Panama Canal Expansion to Resume Following Cost Dispute Compromise
The construction of a third set of locks at the Panama Canal will resume on Feb. 20 after the Panama Canal Authority (ACP) and the contractor commissioned to complete the expansion project brokered a compromise in a cost overrun dispute, said the ACP in a Feb. 19 statement. After construction resumes, ACP said it will pay the contractor, Grupo Unidos por el Canal, S.A. (GUPC), nearly $40 million related to December payments and obligations. GUPC originally demanded a $1.6 billion cost overrun payment, prompting threats in December to discontinue construction (see 14010810).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
“Additionally, the parties agree to discuss in the next 72 hours other points such as the dates for the delivery of the gates, an implementation schedule for the remainder of the works, a timetable of repayment moratorium and other key aspects for the project’s development,” said ACP. “The decision was made today during telephone conversations between the ACP and the CEOs of the companies in the consortium, but there are still some issues on which an agreement has not been reached.”
GUPC is led by the Spanish building firm Sacyr of Spain, and also includes Salini-Impregilo of Italy, Jan De Nul of Belgium and Constructora Urbana, SA of Panama. The GUPC is “ready to recommence” construction on the third set of locks, but there remain unresolved areas, said GUPC in a Feb. 20 statement. “The dialogue between the parties has been ongoing and GUPC continued to advance comments and proposals almost daily, leading to the latest agreement on Wednesday,” said GUPC. GUPC says it is continuing negotiations "for a comprehensive agreement that follows the applicable contract and laws, and provides funding aimed at completion of the project.”