Canal Expansion: ACP between a rock and a hard place

The high stakes poker game between the Panama Canal Authority (ACP) and the expansion construction consortium continues, to see who will blink first.

CentralAmericaData, like other commentators in Panama and around the word, believe the ACP is between a rock and a hard place, despite the statements of President Ricardo Martinelli, calling on the moral obligations of the countries that the consortium members call home.

In an editorial, the online publication, read throughout the business world says: “The Consortium has rejected the proposed solutions one by one, knowing that it would be more expensive to replace it than to acquiesce to its demands.
“The alleged light at the end of the tunnel that led to an agreement in principle to resolve the alleged illiquidity of Grupo Unidos por el Canal (GUPC), was dimmed when the consortium led by Sacyr and Impregilo returned to its extremist position: Pay the overruns of $1.6 billion, or the works will be halted.
“The alternative put forward by the Panama Canal Authority, that it takes over management of the works, seems unrealistic, considering that repairing the necessary structures to complete the works, means not only higher costs, by hundreds of millions of dollars, but a considerable delay in the opening of the extended canal, with expected operating income losses, already foreseen, also of hundreds of millions of dollars.
“The construction consortium Grupo Unidos por el Canal seems to have Panama gripped by the neck, and along with it all of the adaptation projects for Post Panamax ports in the region. It is GUPC which has the upper hand, and they know it. They probably already knew it when they won the tender with a bid that was one billion dollars lower than the second cheapest bid.
The $1.6 billion required by GUPC will come from somewhere, and the expanded Canal will probably open in 2015.