Panama Canal Cost Dispute Headed to Miami Court

Posted by Michelle Howard
Monday, July 14, 2014
Photo: Panama Canal Authority

A $180 million claim involving the Panama Canal's disputed $1.6 billion cost overrun is headed to arbitration court in Miami next week, canal officials said on Monday.

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

The cost overrun temporarily halted work on the massive expansion project in February, and the Panama Canal Authority now says the project is on track to open in January 2016.

Additional hearings for other claims may also go to arbitration should the canal authority and the construction consortium fail to reach a settlement under two other mechanisms established in the original contract, canal officials told Reuters.

Under that contract, all claims are analyzed by both sides before proceeding to a dispute adjudication board if a compromise cannot be reached. If either side is unsatisfied with the board's decision, the claim moves to arbitration in Miami.

A separate claim for about $888 million for work stoppages is still being discussed between the two sides, 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.

The first $180 million claim to reach arbitration, over the cost of draining an area to create work space near the Pacific locks of the 50-mile (80-km) long canal, was to begin July 21 with procedural hearings at the International Chamber of Commerce's arbitration court in Miami.

"Both sides will submit their terms and draft procedural orders for how things will work," said Carolyn Lamm, a lawyer with White & Case representing the construction consortium.

Labor and cost disputes have plagued the effort to expand the 100-year-old canal, fanning fears of delays that could cost Panama millions of dollars in lost shipping tolls and posing a setback for companies worldwide that want to move larger ships through the waterway that links U.S. South and East Coast ports to Asian markets.

Work ground to a halt in early February due to the dispute over who would bear cost overruns that boosted the project's $5.25 billion budget to nearly $7 billion.

In a deal signed in March, the Panama Canal Authority and the Grupo Unido por el Canal (GUPC) consortium led by Spain's Sacyr and Italy's Salini Impregilo agreed to inject $100 million 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 in June said between 75 percent and 76 percent of the engineering project was complete, and a third set of locks to allow bigger ships to pass through the waterway should open in January 2016.

(By Zachary Fagenson and David Adams, Editing by Lisa Von Ahn)

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Statoil, Repsol, ExxonMobil Win Colombian Offshore License

Statoil announced today that it has been awarded interest in the COL4 license offshore Colombia in the Caribbean Sea in the 2014 Colombia Licensing Round, along with Respol and ExxonMobil.

Bahrain US$35-M Land Reclamation Contract for GLDD

Provider of dredging services in the United States and a major provider of environmental & remediation services, Great Lakes Dredge & Dock Corporation (GLDD) says

Global Ocean Trade: Latest Shipbuilding Orders

No tankship orders noted the past week by Clarkson Hellas in their latest S&P Weekly Bulletin, but no lack of orders in the dry bulk carrier market, all from Far East shipbuilders.

Legal

Thai Resort Owners Sue State Owned Company for Oil Spill

Business owners on Koh Samet island are suing a state-owned petroleum enterprise for the oil spill that polluted the resort island's beaches last year. More than 50,

Nigerian Piracy Threatens UK Interests: New Report

The UK economy is heavily exposed to lawlessness off the coast of Nigeria, a new report published today by the UK Chamber of Shipping says. The report found that almost all of the UK’s annual £6.

Maine Port City Bans Oil Loading

City councilors in South Portland, Maine, voted late Monday night to ban the loading of crude oil onto tankers along its waterfront, throwing up yet another roadblock

Ports

Panama Canal to Celebrate 100 Years

To commemorate its centennial, the Panama Canal will host a series of events August 14-15 in Panama City to highlight the impact of the waterway during the past century.

AIS Data for Emissions Reduction

With emissions reduction firmly on the industry’s agenda, studies show that carrying out ship emission calculations, based on AIS data, can offer significant benefits.

Maritime Reporter @ 75: The Daily Cartoon

Maritime Reporter & Engineering News was founded by John J. O'Malley (1905-1980) in 1939, and today ranks as the world's largest audited trade publication in the world serving the maritime industry,

Finance

Trading Dutch Well Placed to Pursue Russia Sanctions

The seafaring Netherlands prides itself on being a trading nation, reluctant to let politics get in the way of a good deal. But since the downing, allegedly

Navios Announces VLCC Delivery

Navios Maritime Acquisition Corporation, an owner and operator of tanker vessels, has announced that the Nave Electron, a 2002-built VLCC of 305,178 dwt, was delivered

Scorpio Tankers: Latest Financial & Ship Delivery News

Scorpio Tankers Inc. says it has updated its stock buyback program; lists its latest new vessel deliveries, and gives the release date of its second quarter 2014 earnings report.

News

Panama Canal to Celebrate 100 Years

To commemorate its centennial, the Panama Canal will host a series of events August 14-15 in Panama City to highlight the impact of the waterway during the past century.

Concordia Finally Heads for Scrapyard

The rusty hulk of the Costa Concordia began its journey to the scrapyard on Wednesday, after a two-year salvage operation off the Italian island where the cruise liner capsized two years ago,

Statoil, Repsol, ExxonMobil Win Colombian Offshore License

Statoil announced today that it has been awarded interest in the COL4 license offshore Colombia in the Caribbean Sea in the 2014 Colombia Licensing Round, along with Respol and ExxonMobil.

 
 
Maritime Contracts Maritime Security Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1763 sec (6 req/sec)