Panama Canal client, consortium agree new deal
Variation deal will co-finance completion of canal widening project
The consortium building the Panama Canal has announced that it has finally agreed a variation to its contract with client ACP which will allow for the third set of locks to be completed on the multi-billion dollar project.
Work stopped on the site in January this year when the consortium working on the $3.1bn project were told by the Panama Canal Authority (ACP) that it would not meet cost overruns of $1.69bn on the project, which started in 2009 and is set for completion in June 2015.
The consortium building the project, Grupo Unidos Per El Canal (GUPC), then downed tools on the project. The consortium, which is led by Spanish construction firm Sacyr and Italian construction giant Salini Impregilo, then gained intervention from the European Commission.
An initial memorandum of understanding between the two sides was signed in March this year, but GUPC said that the signing of a variation in the contract, which would see both sides co-finance completion works, was a "key factor to successfully complete the project according to the timeframe provided".
"GUPC appreciates all the efforts made by the ACP and extends a warm recognition to the workers of the consortium for its patience and loyalty. Without them nothing could have been done," the consortium said in a statement.
"GUPC reinforces its commitment to keep meeting the objective of providing a high class service to the ACP, to the people of Panama and to the world trade community in order to complete one of the most complex and fascinating infrastructure from all times: the third set of Locks of the Panama Canal."
Once complete, the projects will allow for new, much larger container vessels to pass through the canal. It is estimated that this could bring revenues for using the waterway to more than $1bn per year.