ACP says canal expansion on schedule

   The Panama Canal Authority (ACP), as well as Grupo Unidos por el Canal (GUPC), the consortium of four construction companies building a new, larger set of locks for the waterway, said they expect the expansion project to be completed on time.
   Despite a one-week construction workers strike in January, problems with perfecting the concrete mix for the locks project, and a report of work falling behind, both ACP and GUPC said in statements the canal expansion was on schedule.
   “The third set of locks project is foreseen to be delivered in Oct. 21, 2014, as scheduled,” said GUPC in a statement to American Shipper. It added that the fourth milestone, out of 12 interim milestones, was met on Jan. 24, 2012.
   The expansion project will allow much larger ships to cross the isthmus using new locks and channels – for example, Samsung has designed a 13,200-TEU ship capable of using the enlarged canal, compared to ships with maximum container capacities of between 4,800 and 5,000 TEUs today.
   “Even though the marine concrete mix design delayed the initiation of permanent concrete placement, the contractors’ latest schedule shows that the project will be concluded as originally planned,” said Jorge Quijano, ACP engineering and program management executive vice president, in a statement.
   He explained that there are basically three types of concrete used in the project – leveling concrete which is used to level the excavated terrain to install forms, marine structural concrete and mass concrete.
   Leveling concrete was not a problem because of the less stringent requirements, but he said marine structural concrete which will be in contact with water, including salt water at the sea entrances of the locks, has to “comply with very specific technical requirements included in the contract, which until achieved by lab tests and confirmed by field tests could not be placed.
   “In addition to compressive strength and contraction, the concrete had to be modeled to assure at least a 100-year life span and very low permeability to insure that the imbedded rebars are not reached by water which would cause them to corrode, expand and cause concrete to spall (flake off),” he explained.
   “There was a delay on the GUPC consortium to produce the right concrete design mix that would comply thoroughly with the contract requirements. Nevertheless the contractor this month gave us an updated schedule which shows additional equipment and personnel being deployed and an completion date of Oct. 21, 2014,” Quijano said.
   “Higher monthly concrete production rates are being planned to make up for what was not placed earlier. For this to be possible, more equipment has begun to arrive and is being deployed,” Quijano said. He added that “our contingency plans did include aspects such as strikes.”
   Workers building the new locks, which at $3.1 billion are the most expensive and technically challenging feature of the expanded canal, walked off the job in January for a week, complaining about not receiving overtime and weekend pay. They also demanded that their wages be increased and, after negotiations mediated by Panama Labor Minister Alma Cortez, the hourly minimum wage was raised from $2.90 to $3.34.
   “Because the labor increase was done through a change in law, the ACP will absorb the labor rate increase stipulated in the decree, and reimburse the contactor for such increase, based on fully audited reports,” Quijano said.
   Quijano said GUPC has incentive to complete to project on time because “there are liquidated damages in the order of $300,000 per day for completing the works late which does motivate the contractor to take completion date seriously and take whatever actions are necessary to avoid any significant additional cost for delays.”
   He noted there are 12 intermediate milestones, and they are all associated with retention of moneys if they are not met. He said so far the consortium has complied with the four milestones that were scheduled so far.
   “The last one was for the final (lock) gate design and was due this past week. At this time final gate design is at 100 percent, consequently no retention was made,” he added.
   GUPC is a consortium of four companies: Sacyr Vallehermoso of Spain, Impregilo of Italy, Jan De Nul of Belgium and Panama Cusa. In response to questions, the consortium said it will not have to seek adjustment to its contract with ACP after the strike because of existing provisions in its contract.
   Calculations to determine the additional costs resulting from “agreements reached between the government and the unions, are still ongoing and will be analyzed for recovery through the mechanisms already foreseen in the contract,” GUPC said.
   “I would like to point out that all other expansion projects (new access channel construction, lake and sea entrance channels deepening and widening) are on target to be completed in the last quarter of 2013, leaving only the locks project to be completed in 2014,” Quijano said.
   The statements from ACP and GUPC counter three articles that ran on the Website Panama-Guide.com and said the project was falling behind schedule. Don Winner, publisher of that site, told American Shipper that his sources worked for contractors on the locks project, but they had declined to be identified for fear of losing their jobs.
   Progress on the canal is expected to be detailed when the Panama Canal 2012 International Engineering and Infrastructure Congress, organized by the ACP, is held April 18-20 in Panama City. — Chris Dupin