PANAMA CITY, Panama (AP) — In news that should draw concern from executives at the Port of Gulfport and other ports on the Gulf and east coast, the consortium at the heart of a historic Panama Canal expansion project is threatening to suspend work due to financial problems caused by a $1.6 billion cost overrun.
The group issued a statement giving the Panama Canal Authority 21 days to settle the dispute, arguing that the Authority is responsible for covering the added costs, but said it will continue working in the meantime.
Canal Administrator Jorge L. Quijano responded with his own communique saying the Authority will continue to demand the companies “respect the contract that they themselves accept and signed.” He said the purpose of the consortium’s warning was “to force the organization to negotiate outside the terms established in the contract.”
Grupo Unidos por el Canal is formed by Spain’s Sacyr Vallehermoso, Impregilo of Italy, Jan De Nul of Belgium and Constructora Urbana SA of Panama. It won the contract to design and build a third set of locks with a $3.2 billion bid in 2009.
Panama has estimated the full expansion program will cost $5.2 billion, with the new, wider locks allowing the 50-mile (80-kilometer) canal to handle ships far larger than those that can now navigate the century-old waterway.
Officials now say the work should be finished by June 2015. Officials say the overall expansion work is 72 percent finished, with the locks themselves at 65 percent.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info