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Fri, Jul 10, 2009 - Page 10 News List

Spain’s Sacyr wins bid to expand Panama canal

UNITED FOR THE CANAL To finance the US$3.12 billion project, the operator of the waterway said it would raise tolls, which already bring in about US$5 million a day


A consortium led by Spain’s Sacyr won a multibillion dollar bid on Wednesday to build a new set of locks that will allow giant cargo vessels to cross the Panama Canal, the Canal Authority said.

Adiano Espino, the Panama Canal Authority official who made the announcement at a public event, said that the winning bid received the best technical evaluation and was also the most affordable.

The “United for the Canal” group, which brings together Spanish, German, Italian and Panamanian companies, presented the lowest bidding price, at US$3.12 billion. The cost was earlier estimated at US$3.35 billion.

The canal was built between 1904 and 1914 by the US, which handed control over to Panama in December 1999.

The largest ships that use the canal carry up to 5,000 containers, but after the expansion supertankers and ships carrying as many as 12,000 containers would be able to sail through it.

“The process has been crystal-clear,” said Panamanian President Ricardo Martinelli, who was present at the ceremony.

“The country has benefited and the price is even lower than the base price that the Canal Authorities had,” he said.

Reacting to the decision, Sacyr chief executive Luis del Rivero described it as a positive development for Spanish businesses.

“It’s good news for Spanish businesses and engineering,” he said during a roundtable discussion in Madrid, adding that the project was “one of the world’s most important engineering works.”

According to the bidding rules there is still a period for the losers to appeal the result.

The “United for the Canal” group includes Sacyr Vallehermoso SA, Impregilo SpA of Italy, Jan de Nul NV of Belgium, and Panama’s Constructora Urbana.

The group beat out bids by a consortium that included the US-based Bechtel and the Taisei and Mitsubishi corporations of Japan — which according to Espino asked for US$4.19 billion — and a bid by the CANAL consortium, headed by Spanish companies ACS Servicios and Acciona Infraestructuras, which asked for US$5.98 billion.

Some 14,000 ships, comprising about five percent of annual world commerce, pass through the Central American shortcut between the Atlantic and Pacific Oceans.

The waterway’s main users are the US, China and Japan.

The government says work would be financed by a hike in tolls, which pull in some US$5 million a day.

The canal expansion project, begun in September 2007 and budgeted at US$5.25 billion, is expected to be completed by August 2014, 100 years after completion of the initial construction.

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