THE Government is in talks with Panama and Spanish builder Sacyr to try to resolve a row over a $1.6 billion cost overrun on expansion work on the Panama Canal.
A consortium led by Sacyr has threatened to suspend work on expansion of the canal, which handles 5% of world maritime trade, if the Panama Canal Authority fails to pay for the extra costs.
Panama’s President Ricardo Martinelli warned he would visit Europe to force the consortium — which includes Italy’s Salini Impregilo, Belgium’s Jan De Nul and Panama’s Constructora Urbana as well as Sacyr — to honour its contract to expand the canal.
In a letter to canal authorities dated December 30, Sacyr gave a 21-day deadline before suspending its $3.2 billion contract to expand the capacity of the canal, notably by installing a third set of canal locks.
Sacyr made the contents of the letter public on Thursday in a statement to Spanish market regulators.
The project aims to make the 80-kilometre (50-mile) waterway, which handles five per cent of global maritime trade, big enough to handle new, mega cargo ships that carry 12,000 containers.
And we should never underestimate the links with the development of Algeciras, already the third largest trans-shipment port in Europe, the improved goods rail link up the valley in Ronda (not yet built) to the planned depot in Bobadilla / Antequera. It is all part of the long term plan, driven by China. Current Panamax ships can take 5,000 TEUs. The new ones will take 13,000. That is a lot of goods to distribute at this end.
Nobody seems to be asking why there is a $1.6bn overspend on a budget of $3.2bn? That’s 50% over budget!