PANAMA Canal arbitrators of the Dispute Adjudication Board (DAB) say that if work were suspended in a dispute over cost overruns, it could take as long as 2020 to finish the waterway's expansion, Reuters reports.
It is widely suspected that Spanish-led consortium of lock builders, Grupo Unidos Por el Canal (GUPC), deliberately anticipated cost overruns when it bid low to win the contract expecting to be paid more later in extra charges.
The DAB statement gave some credence to this, saying GUPC's shortfall was "genuine", but that its 2009 bid of US$3.12 billion was likely too low.
Facing cost overruns, GUPC first threatened a work stoppage on January 20, but has since has put that date back until the end of January.
A Spanish-led consortium of lock builders have threatened to stop work if not paid US$1.6 billion to meet additional costs, which the Panama Canal Authority (ACP) refused until specific expenses were itemised,
Said the DAB panel: "If GUPC was to stop work now, the canal would be finished, but not in 2015 - more likely in 2018, 2019, or 2020," said the DAB panel. The enormous losses to - which have not only a severe financial impact but also would seriously damage its credibility and reputation - can only be imagined."
The planned completion date for the expansion of the 50 mile (80 kilometre) waterway has already been delayed from 2014 to mid-2015.
Refusing GUPC's demand, the ACP said the consortium could be dismissed and that other contractors could finish the third set of locks, the heart of the expansion.
Attending the World Economic Forum in Davos, Panamanian President Ricardo Martinelli said: "Panama has the resources, and will finish work by 2015 regardless of what happens, rain, thunder or lightning."
WORLD SHIPPING
27 January 2014 - 19:53
Panama work stoppage could delay expansion to 2020: Arbitrators
PANAMA Canal arbitrators of the Dispute Adjudication Board (DAB) say that if work were suspended in a dispute over cost overruns, it could take as long as 2020 to finish the waterway's expansion
WORLD SHIPPING
27 January 2014 - 19:53
Panama work stoppage could delay expansion to 2020: Arbitrators
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