{"id":16722,"date":"2016-05-30T11:23:43","date_gmt":"2016-05-30T16:23:43","guid":{"rendered":"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/?p=16722"},"modified":"2016-05-30T11:23:43","modified_gmt":"2016-05-30T16:23:43","slug":"new-panama-canal-set-to-open-but-builder-unsure-how-much-it-will-earn","status":"publish","type":"post","link":"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/new-panama-canal-set-to-open-but-builder-unsure-how-much-it-will-earn\/","title":{"rendered":"New Panama Canal set to open, but builder unsure how much it will earn"},"content":{"rendered":"

\"cocli<\/a><\/p>\n

The Spanish-led consortium working on the expansion of the Panama Canal is planning to hand over the completed project on May 31, after suffering major delays and cost overruns.<\/p>\n

But the Grupo Unidos por el Canal (GUPC) consortium, which is headed by Spanish company Sacyr, still does not now how much money it will receive for what it terms \u201cthe biggest engineering project in the world.\u201d<\/p>\n

<\/div>\n

That is because a legal battle is still underway to decide the price of the construction work. Depending on what a Miami arbitration court decides, the project could mean losses for the builders.<\/p>\n

Consortium leaders told a group of Spanish journalists in Panama that \u201cit is going to be very difficult for this project to make money.\u201d<\/p>\n

The expansion of the century-old waterway was awarded to GUPC in 2009. The project had an initial budget of $3.2 billion (around \u20ac2.85 billion), but Sacyr says that the costs have spiked to \u20ac5.58 billion, triggering company demands for more money from Panama Canal authorities.<\/p>\n

So far, the contractors \u2013 which also include Belgian, Italian and Panamanian companies- have managed to get an additional $460 million provisionally recognized as due, although Spanish sources said they expected to ultimately receive around 50% of their cost overruns.<\/p>\n

This excess expenditure was caused by the quality of the basalt, unexpected problems with the terrain, worker strikes and regulatory changes. The consortium has claimed that the Panamanian authorities provided them with inaccurate geological studies that downplayed he real building difficulties.<\/p>\n

Sacyr chief Manuel Manrique said he is convinced that GUPC and the government of Panama will reach a reasonable agreement, and underscored that the expansion of the waterway has been \u201ca success story.\u201d<\/p>\n

\u201cWe are working to initiate a process, and when ships start to transit through the new canal it will be easier to negotiate a happy ending,\u201d said Manrique at a press conference.<\/p>\n

Manrique also said that the agreement did not have to be exclusively financial, and that other types of compensation could be sought. The chairman of Sacyr would not advance a date for the completion of this deal.<\/p>\n

Also present at the conference was Carlos Espinosa de los Monteros, the High Commissioner for the Spain Brand, who underscored the project\u2019s importance as a way to showcase the ability and technology of Spanish construction firms in the world.<\/p>\n

Over 100 vessels have already booked dates to make the crossing between the Atlantic and the Pacific between now and September.<\/p>\n

The Spanish representative said that the real significance of the project resides in its sheer scope, and insisted that relations between both countries have not deteriorated over the legal dispute.<\/p>\n

Although the completion date is May 31, the inauguration of the new Panama Canal will not take place until June 26, coinciding with general elections in Spain. This means that acting prime minister Mariano Rajoy will be unable to attend.<\/p>\n

Nearly 70 heads of state and government have been invited to come witness the crossing of the first ship, a container barge named Andronikos owned by the China\u2019s COSCO.<\/p>\n

The new locks built by the consortium will allow the passage of triple E class ships, a type of very large container ship. Over 100 vessels have already booked dates to make the crossing between the Atlantic and the Pacific between now and September.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Spanish-led consortium working on the expansion of the Panama Canal is planning to hand over the completed<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-16722","post","type-post","status-publish","format-standard","hentry","category-news-articles-panama-perpsective"],"yoast_head":"\nNew Panama Canal set to open, but builder unsure how much it will earn - Blog and Newsletter<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/new-panama-canal-set-to-open-but-builder-unsure-how-much-it-will-earn\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Panama 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