Spanish construction firm Sacyr already spent over 1.8 billion dollar in excess of their initial budget, and costs are expected keep rising.
After yet another delay, expansion works in the Panama Canal are set to be completed by May, to be inaugurated by June 26th. The project has been the largest ever carried out on the canal since its construction, and will double the canal’s capacity through the construction of a new lane of traffic.
The venture was appointed to a consortium led by the Spanish firm Sacyr Vallehermoso, experienced in large infrastructure and public works projects, among which the most notorious is the Strait of Messina Bridge, one of the largest suspension bridges in the world.
However, their work on the Panama Canal has been marred by delays and overruns. Expected to cost a total of $5.3 billion, construction costs already exceed the initial budget by $1.6 billion, and with the initial inauguration date of 2014 a distant memory, the parties involved are now under a great deal of pressure.
Sacyr’s president, Manuel Manrique has claimed the project is 98% complete, but costs for the remaining 2% could be monumental, as several litigations are still underway. If these turn out in favor of the contractors, the Panamanian government (represented by the Panama Canal Authority) will have to pay in excess of a billion dollars in compensation.
The expansion has been ambitious from the start, but recent developments suggest that perhaps both, the government and the contractors, have been too conservative in their estimates.
LatinAmerican Post |