Panama Canal Expects Work Deal Thursday

MarineLink.com
Friday, February 28, 2014
Photo courtesy Panama Canal Authority

By Lomi Kriel, Reuters

The Panama Canal Authority expects to formally sign a deal next week with a Spanish-led consortium to finish work on expansion of the waterway after a dispute over cost overruns held up completion, an official said on Friday.

"We expect that by Thursday we should be signing said document," Panama Canal Administrator Jorge Quijano told reporters a day after announcing a deal with the GUPC consortium, which is led by Spanish builder Sacyr and Italy's Salini Impregilo.

The deal, which was outlined on Thursday, foresees the consortium finishing work by December 2015 and would require both the Panama Canal Authority and GUPC to each inject $100 million for immediate cash flow needs to fully resume work.

The agreement would also extend repayment of advanced payments made by the Panama Canal Authority to the consortium that are worth $784 million until 2018 at the latest.

As part of the deal, the Canal Authority agreed that the consortium could use a $400 million surety bond through insurer Zurich North America as backing to seek financing.

However, the Zurich part will take up to six weeks to arrange, for which reason the $100 million cash injections were necessary to jump-start work, Quijano told a news conference.

Limited work on the project resumed on Feb. 21 after a two-week stoppage. The dispute has fanned fears of delays that could cost Panama millions of dollars in lost shipping tolls.

Holdups in the massive project posed a setback for companies worldwide that want to move larger ships through the waterway that links the U.S. Gulf Coast to Asian markets.

Canal chief Quijano said the newly expanded waterway would begin operating commercially by January 2016.

But he cautioned that if GUPC does not comply with the agreement, the canal will find other ways to complete the work.

"We remain prepared for another option," Quijano said.

The agreement contains safeguards related to the payback of the advances so that if the companies fail to comply they have to return the money straight away, he added.

The overall expansion, of which the consortium is building the lion's share, was first expected to cost some $5.25 billion, but the overruns could increase that to nearly $7 billion.

Sacyr, which receives a quarter of its international revenue from the canal project, reported on Friday a net loss of 496 million euros ($679 million) for 2013.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

Primeline Turns Against CNOOC

Primeline Energy Holdings Inc. announces that it has sent a letter to China National Offshore Oil Corporation (CNOOC) and CNOOC China Limited (CCL) (together CNOOC

Sovcomflot IPO Soon

The long-awaited initial public offering (IPO) of Sovcomflot, which runs one of the world’s largest tanker and gas carrier fleets, has moved a step closer.    Economy

First Cruise Company Fined under Australia’s New Fuel Rules

Australia’s NSW Environment Protection Authority (EPA) has fined Carnival PLC $15,000 after one of its P&O Cruises ships, the Pacific Jewel, breached new low sulfur fuel regulations in Sydney Harbour.

Ports

AAL Delivers Shiploader To Port Metro Vancouver

Leading multipurpose heavy lift operator AAL has completed a series of shipments to Port Metro Vancouver (PMV) of an innovative ‘mobile’ grain shiploader to be

Iranian Port Deal: Modi's Masterstroke

Indian Prime Minister Narendra Modi signed a deal to develop the Chabahar port in Iran for which India will extend $500 million. The historic pact makes Chabahar

DP World Launches $1.2 bln Sukuk Issue to Cover Tender

Dubai-based ports operator DP World launched a seven-year $1.2 billion sukuk issue on Tuesday, a document from lead managers showed.   The issue, structured to

Finance

Singapore Exchange in Talks to buy Baltic Exchange

Baltic Exchange privately owned by 380 shareholders. The Singapore Exchange (SGX) is in exclusive talks to buy London's Baltic Exchange, which has been at the

Nordic Shipholding Profits below Market Expectations

For the 3 months ended 31 March 2016, Nordic Shipholding A/S generated a profit after tax of USD 1.5 million, compared to USD 2.7 million in the same quarter last year.

China Okays CMA CGM's Acquisition of NOL

CMA CGM S.A. (CMA CGM), a global leader in container shipping, announces that it has received today confirmation that its pending acquisition of Neptune Orient Lines (NOL),

News

Singapore Exchange in Talks to buy Baltic Exchange

Baltic Exchange privately owned by 380 shareholders. The Singapore Exchange (SGX) is in exclusive talks to buy London's Baltic Exchange, which has been at the

Nordic Shipholding Profits below Market Expectations

For the 3 months ended 31 March 2016, Nordic Shipholding A/S generated a profit after tax of USD 1.5 million, compared to USD 2.7 million in the same quarter last year.

Mount Whitney Makes History

USS Mount Whitney (LCC 20), the U.S. 6th Fleet flagship, made history today as the first amphibious command ship to have an MV-22B Osprey land on its flight deck, May 23, 2016.

Government Update

Mount Whitney Makes History

USS Mount Whitney (LCC 20), the U.S. 6th Fleet flagship, made history today as the first amphibious command ship to have an MV-22B Osprey land on its flight deck, May 23, 2016.

Iranian Port Deal: Modi's Masterstroke

Indian Prime Minister Narendra Modi signed a deal to develop the Chabahar port in Iran for which India will extend $500 million. The historic pact makes Chabahar

Japan, Canada Share "Serious Concerns" on South China Sea-PM Abe

Japan and Canada share "serious concerns" over reclamation and militarisation in the South China Sea, Japanese Prime Minister Shinzo Abe said on Tuesday, in an

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Pipelines Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | 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: 0.1169 sec (9 req/sec)