Canadian Shipper


Panama Canal expansion contractors threaten strike in pay dispute

PANAMA CITY, Pan.–ASpanish-led consortium working on a giant project to expand the Panama Canal is threatening to suspend the operation if its demands for payment are not met.

The consortium warned the Panama Canal Authority that work will stop in three weeks’ time due to dispute over who is responsible for cost overruns, said a report. The consortium, led by Spain’s Sacyr Vallehermoso, and which includes Impregilo of Italy, Belgian firm Jan De Nul and Panama’s Constructora Urbana-is claiming $1.6 billion (1.16 billion euros).

The project – to build new locks to accommodate larger ships of up to 12,000 containers instead of the current 5,000 – is nine months behind schedule and is now due for completion in June 2015, said the report.

Shortly after work began in 2009, there was a four-month delay as the authority considered the cement the consortium was using to be of poor quality. The canal’s administrator Jorge Quijano has accused the group of trying to force it to renegotiate outside the terms of the contract.

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