Shares of the Spanish company Sacyr plummeted 10% on the Madrid stock exchange today after the company announced its plans to cease work on the Panama Canal expansion unless the Canal Authority resolved a cost overage of 625 million dollars, which supposedly is 50% of the cost of their total job, and which allegedly didn't figure into the original contract. According to an article in La Prensa Panama, Sacyr (as part of the GUPC) gave the Panama Canal Authority 21 days to resolve the matter.
The Panama Canal Authority rejected the pressure applied by the GUPC and responded that if the GUPC didn't complete the work it would put into place foreseen contractual mechanisms to assure completion of the project.
The expansion is about 70% complete, but the construction of the third set of locks ajudicated to the GUPC for 3.2 billion dollars, is the most important aspect of the canal expansion project. Work began in 2007 and was originally scheduled for completion in October 2014. It is approximately a year behind schedule, anticipated to be completed by June of 2015 at a cost of 5.25 billion dollars.
President Martinelli has indicated he would go to Spain and Italy and demand their governments take moral responsibility for the work completion, because no business should be allowed to impose such irresponsible cost overruns on Panama. The GUPC blames the cost overruns on delays in delivery of equipment and supplies.
