Panama Canal expansion contractors threaten strike action amid pay row

  • Consortium demands US$1.6 billion in back payments

The Spanish-led consortium assigned to the multi-billion dollar Panama Expansion project has threatened to suspend work unless a row over the responsibility of cost overruns is resolved.

According to Euro News, the consortium, known as Grupo Unidos del Canal SA (GUPCSA) comprising of Sacyr Vallehermoso, Impregilo, Jan De Nul and Panama’s Constructora Urbana, claim that as much as $1.6 billion is owed in back payments. It has warned the Panama Canal Authority (ACP) that it will halt construction works within three weeks if payment demands are not met.

The expansion of the 77-kilometre waterway, which will enable the safe transit of vessels with a capacity of up to 12,000 TEU, is already nine months behind schedule and is now expected to be completed in June 2015. GUPCSA is responsible for the Canal’s new locks, the main component of the overall Expansion Program.

In response to the potential suspension of work, Panama Canal Administrator Jorge Quijano has accused the group of attempting to force the ACP to renegotiate outside the terms of the contract it has already signed.

“For the Panama Canal it is of utmost importance that the Expansion Program is completed to better serve the international maritime community and its customers,” said Quijano.

“No matter what type of pressure is exercised against the ACP, we maintain our request that GUPCSA respects the contract that they accepted and signed.”

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