Preliminary Deal Reached for Panama Canal Project
After a two-week stoppage, limited work has resumed on the Panama Canal expansion project after the Panama Canal Authority and the Spanish-led consortium reached a preliminary agreement.
The consortium, led by Spanish builder Sacyr along with Italy's Salini Impregilo, was disputing with the Authority over $1.6 billion in cost overruns. With the new agreement, work is expected to be completed by December 2015.
The temporary work stoppage on the project fueled concerns over the possibility of billions of dollars lost by U.S. ports due to the delay
The deal is still under review, and needs to be signed, Reuters
"We have reached a conceptual agreement that protects the interests of the Panama Canal," Jorge Quijano, Panama Canal administrator, said in a statement.
With the deal, the PCA and the consortium GUPC will each inject $100 million in the project for immediate cash flow. The agreement would also extend the timeframe for repayment until 2018 at the latest for the advanced payments made to the consortium by the PCA worth $784 million.
Since the consortium was awarded the contract in 2009, concerns have circulated as the winning bid they submitted was $1 billion lower than their next competitor.