Caribbean & Central America - March 2014 (ISSN 1741-4458

Deal reached over Panama expansion project: Late last month the Panama Canal authority (ACP) announced an “agreement in principle” with the international consortium, Grupo Unidos por el Canal (GUPC), as to who should foot the bill for the US$1.6bn cost over-run of the US$5.3bn Panama Canal expansion project [RC-14-01] – a dispute which saw works grind to a halt last month. Even with the deal, the completion date of the expansion project has already been pushed back by a further six months to December 2015.

According to a 27 February press release by the ACP, the agreement with GUPC (which includes Spain’s Sacyr Vallehermoso, Italy’s Impreglio, Belgium’s Jan de Nul and Panama’s Constructora Urbana) stipulates that: “the construction of the third set of locks is completed by December 2015; the 12 lock gates in Italy must be in Panama by December 2014, to be transported in staggered shipments; The performance bond for US$400 million may only be released to Zurich North America, to obtain financing to complete the work; GUPC will pay US$100 million and ACP will advance US$100 million, which will enable works to regain a normal pace in March; The moratorium for the repayment of advances may be extended until 2018, subject to fulfilment of certain milestones and other conditions”.