Panama Canal Authority ordered to pay $234 million to consortium

Contractors also get six month extension in dispute over basalt quality and concrete testing.    The Panama Canal Authority (ACP) has been ordered to pay $234 million to the GUPC consortium that is building the third set of locks for the Panama Canal.
   GUPC — the three-company combination of Italy’s Salini Impreglio, Spain’s Sacyr and Belgium’s Jan de Nul — said a dispute adjudication board (DAB) ruled in its favor and that the ACP must pay the $234 million and grant a six-month contract extension.
   GUPC said the board ruled in its favor over claims related to poor-quality basalt and delays by ACP in approving the concrete mix. GUPC said work on the expansion of the canal has reached approximately 84-percent completion, and its entry into operation is scheduled for the first part of 2016.
   “The DAB has in fact ruled in favor of the consortium with regard to claims related to the geological difficulties encountered during the work and related delays in the execution of the works, recognizing the responsibility of the administration of the canal, which by systematically rejecting the claims from the consortium ultimately caused further delays and increased costs of the project,” said a statement from a spokesman for Salini Impreglio. “The board also recognized for this reason the right of the consortium to have six months’ extension in the execution of the works.”
   The spokesman added, “This first DAB ruling is an important basis in the context of the claims that the consortium submitted during the four years of work.”
   The Bloomberg news service reported that the stocks of Sacry and Salini Impreglio jumped today on news of the dispute board’s ruling.
   The announcement of the board’s decision comes says after the Panama Canal celebrated the 15th year of Panamanian administration of the waterway. In 1977, U.S. President Jimmy Carter and the Panama President Omar Torrijos signed the treaty that led to Panama playing a greater role in operating the canal and its eventual turnover of the waterway to Panama at the end of 1999.
   In a year-end press release, the ACP said that since 1999, it has invested $2.4 billion in projects aimed at updating its operational infrastructure and has acquired new equipment, guaranteeing its clients an efficient, safe, reliable and competitive service.
   ACP said the expansion program has “reached a pivotal moment this year with the installation of rolling steel gates and electro-mechanical components. In 2014, the program registered several major milestones such as the delivery of the 16 gates necessary to operate its new locks, including the transfer of the eight gates for the Pacific-side locks through the waterway, and the beginning of the installation process at the Atlantic side.”
   It said first tests in the new locks are expected to take place at the end of 2015 for the new locks to be ready for commercial transit in the first quarter of 2016.
   ACP said it is preparing its staff and personnel to operate the expanded waterway. Since 2012, canal pilots have been trained at the Panama Canal’s Center for Simulation, Research and Maritime Development using post-panamax model ships. To further enhance its training capacity, the Panama Canal is building a new manned model training center. The center will include two lakes and 1:25 scale ships to simulate transits to the expanded waterway.
   In addition, the Panama Canal will charter a post-panamax ship to train pilots and tugboat captains that will assist in transits through the new lane. The vessel will be used several months in advance of the opening of the expanded canal to test the new locks.