Spanish builders Sacyr may abandon Panama Canal project

Panama Canal

Ricardo Martinelli, the president of Panama, has accused the consortium responsible for expansion works on the Panama Canal of great irresponsibility and endangering the project.

The consortium, known as ‘Grupos Unidos por el Canal’ is made up of Sacyr from Spain, Impregilo Spa from Italy, Jan de Nul from Belgium and Constructora Urbana from Panama. Ricardo Martinelli is planning to visit Europe to put pressure on the companies to complete the contract to expand the Canal.

The dispute is around extra costs which have arisen; the original quote was for 3.2 billion dollars, and there is now said to be a shortfall of a further 1.6 billion dollars. The consortium believes that Panama should pay this amount, they have given them 21 days to respond to the demands in which time they will continue to work. They plan to suspend work of their requirements are not met.

The completion date is currently estimated at mid 2015, although originally it was due in October 2014.

The Panama Canal Authority (PCA) disagrees and has hinted that they could find another company to finish the work.  Panama’s President expects the Spanish and Italian leaders, who had originally made commitments to him in 2009, to persuade the businesses to continue with the project. He believes that the companies should not have put in such a low quote, as this has caused the shortfall, therefore he feels that the consortium should cover the costs.

The consortium feel that the PCA had not given them exactly the correct information in the first place, making an exact quote impossible. Also they say that many of the delays have been caused by unforeseen events during construction.

Sacyr won the contract in 2009 with a bid far lower than than its rivals at 3.12 billion dollars, this was also far lower than the PCA’s own reference of 3.48 billion dollars.  Sacyr’s shares dropped by nine per cent a few hours after the dispute between the consortium and the PCA was announced.

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