The consortium contracted to widen the Panama Canal said Thursday it had given itself until February 1 to find a solution to its dispute with the Panama Canal Authority (PCA) over cost overruns in order to allow the project to be completed on schedule.
The Grupo Unidos por el Canal (GUPC) led by Spanish builder Sacyr said Thursday it and the PCA had agreed on a “protocol” for the negotiations “as a first step toward an integral agreement in order to finish the project.”
The consortium estimates the cost overruns at 1.2 billion euros. The Dispute Adjudication Board (DAB) mediation panel set up to help resolve such conflicts by the PCA has said if the contract with the Sacyr group is broken, the work would not be completed until between 2018 and 2020 rather than 2015 as scheduled.
It said the protocol includes a proposal for co-financing of the rest of the project with the PCA that would also involve the insurer Zurich, which has offered to convert guarantees worth some 440 million euros into a loan to the consortium to help ensure there is sufficient liquidity to finish the work.
GUCP wants the PCA to drop its demands for some 780 million dollars in advance payments for the work to be returned. The authority has already paid 2.048 billion dollars of the total bid amount of 3.3 billion.