Panama Canal upgrade could come in over-budget

GMT 00:02 2014 Friday ,17 October

Arab Today, arab today Panama Canal upgrade could come in over-budget

The Panama Canal Miraflores
Panama City - AFP

Construction to expand the Panama Canal could stretch beyond the $5.25-billion budget, an official said Thursday, after a dispute over cost overruns delayed the project earlier this year.
Lawsuits around the budget excesses could make the total bill to the Panamanian government come in higher than projected, said the waterway's administrator, Jorge Quijano.
"We're still within the budget of $5.25 billion, but if there were a verdict against us we would definitely go over," he told journalists.
Panama has had a rocky relationship with the consortium carrying out the upgrade to the canal's locks, Grupo Unidos por el Canal (GUPC), which is headed by Spanish construction firm Sacyr.
The expansion, aimed at modernizing the canal to accomodate mega-ships carrying up to 14,000 containers -- triple the current capacity -- was launched in 2008 and is currently running a year behind schedule.
Officials say it is 80 percent complete and set to be finished in late 2015 or early 2016.
GUPC has filed a series of lawsuits seeking a total of $1.6 billion in damages, which it said is the value of the cost overruns.
The dispute ground construction to a halt for two weeks in February.
Quijano said the canal, which celebrated its 100th birthday in August, had a "contingency level" set aside to enable it to pay some of the damages in case of a court ruling against Panama.


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