Canal Expansion: Lack of Liquidity Again ?

"... We only have about $45 million in our bank account, while debts to suppliers and subcontractors have increased from $160 million to $200 million" - Pietro Salini, director of Impregilo.

Friday, May 8, 2015

The lack of liquidity in the consortium Grupo Unidos por el Canal could once again affect the project and delay the start date of operations of the expanded canal.

With only 11 months to go before the supposed completion of the project, pressure is being brought to bear once again on the consortium Grupo Unidos por el Canal (GUPC), which is claiming to have liquidity problems that might prevent it from completing and delivering the project on the agreed date and terms. This new chapter in the history of this project is similar to what happened less than two years ago.

Prensa.com reports that "... In a letter sent by Pietro Salini, head of representation of Salini Impregilo, on April 15 to the presidents of the other three companies making up the consortium (Sacyr, Jan de Nul and Cusa) and to which this newspaper had access, a warning is given that 'we only have about $45 million in our bank account, while debt to suppliers and subcontractors has increased from $160 million to $200 million.' "

It adds that "... With work on implementing the third set of locks 85% complete and all gates installed, a short-term solution 'would boost GUPC towards the end of the work, providing the ACP with the opportunity to expel us from the project without any consideration' . "

The only certainty is that so far the consortium has not submitted a notice of suspension or slowdown of work to the ACP. The ACP told Prensa.com that "... "The Panama Canal has not received any letter from the contractor. At this stage we are working on cash flow in order to complete the work, while the contractor fulfills its commitment made last year to settle their claims within the bodies established in the contract.'"

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More on this topic

Canal Expansion: Between a Rock and a Hard Place

January 2014

The construction consortium has rejected the proposed solutions one by one, as they know that being replaced would be more expensive for the ACP than to acquiesce to its demands.

EDITORIAL

The alleged light at the end of the tunnel that led to an agreement in principle to resolve the alleged illiquidity of Grupo Unidos por el Canal (GUPC), was dimmed when the consortium led by Sacyr and Impregilo returned to its extremist position: Pay the overruns of $1.6 billion, or the works will be halted.

Italian Member of GUPC Issues Ultimatum

January 2014

In a strong statement the Italian company warns of serious consequences if the Canal Authority does not agree to pay the cost overruns.

In an official statement the major partner, along with the Spanish company Sacyr, in the consortium Unidos por el Canal, warns that the Canal constructors are not social welfare companies, they have been contracted to do the work and they are not the owners, for which reason they should not have to bear the costs of the work.

Canal Expansion: Builders Ran Out of Money?

January 2014

The facts seem to bear out what was said in 2009 -according to WikiLeaks- by the U.S. ambassador, who described Sacyr as "a bankrupt company sustained only by the Spanish government."

The dialogue regarding the cost overruns in the construction of the canal expansion project between the Panama Canal Authority (ACP) and the consortium Grupo Unidos por el Canal (GUPC)-initiated by the intervention of the Spanish Minister of Development- has been interrupted, and it is not longer the Spanish group Sacyr the spokeshead but instead it is now the other majority company in the Consortium, Italy's Impregilo, which is asking - via the media- for $1 billion from the ACP, while keeping up its threat to stop the work.

Canal Expansion: Constructor's Counterproposal

January 2014

In a counterproposal to the $100 million offered by ACP, the consortium constructor is calling for an advance of $400 million and a long-term agreement.

The proposal by the Panama Canal Authority (ACP) to make a joint contribution of $283 million and avoid suspension of the construction of the third set of locks has not convinced the representatives of Grupo Unidos por el Canal (GUPC).

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