Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Panama Says Canal May Sign Deal Today to End Builder Dispute

March 13 (Bloomberg) -- The Panama Canal Authority may sign a contract as soon as today with builders led by Sacyr SA, ending a dispute over expanding the waterway that connects the Atlantic and Pacific oceans.

The contract may be signed today or tomorrow, Roberto Roy, minister for canal affairs, said at a conference in Panama City. The agreement calls for both parties to contribute $100 million each to continue the work, while Zurich Insurance Group AG will offer $400 million to back any additional bank loans for the contractors in a pledge to “jump start” the project, Roy said.

“The deal has basically been agreed to,” Roy said in an interview. “The contractors and the administrator had a final talk yesterday.”

Sacyr, based in Madrid, and its partners had been in talks since the start of the year over the project to build a new set of locks, which would allow the canal to accommodate larger ships and help reduce transport costs for commodities. As part of the agreement that was announced last month but still not signed, the locks must be completed by December 2015. That’s a year later than the initial date, which would have coincided with the waterway’s centennial.

At the start of the dispute, the group led by Sacyr had threatened to suspend work over cost overruns that amounted to $1.6 billion, or about half the original budget. As a result of the conflict, Sacyr made a provision that reduced earnings before interest, taxes, depreciation and amortization by 182 million euros in 2013, it said on Feb. 28.

Milan-based Salini Impregilo SpA is among the builders doing the canal work.

To contact the reporter on this story: Eric Sabo in Panama City at esabo1@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net Nick Leiber, David Risser

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.