The consortium responsible for the main Panama Canal expansion project is the subject of a criminal complaint in the Central American country for allegedly inflating its cost overrun claims.
National Bar Association Vice President Juan Carlos Arauz filed the complaint, to which EFE gained access, on Thursday with Panama’s Attorney General’s Office.
“We’re asking for an investigation into the possible defrauding of the nation’s resources” through the presentation of “unjustified” economic claims by the GUPC consortium, led by Spanish construction company Sacyr Vallehermoso, the attorney told EFE Friday.
Under the $3.1 billion contract for the construction of a third set of locks, signed in 2009 by the Panama Canal Authority, or ACP, and the GUPC, the International Chamber of Commerce’s arbitral body is the venue of last resort for resolving contractual disputes.
The complaint said there was still a possibility that the ICC’s International Court of Arbitration could rule in favor of the consortium, which is seeking additional payments of up to $3.5 billion for cost overruns, and cause “serious harm to the Panamanian state.”
The GUPC in turn accuses the ACP of seeking to pay an amount far below the real value of its extraordinary costs.
The expanded Panama Canal – which will be able to handle larger ships and up to 600 million tons of cargo annually, double its current capacity – is to be inaugurated “around May,” President Juan Carlos Varela said last week. EFE
I don’t know who is responsible for the cost over runs on the canal project. But in my 44 years of involvement in major industrial projects, almost all over runs are due to faulty engineering and/or impossible expectations of the owner that have to be ‘fixed’ by the contractor. These fixes are categorized as cost over runs to make it sound like the contractor is at fault. But in fact the extra costs are just the cost of doing the work properly.