The consortium building the new locks at the Panama Canal resumed work on the project on Thursday after a two-week suspension in a dispute over $1.6 billion in cost overruns. The Grupo Unidos por el Canal agreed to restart the project after it reached agreement with the Panama Canal Authority, which said it will pay the consortium $36.8 million today.
This amount does not represent a settlement of the dispute over cost overruns, but is the amount due to GUPC for December invoices. The canal authority said the preliminary agreement to resume work “does not imply a negotiation on the alleged cost overruns claimed by the contractor.” It reiterated that these claims must be processed through the three-step process laid out in its contract with GUPC.
“Works have restarted this afternoon,” Panama Canal Administrator Jorge L. Quijano said late yesterday. “The consortium has guaranteed that it will continue working, which was our main objective so we can move forward and discuss other issues for a longer-term agreement.”
The canal authority said it will continue negotiations with GUPC over the weekend to reach an agreement “that ensures the successful completion of the project.” It did not say when the project would be completed. After two previous delays caused by technical problems, the canal authority had said it would complete the project in the fourth quarter of 2015.
GUPC, which is made up of the engineering firms of Sacyr Vallehermoso of Spain, Impregilo of Italy, the Jan de Nul Group of Belgium and Constructora Urbana of Panama, stopped working on the locks on Feb. 5.