The standoff between the Panama Canal Authority (ACP) and the international consortium building the third set of locks for a new route through the waterway continued into its second week on Wednesday.
Grupo Unidos por el Canal (GUPC), which is led by Spanish construction firm Sacyr, issued a statement early Wednesday saying it would provide $100 million to keep construction going if the ACP advances it $400 million. The ACP earlier that day had proposed a $100-million advance with repayment backed by a letter of credit and a two-month postponement of an $83-million advance now due on the condition that GUPC put in $100 million to pay subcontractors and suppliers, and ends its threat to shut down work Jan. 19 due to the $1.6 billion in cost overruns it says were not its fault.
On Wednesday, the ACP rejected a new proposal by GUPC's Italian partner, Salini Impregilo, that the agency should pay $1 billion to keep the project going, according to Reuters
and other news outlets.
The $1 billion payment "is impossible. It is outside the contract," ACP Administrator Jorge Quijano told reporters in Panama City. He repeated previous statements that the ACP is prepared to hire another engineering group to finish the expansion project if no compromise can be found.
characterized the Impregilo offer as a sign of a split within the consortium by a team member that wants to take a tougher negotiating position.
But a spokesperson for Salini Impregilo issued a statement, saying "the proposals quoted in yesterday's statement are those made by GUPC and communicated officially to ACP on Dec. 27. Said proposals, which have so far remained unanswered represent the common and unanimous position of all members of the consortium."
The ACP so far has paid about $2 billion for the lock construction under the $3.2 billion fixed-price contract, plus another $150 million to $160 million for price escalation of materials. The full expansion of the Panama Canal, which includes dredging the Atlantic and Pacific entrances to the waterway and other major improvements, was originally projected to cost $5.2 billion. The cost could go up significantly if there are more delays or the contractor doesn't swallow the expenses on its own, officials said.
The two sides have agreed to arbitration to resolve their differences, GUPC said. It added that the APC should expedite its claims process.