GUPC’s Panama Canal contract is about to expire

Grupo Unidos por el Canal (GUPC) has completed the three-year maintenance term under the contract it received as the main contractor responsible for the expansion of the Panama Canal.

Led by Spanish firm Sacyr, and also comprising Italy's Salini Impregilo, Belgium's Jan de Nul and local company Cusa, the group was awarded the contract for the design, construction, and maintenance of the canal’s third set of locks – the largest contract under the US$5.45bn expansion – in 2009.

Construction of the locks was completed in 2016, with a Chinese vessel making the inaugural transit through the expanded canal on June 26 of that year.

Since its opening, the expanded canal has been operating during 99.97% of the time, which exceeds the minimum of 99.6% established in the contract, Sacyr said in a release.

According to the firm, around 6,500 vessels have transited through the expanded canal over the past three years.

The vessels transiting through the new locks currently represent 51% of the canal’s revenues.

DISPUTE

Construction of the third set of locks came with a troubled history. Disagreements between the group and canal authority ACP over alleged cost overruns began around halfway through construction. The consortium halted works for some time to pressure the authority, and the two parties had to work out a deal so the project could proceed.

Initially the expansion was estimated to require a US$5.25bn investment and finish in October 2014.

The cost overruns, estimated to top US$5.2bn, have led to several cases filed before different international courts, with some procedures still pending resolution.

The legal conflict was passed from the previous administration to President Juan Carlos Varela, who now is about to leave office. Some cases, therefore, will be resolved during the term of Laurentino Cortizo, to be sworn in on July 1.