Reported irregularities in the awarding of a contract to build a fourth bridge over the Panama Canal could potentially delay the start of construction and may have wider implications.

The alleged irregularities were uncovered in a probe conducted by members of the national assembly’s public infrastructure committee.

Legislator Roberto Ábrego (pictured, second from right), head of the sub-committee that was created to carry out the investigation, briefed the committee on some of the preliminary findings of the probe on Tuesday.

The reported irregularities include the awarding of the contract to consortium Panamá Cuarto Puente even though the score it obtained in the technical evaluation was considered relatively low and its bid of US$327mn was higher than the one from its closest contender, according to local press reports.

A detailed report of the investigation is scheduled to be submitted to the committee on October 8.

Potential implications

Ábrego said the alleged irregularities could end up requiring a significantly larger investment for the project than originally estimated, which could in turn hurt public finances.

According to the lawmaker, the findings of the investigation show that the awarding of the contract did not comply with existing regulations and the process could have been conducted in a way that sought to benefit the least qualified tender participant.

The sub-committee’s report will include some recommendations on how to proceed regarding the alleged irregularities. These recommendations will then be analyzed by the rest of the members of the legislative commission, lawmaker Kayra Harding, chair of the committee, told reporters following Ábrego’s briefing.

Although the lawmakers did not say whether they could try to get the contract revoked, Ábrego did say the sub-committee would seek to defend the national interest.

Troubled history

Panamá Cuarto Puente, comprised of China Communications Construction Company and China Harbour Engineering Company, was awarded the US$1.5bn contract for the design and construction of the bridge in July last year during the term of then-president Juan Carlos Varela.

According to the contract, work must be completed 54 months from the date the consortium was notified of a decree to proceed. The decree was signed by former public works minister Ramón Arosemena and submitted to the consortium in December, meaning the deadline for completion is mid-2023.

Since the plans for the original financing structure of the project fell apart, the current national government is still exploring different alternatives to reformulate the financing plan and obtain the necessary investment funds.

In mid-September, consortium representatives said at a public event that the group was still working on the design phase of the project. Construction works could begin in early 2020 in order for the project to be completed by mid-2023, they said.

Meanwhile, José Alejandro Rojas, advising minister for private investments, told local outlet TVN Noticias that although the financing model for the program has yet to be defined, the construction of the bridge will definitely happen.

“We will find the necessary money to build it, with the public works ministry already working on this,” Rojas said.

The decision to conduct a probe into the project was made in late August following a meeting between lawmakers and consortium representatives.

At the time, the legislators denied that their intention was to cancel the contract and said that their only motivation was to verify that the project would comply with regulations.

The 1km bridge will be built north of the Bridge of the Americas and help alleviate congestion there. It will be a continuation of the Corredor Norte highway to Panamá Oeste province, connecting with the Pan-American highway, which also crosses the Canal, allowing users to travel from the Tocumen area to the region west of the canal without having to go through Panama City. It is expected to be used by 70,000 vehicles a day and will benefit 1.7mn people.

The cable-stayed toll bridge will have eight lanes, six for vehicles and two central ones for the future metro line No. 3. There will also be two emergency lanes.

Two interchanges will be built at each end of the Canal. The bridge is designed to have a lifespan of 100 years.