Panama and Building Consortium Reach Deal to Complete Expanded Panama Canal

panama canal expansion
Photo courtesy Canal de Panama

The Panama Canal Authority and the consortium hired to build the third set of locks for the Panama Canal have finalized a deal for the completion of the expansion project.

The PCA and the consortium Groups Unidos por el Canal (GUPC) on Monday said they have reached an agreement to sign a variation to the original contract that incorporates objectives laid out in a Memorandum of Understanding signed in March that established the framework for the completion of the Third Set of Locks.

The MoU included a co-financing concept that would ensure the necessary cosh flow for the remainder of the project and provided a deadline for the project’s completion by the end of 2015, a year later than originally planned. The deal ended a long-standing dispute over $1.6 billion in cost overruns and halted construction of the new locks for weeks.

GUPC is led by Sacyr of Spain and also includes Salini – Impregilo of Italy, Jan De Nul of Belgium and Constructora Urban, SA (CUSA) of Panama.

The overall expansion program is currently 78% complete while the new locks project 73% complete, according to the PCA.

In June, Panama Canal Administrator Jorge Quijano told reporters that Panama Canal’s new set of locks will be operational by the January 2016 after a labor strike unrelated to the cost dispute sparked fears that the project could be delayed even further.