complete an operating zone with four berths (two for containers and two multipurpose), an administrative and logistics complex, and a 1.8-kilometre tunnel connecting the operating zone and the logistics complex. The second stage will complete the operating zone by building 11 more docks, for a total of 15 berths.

The project is under construction at the southern edge of the small city of Chancay, about 70 kilometres north of Lima, Peru’s capital. Chancay’s economy has historically been based on agriculture, fishing, and tourism. The city has access to an expanded road network that links its port to key distribution hubs, including Lima, and mining and agricultural regions in central Peru. The Chancay port aims to reduce congestion and logistics costs at Peru’s main port, the Lima–Callao hub, while establishing itself as a critical gateway to Asia and a global commercial hub for cargo redistribution. The facility is also expected to capitalise on new transport infrastructure projects that are under discussion or already under construction, many of them funded by Chinese investments, such as the planned Brazil–Peru Transcontinental Railway—a 3,000-kilometre route that would connect Puerto Santos in Brazil to Puerto de Ilo in Peru.

The Port of Chancay continues to expand its scope, adding new features not initially envisioned. One notable addition is the Chancay Park, which is designed to host a range of national and international export companies. The park is divided into six zones: logistics, industrial, commercial, residential, amenities, and green areas. Additionally, COSCO has recently lobbied the Peruvian Congress to establish a special economic zone (SEZ) in the area. In December 2022, a member of congress formally introduced a bill to create this SEZ. The bill was debated in congress in November 2024, with members discussing the size of the proposed SEZ as well as policies related to exemptions from income tax, but at the time of writing in December 2024 the matter remains unresolved. If approved as initially proposed, this will become one of the few SEZs in Peru and the first to be primarily managed by a foreign actor.

The idea of the Chancay port dates back to 2008, when a former Peruvian admiral began acquiring land and securing government permits. In 2011, he partnered with the Volcan Compañía Minera to establish Terminales Portuarios Chancay. Volcan is a Peruvian mining company that controls 12 mines and 13 hydroelectric plants, but, since 2017, Swiss multinational Glencore has owned 55 per cent of its shares. Initial work on the project—then much smaller in scope—began in 2016. After the admiral’s death in 2016, Volcan retained sole ownership. In January 2019, COSCO announced a partnership with Volcan during the World Economic Forum in Davos, committing to a 3 billion USD investment in the port. By May 2019, COSCO had acquired a 60 per cent majority stake in the project for 225 million USD, with Volcan retaining 40 per cent. This deal coincided with the signing of the Belt and Road Initiative Memorandum of Understanding between Peru and China.

While details of the project’s financing remain incomplete, the most recent syndicated loan of 975 million USD in March 2023 was provided by Chinese financial institutions, led by the Bank of China. Since 2021 the port has been under construction by Consorcio CHECSAC-CCCC4TH, a consortium of China Communications Construction Company and China Harbour Engineering Company. In November 2024, the port was inaugurated by Chinese President Xi Jinping during a visit to Peru for the Asia-Pacific Economic Cooperation Forum.

The Chancay Multipurpose Port Terminal is a fully private infrastructure and logistics project and the first fully private port in Peru, as the land, infrastructure, and administration are all privately managed. The administration of the port’s infrastructure is under a 30-year exclusive use lease with the possibility of extension, which allows the port developers to exclusively manage all essential port services.

State agencies such as the Ministry of Transport and Communications, the Ministry of Economy and Finance, and the National Port Authority have been very supportive of the development and have expressed high hopes. Both Peruvian and Chinese state officials claim that the Chancay port will enhance Peruvian citizens’ quality of life through modernisation, economic development, and employment opportunities. In the region, the port aims to become the key gateway between Asian and South American markets, redistributing cargo throughout the South American continent and making Peru and Huaral Province important regional logistics hubs. Crucially, as of November 2024, the Port of Chancay has not been authorised by the Peruvian state to handle loose minerals, as such cargo requires a stricter environmental impact assessment and compliance with environmental regulations. For this reason, it is expected that the main cargo from South America will be agricultural products.

The first shipment from the Chancay port in November 2024 was blueberries, while the first shipment from China in the same month carried equipment for the operation of the port such as spare parts for maintenance of smart vehicles and cranes. It is believed that further shipments arriving in the Chancay port have carried electric cars and machinery.

Project Impacts

• Employment and labour rights: The project promises to generate between 8,000 and 15,000 direct and indirect jobs, with some sources suggesting the potential for up to 50,000 jobs. However, the construction phase has faced serious labour issues. In 2024, two construction workers hired by unspecified subcontractors died while on duty. Construction workers have also reported mistreatment and unsafe working conditions, raising concerns about labour rights and safety standards.
• Environment: The construction of the port has caused significant environmental damage, particularly to marine ecosystems, resulting in a reduction in fish populations. Residents and environmental organisations warn that the project threatens the Santa Rosa Wetland, a critical conservation area and resting site for migratory birds.
• Land: Between 2013 and 2023, the area of direct influence of the project increased by 685 per cent, including the space directly occupied or used by the port and directly affected by port operations. A sharp increase in land prices has raised concerns among locals about the future of the city.
• Local community: While some residents remain optimistic about future job opportunities at the port, others face severe challenges. Construction activities have led to terrain collapses that damaged public roads and numerous homes. The port’s construction and operations are also disrupting fishing and tourism—key sources of livelihoods in the area. Opponents in the local community have reportedly faced harassment from developers, with community members accused of defamation and reported to the authorities.
• Fiscal impact: The project hopes to generate 4.5 billion USD annually. As the port is fully private, there are concerns from some government agencies about the loss of state control over the port infrastructure, the prices of services, and the management of tariffs.
• Governance: Numerous governance concerns have arisen regarding the approval and oversight of the project. These include improper allocation of land and sea areas previously designated for other uses, inadequate or bypassed environmental impact assessments, and the questionable approval of permits. These issues highlight gaps in regulatory enforcement and transparency.
• Logistics: The Chancay port is expected to become an important logistics hub within South America, redistributing shipments from and to the region. It will create a direct route between the Asia-Pacific and South America, limiting reliance on the ports of Manzanillo in Mexico and Long Beach in the United States, or even the Panama Canal. This promises to shorten shipping times between South America and the Asia-Pacific by 10 days while reducing the costs of transport by 20 per cent. The project also aims to reduce loads from the Callao Port Terminal, Peru’s main logistics hub.

The Chancay Multipurpose Port Terminal promises to generate between 8,000 and 15,000 direct and indirect jobs, though some sources claim the project could create up to 50,000 jobs. Being a ‘smart port’, many of its processes will be automated and thus will not require personnel, with COSCO suggesting it will require no more than 1,000 workers to operate. According to COSCO, by September 2024, construction work had created 1,500 jobs, while indirectly the port had already generated 7,500 roles in other services. COSCO and local authorities claim other jobs will include positions created through the industries attracted to the new port.

The port’s construction has been criticised locally for its unsafe working conditions and mistreatment of workers, with videos posted on social media of supervisors treating workers in a demeaning manner. Two construction workers died in work-related accidents in May and July 2024. In official statements, COSCO reported these workers were hired by subcontractors, and that the company had reached out to their families to offer support.

Local and national organisations have long expressed their concerns about the environmental impacts of the port’s construction. Artisanal fisher communities and associations first opposed the development due to its proximity to fishing areas but were contacted by the developers and offered compensation for the loss of livelihoods. According to a document prepared by the Huaral local government in August 2023, most fishing is done in the old Chancay port (within 1 kilometre of the new port) and at least 250 artisanal fisher families depend exclusively on fishing for their livelihoods. Compensation included lump sums of money and additional monthly payments towards higher education for their children. The amount of compensation varied between fisher associations. Fishers hoped their children would receive higher education that would allow them to access jobs in the port or in other industries attracted by its operations.

In 2020, several local groups and nongovernmental organisations (NGOs) collaborated to assess and provide feedback on the modified Environmental Impact Assessment (mEIA), which the involved companies presented to Peruvian authorities to gain permission for scaling up the project. These opposition groups particularly highlighted the negative impacts on the local environment and residents’ health.

Of significant concern for people and wildlife are the increased noise and pollution due to the port operations, including the emission of toxic PM10 and PM2.5 particulate matter from increased large-vehicle traffic. The effects of construction on the seascape and marine resources are also of concern, as the docks and breakwaters are disrupting marine currents and changing the coastline, and the excavation of soil and ship traffic will disrupt fish breeding sites. These changes in the coastline and fishing stocks are predominantly affecting the tourism and fishing industries, which are key sources of livelihoods for many in the city. The environmental issues described particularly affect the neighbouring Santa Rosa Wetland, a conservation area and resting site for migratory birds very close to the port site. Government authorities and civil society groups submitted 114 observations about the project’s mEIA, but the document was approved by the designated authority even though some observations were left unresolved.

COSCO and Volcan claim they have set up several environmental and social programs in the area to support conservation and local development, including an animal rescue office and protection of the wetland. However, local environmental groups remain concerned, claiming these efforts are not enough to offset the damage that has already been done and the ongoing effects of the port’s operations.

In 2013, the area of direct influence was estimated to be 3.3 square kilometres, according to official documents presented to the National Environmental Certification Service (Senace). The measure of the ‘area of direct influence’ is an estimation by Senace of both the space directly occupied or used by the port and the area directly affected by port operations. By 2023, the area of direct influence was registered as 25.9 square kilometres—an increase of 685 per cent. The developers claim that this increase is due to additions to the infrastructure and the ‘more demanding criteria for identifying environmental impacts’ introduced by Senace in 2016. Along with this increased area of influence, the port’s construction has led to a rise in land values around the site. Media articles mention that prices per square metre have gone up by almost 1,650 per cent in areas near the port, driving a change in land use from agriculture to industry as farmers sell their land due to the increased returns compared with agriculture.

Many residents of Chancay and the authorities are optimistic about the development of the port, as it is creating interest in the city, positioning Chancay as an important logistics hub, and promising increased investment and industrial development. This brings hopes that the port will contribute to job creation, increasing incomes, and facilitating access to services in the area.

However, many groups in the community have protested the construction of the port since the beginning, which has led to significant conflict with the developers. The construction of the tunnel connecting the operating zone and the logistics complex is being carried out under El Cascajo hill, which is home to several families. The construction work has involved the use of explosives directly underneath people’s homes, causing continuous disturbance by noise, dust, and damage from the vibrations. Although the developers have offered compensation for damage, residents claim this has been insufficient to cover the costs of repairing ruptured waterpipes and structural damage to walls and floors. During construction work, several public roads have collapsed, and houses have been rendered uninhabitable. Opposition groups have faced harassment from the developers, with opposition leaders reported to the police for defamation for claiming that the Chancay port would transport minerals, and one local journalist was arrested for defamation related to criticising the port’s operations.

The Ministry of Production estimates that when the port and logistics project is fully operational (after 2032), it will contribute an annual income of 450 billion USD—1.8 per cent of Peru’s gross domestic product (GDP). According to the Central Reserve Bank of Peru’s estimate, the port will contribute 0.9 per cent of Peruvian GDP in 2025.

As the first fully private port in Peru, Chancay is raising novel regulatory challenges for Peruvian state agencies, including oversight of operations, handling grievances, and tariff management, as existing regulatory frameworks are not fully equipped to address the complexities of privately operated infrastructure on this scale.

Since the initial proposal, the project has faced governance concerns. The marine area allocated for the port’s operations was originally designated for national defence. This designation was later altered to allow for private use—in this case, port development—which was a rare and irregular decision. Similarly, the land now incorporated into the project was initially public property. It was sold through several transfers to the Chancay project at exceptionally low prices, ranging from 0.86 to 4.88 USD per square metre.

The Chancay Multipurpose Port Terminal is classified as a private port for public use, with exclusivity in the provision of essential services within the port. This means that while the port infrastructure is privately owned, it will serve various clients, and essential services can only be provided by the port owner. The Peruvian National Port Authority granted this exclusivity in 2021, despite lacking the legal authority to do so. In 2024, disputes over this designation escalated among state agencies, prompting congress to pass Law 32048, which amended the Peruvian National Port System Law to automatically grant exclusivity for essential services to private port infrastructure. COSCO played a direct role in lobbying and participated in discussions about the formulation of Law 32048 alongside other public and private actors.

In 2024, COSCO resisted oversight and inspections by Organismo Supervisor de la Inversión en Infraestructura de Transporte de Uso Público (OSITRAN, or the Supervisory Body for Investment in Public Use Transport Infrastructure), the Peruvian state agency which regulates, supervises, and inspects concession transport infrastructure for public use. The developers argue that because the port is entirely privately owned and managed, it does not constitute a state concession and should therefore not fall under OSITRAN’s jurisdiction. Conversely, OSITRAN and the Peruvian Executive branch maintain that since the infrastructure will be used for public purposes, it must adhere to the same regulatory framework as all other public-use ports in the country.

The port is set to start mobilising 1 million TEUs annually, rising to a yearly level of 3.5 million TEUs once it is fully operational. In its first phase, the Chancay port is projected to handle up to 40 per cent of the national cargo destined for the Asia-Pacific region. The Chancay port aims to reduce logistical reliance on the Port of Callao, Peru’s main logistics hub, close to the capital city of Lima, by managing large loads and providing cheaper services. Within the Americas, the Chancay port will compete with the Port of Manzanillo in Mexico and Long Beach in the United States.

US officials and analysts have expressed security concerns, including the possibility that the Chancay port could be used strategically by the Chinese Navy, as the port is seen to pose a risk of upsetting US hegemony in Latin America. However, diplomatic and commercial relationships between Peru and China, and between China and other Latin American countries, are not new. The Free Trade Agreement between Peru and China took effect in March 2010. Most of Peru’s exports have been destined for China for some time now, with China displacing the United States as the main importer from Peru in 2014 and almost doubling the amount of Peruvian goods imported by the United States in 2024. Chinese companies have had control over several investments throughout Peru, from mining to hydroelectric power, for many years. It seems that the policy changes and practices that are paving the way for the Chancay port stem from a broader move by the Peruvian Government to attract and facilitate private investment in the country, which also benefits investors from other countries.

In-Depth Sources

Media articles

• Cervilla, Joanna. 2024. ‘Megapuerto de Chancay: Oportunidades y desafíos de una obra que transformará el comercio regional y la economía peruana [Chancay Megaport: Opportunities and Challenges of a Project That Will Transform Regional Trade and the Peruvian Economy].’ PuntoEdu, [Pontifical Catholic University of Peru], 11 November. Link.
• Chávez Yacila, Rosa, Gianfranco Huamán, and Luz Alarcón. 2024. ‘Megapuerto de Chancay: la historia detrás de la expansión del hub comercial en Perú [Chancay Megaport: The Story behind the Expansion of the Commercial Hub in Peru].’ Ojo Público [Public Eye], 8 September. Link.
• Escobar la Cruz, Ramiro. 2024. ‘Los silencios de Chancay, el mayor puerto comercial de Sudamérica que se levanta en Perú [The Silences of Chancay, the Largest Commercial Port in South America That Is Being Built in Peru].’ El País [The Country], [Madrid], 28 July. Link.

Academic Articles

• Apostolopoulou, Elia, and Alejandra Pizarro. 2024. ‘Contesting the Anticipated Infrastructural City: A Grounded Analysis of Silk Road Urbanization in the Multipurpose Port Terminal in Chancay, Peru.’ Annals of the American Association of Geographers. Link.
• Maúrtua de Romaña, Oscar. 2024. ‘Análisis geoeconómico del Puerto Hub de Chancay: desafíos y oportunidades [Geo-Economic Analysis of the Chancay Hub Port: Challenges and Opportunities].’ Revista Peruana de Derecho Internacional [Peruvian Journal of International Law] 177: 25–58. Link.

Reports

• Narrea, Oscar. 2022. Sharing Chinese and Peruvian Visions about the Future Chancay Port: Exploring Opportunities Under the Belt and Road. Lima: Center for China and Asia-Pacific Studies, Universidad del Pacifico. Link.
• Sociedad Peruana de Derecho Ambiental (SPDA) [Peruvian Society of Environmental Law]. 2023. Megapuerto de Chancay: Análisis legal ambiental [Chancay Megaport: Environmental Legal Analysis]. Lima: SPDA. Link.

The initial research for this profile was done in collaboration with Dr Elia Apostolopoulou, Senior Lecturer at Imperial College London.