PANAMA CITY / MADRID (Reuters) — The
companies working to widen the Panama Canal and the waterway's
administrator on Friday each made new proposals aimed at reviving
the multibillion dollar project, after talks broke down this week
amid a cost spat and work ground to a halt.
Grupo Unidos Por El Canal (GUPC), led by Spanish builder Sacyr <SCYR.MC>,
said it was pushing for a settlement with the Panama Canal Authority
(PCA) to resume the work, which would double the capacity of the
century-old waterway.
The widened canal would allow bigger ships to ferry cargo such as
grains, chemical products and vehicles between the Atlantic and the
Pacific oceans.
The consortium said its proposal took into account the concerns of
the canal authority "while providing the funding necessary to finish
the third set of locks."
It declined to comment on the details of the proposal it sent on
Thursday to the PCA.
The Canal Authority said it had sent the consortium a
counterproposal based "on the parties contributing financial
resources to resume work as soon as possible."
Its proposal does not increase the contract price or accept any of
the consortium's claims. It also sets specific dates for the
delivery of a new set of lock gates and completion of the works, and
would extend a moratorium on repayment of advances "to the extent
that the GUPC meets the required delivery schedule".
The consortium's request for an extension to a moratorium on
repaying a $784 million advance until the end of arbitration, which
is aimed at settling a dispute over $1.6 billion in cost overruns,
has been a major sticking point.
GUPC wants to delay the repayment to free up funds to finish the
project.
Delays to a 2015 completion deadline could cost Panama's government
millions of dollars in toll revenue.
The PCA's head, Jorge Quijano, told Reuters in an interview on
Thursday that the Canal was ready to pull the plug on the contract
unless a deal is reached quickly.
He said he had held general talks with other companies about the
work pending on the expansion, but declined to name them.
Multilateral lenders to the project toured the site on Friday and
also received a presentation from the canal authority that included
details of the works stoppage by the consortium.
The canal authority has disbursed the $2.3 billion loaned by the
group of development banks for the project.
If the talks fail, the Canal could ask insurer Zurich North America
<ZURN.VX> to terminate the contract with GUPC, which also includes
Italy's Salini Impregilo <SALI.MI>, Jan De Nul from Belgium and
Panama's Constructura Urbana (CUSA), a canal official familiar with
the process said.
(Additional reporting by Sonya Dowsett
and Jose Rodriguez; editing by Elinor Comlay, Simon Gardner and Lisa
Shumaker)
