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.

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2 COMMENTS

  1. 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.

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