Cargo Business Newswire

Thursday, July 17, 2014

Panama Canal cost overrun claim hits Miami arbitration court

A $180 million claim involving the Panama Canal's disputed $1.6 billion cost overrun went to an arbitration court in Miami this week, according to canal officials.

The $180 million claim by the consortium working on the canal expansion project is the first of several contended construction costs that might end up in the hands of the Miami arbitrators.

Panama Canal Authority officials said other claims might go into arbitration if the authority and the consortium cannot reach a settlement under the mechanisms that are set up in their original contract.

A separate claim for $888 million for work stoppages is still being discussed by the two parties, while another worth about $497 million for the quality of aggregate used for the concrete mix is at the dispute adjudication stage, according to the canal officials.

Grupo Unido por el Canal consortium, a group of construction companies led by Spain's Sacyr and Italy's Salini Impregilo, halted work on the expansion project in February due to the dispute over who would bear cost overruns that boosted the project's $5.25 billion budget to nearly $7 billion.

The two parties signed a deal in March, agreeing to inject $100 million into the project to resume work. Both also agreed to extend repayment of $784 million of advanced payments made by the Panama Canal Authority to the consortium until 2018 at the latest.

Panama Canal Administrator Jorge Quijano said in June the project is now scheduled to open in January 2016.

For more of the Reuters story: reuters.com

More Newswire stories

TSA carriers aim for August 1 rate increase on Asia-U.S. trades

Port of Long Beach to spend $579M on capital projects next year

Djibouti sues to rescind DP World's contract at Africa's largest container terminal

Windsurfers rescued from shipping lanes

Today's Cargo News Archives