MADRID, (Reuters) – A consortium led by Spain’s Sacyr has signed a deal to complete work on widening the 100-year-old Panama Canal, it said yesterday, settling a long-running dispute over cost overruns that had put the multi-billion-dollar project in jeopardy.
Insurer Zurich, whose agreement was necessary to get financial backing for the project, also said later on Friday that it had signed the deal.
The Grupo Unido por el Canal (GUPC) consortium, which also includes Italian company Salini Impregilo, said in a statement that the accord sets a new December 2015 deadline to complete the project, six months later than estimates given earlier this year.
“Zurich worked diligently with the Panama Canal Authority and GUPC to reach an agreement … and fortunately the two sides have had a successful negotiation,” Zurich said in a statement. Hold-ups on the engineering project, which involves the construction of a third set of locks, have left trading nations worldwide waiting anxiously to start moving a new generation of large container ships and liquefied gas tankers along the 50-mile shortcut between the Atlantic and Pacific oceans.
Zurich’s agreement was the last remaining step needed for the deal to be wrapped up, said one source with knowledge of the matter.
The dispute centred on $1.6 billion in cost overruns for the work, which is 70 percent done. The builders and the canal authority had blamed each other for the additional expense on the project, which was supposed to cost $3.2 billion.
