Despite growing pains, Panama Canal reports record quarter

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Despite growing pains, Panama Canal reports record quarter

The Panama Canal reported its best first quarter in history, registering 87.7 million tons (PC/UMS) from October to December 2013.panamacanal

The volume results were 4.8% higher than predicted, beating the previous record set in 2012 with 86.2 tons (PC/UMS).

Revenue also exceeded estimates by 7.7% at US$614.1 million in toll fees.

The results were slated in part to exports to Asia from the strong U.S. grain harvest. The first three months of fiscal year 2014 have recorded 3,450 passages throught canal.

Growing pains

The results come as the canal undergoes its largest expansion project since its opening in 1914, including a third set of locks and dredging of Atlantic and Pacific entry points.

Continuation of expansion efforts were put under serious doubt this month, following threats by Spanish company Sacyr that it would halt construction due to a payment dispute with the canal.

Sacyr runs Grupo Unidos por el Canal (GUPC), the consortium contracted to carry out the expansion project.

GUPC has accused the canal of causing cost overruns of US$1.6 billion by providing inaccurate information on the area's geology, the Bangkok Post reported.

The group had threatened to stop working on Monday, Jan. 20 if no agreement could be achieved. GUCP backed down on Sunday, however and the European Commission has agreed to mediate the situation.

"The work, which costs more than US$100 million a month, is now 70% complete and technically nothing prevents it from being finished by the proposed timeline. The only thing affecting this project is the difficult financial situation and the unforeseen costs," GUPC said on its website.

"These unforeseen costs are verified by a specific audit carried out by independent experts. In short, there is no debate about the existence of these unexpected costs. The only thing under discussion is who should pay them, the contractor or the client."

The GUPC has proposed a co-financing proposal with the canal. The Bangkok Post indicated, however, that Panama was exploring "other alternatives."

Panamanian Finance Minister Frank De Lima told AFP that Panama, "has been emphatic in saying the canal will be completed by 2015, with or without the consortium."

Photo: Panama Canal Authority


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