Looming Labor Strike Could Delay Panama Canal Expansion

Tests of the new locks on the Atlantic side of the canal in June 2015. Photo: ACP
Tests of the new locks on the Atlantic side of the canal in June 2015. Photo: ACP

 

Update: Panama Canal Expansion Strike Averted

Original: A looming labor strike could delay the opening of the expanded Panama Canal’s Third Set of Locks unless the main contractor behind the project can reach an agreement with subcontractors over wage increases.

Panama’s labor union SUNTRACS is threatening halting work as soon as Wednesday unless it receives wage increases for its 6,000 workers involved in the project. According to GUPC, the main contractor of the Third Set of Locks, SUNTRACS is requesting a new wage increase of 8.9% starting from July 1, 2015, even though GUPC insists that a previous wage increase of 11% in May 2014 was just a one time deal.

The labor strike comes at crucial time for the project. According to the Panama Canal Authority (ACP), the Third Set of Locks project now stands at 93% complete and any delay at this point could impact the on-time delivery of the new locks.

“The ACP has encouraged both sides to reach an agreement on matters that, by law, only pertain to dealings between GUPC and SUNTRACS members,” the ACP said in a statement issued Sunday. “The ACP, although the ultimate owner of the project, is in no way responsible for labor issues arising from any failure on the part of GUPC to meet labor demands by its subcontractors. On the contrary, the ACP is deeply concerned about the situation and is following closely the developments on the matter as its business may be impacted directly if the work is not carried out efficiently and promptly to deliver the project on time.”

In its own statement concerning the pending strike, GUPC said that it remains open to dialogue with the union and workers so that the project does not stop, reiterating ACP’s concerns that any work stoppage would jeopardize the delivery of work.

As it stand now, the Third Set of Locks is expected to be completed in April 2016.