Panama City, Mar 18 (EFE).- The Panama Canal Authority and the consortium building a third set of locks for the inter-oceanic waterway said in separate statements that they will take a dispute over cement quality to international arbitration.
In the latest chapter of an often thorny relationship between the authority, known as the ACP, and the Grupos Unidos por el Canal consortium, the latter said Tuesday it has filed a request for international arbitration as it seeks an award of $345 million.
On Dec. 31, the Dispute Adjudication Board, or DAB, the second level of arbitration established to solve contractual disputes between the ACP and the GUPC, said the consortium was entitled to $233 million of the $463 million the consortium was seeking from the ACP, as well as a six-month contract extension, in connection with two specific issues.
It said in its resolution that the consortium was right in claiming that at the start of the work it was unable to obtain basalt - a key ingredient in cement - of the quality and the quantity the canal authority said would be available.
The board also concluded in that same resolution that the ACP was at fault for "unjustified" delays caused by its failure to give timely approval for the concrete mix proposed by GUPC.
In its statement on Tuesday, the consortium said it will now seek $345 million in compensation for the cement issues and for other unspecified damages suffered by GUPC's members.
The ACP, for its part, said Tuesday it formalized its request for international arbitration after waiting the required 56 days since issuing a note of dissatisfaction in January with the DAB's Dec. 31 resolution.
The dispute could now head to the International Chamber of Commerce arbitration tribunal in Miami, the third and final arbiter established to solve contractual disputes between the two parties.
In January, ACP chief Jorge Luis Quijano told Panama's unicameral National Assembly that the main obstacle to the completion of work on the canal expansion project was GUPC's standing claims before the DAB over alleged cost-overruns for which it is not responsible. At that time, those claims amounted to $2.3 billion.
The consortium, which in 2009 won the locks contract - the centerpiece of a $5.25 billion expansion project - with a $3.1 billion bid, is led by Spanish construction giant Sacyr Vallehermoso and Italy's Impregilo, each with a 48 percent stake, and also includes Belgium's Jan de Nul and Panama's CUSA.
The third-locks project was to have been completed in October 2014, but various setbacks have pushed the scheduled completion date into the first quarter of 2016.
GUPC halted work on the locks on Feb. 5, 2014, alleging a cash-flow crisis stemming from $1.6 billion in cost overruns that it insisted the ACP should cover.
On Feb. 27 of that year, the ACP announced that it had reached a conceptual agreement with GUPC to inject fresh funds into the project and ensure completion.
The parties then signed a Memorandum of Understanding embodying the terms of the conceptual agreement, which stated that GUPC would pay $100 million and ACP would advance $100 million to enable the work to continue.
The Panama Canal, which was designed in 1904 for ships with a 267-meter (875-foot) length and 28-meter (92-foot) beam, is too small to handle modern ships that are three times as big, making a third set of locks essential.
The inter-oceanic waterway handles roughly 5 percent of global trade.
