Panama wants Sacyr to give canal lock-gate guarantees

As the ongoing dispute between the Panama Canal Authority (PCA) and the consortium led by Spanish builder Sacyr over cost overruns drags on, the PCA has asked for guarantees about the delivery of key components in the project to widen the canal.

So far only four of 16 lock-gates, each of which weighs over 3,000 metric tons and are 58 meters across, 30 meters high and 10 meters wide, have been delivered. Four more should have arrived at the end of last year, but failed to do so because of transport problems and remain in Italy with the Italian company, Cimolai, contracted to build them by the Sacyr-led GUPC consortium.

The latest proposal by the PCA to resolve the deadlock over who foots the bill of the cost overruns put forward over the weekend establishes specific dates for the delivery of the lock-gates, the first four of which arrived last summer, delivered by a semisubmersible ship after a month-long voyage. The consortium told the PCA at the time that it was having problems with the owner of the vessel used to transport the first four gates and that it was looking for an alternative. There are not too many vessels in the world capable of carrying out what is a very special delivery.

The lock-gates took up a considerable part of the contract worth 3.2 billion dollars (2.4 billion euros) awarded to GUPC in 2009 to widen the canal. The lock-gates, valves and electromechanical system that accompany them will take up 1.1 billion euros of the total contract. Eight of the gate will be at the Atlantic end of the waterway and the other eight at the Pacific end.

Work on the project has been frozen since last week when the PCA and the consortium abandoned formal negotiations on estimated cost overruns of 1.6 billion dollars (1.2 billion euros).