Panama canal builders told to repay almost $1bn of cost overruns

The Panama Canal Authority said on Wednesday that an arbitration tribunal had ordered the construction consortium behind the waterway’s expansion to return $848m in cost payments.

The ruling hits the group of contractors that make up the Grupo Unidos por el Canal, or GUPC, which includes Salini Impregilo of Italy and Sacyr of Spain as well as Jan De Nul of Belgium and local firm Constructura Urbana.

The decision, by the Miami office of the International Chamber of Commerce, puts an end to a dispute between the authority and GUPC over who should pay for a cost overrun on the expansion project, which was completed in 2016.

The authority said the $848m accounted for advances that had been granted to the consortium.

Last year, the tribunal rejected a demand by GUPC for $193m.

Altogether, the project left $5.2bn in disputes to be decided in arbitration awards between the authority and the consortium. A first decision on this larger question is expected by the end of next year.

Salini General Manager Massimo Ferrari told Reuters on Thursday that the group would pay back $217m with a further $117m, which relates to variation orders. This depends on a court decision expected in March.

Shares in Salini fell almost 20% on Thursday.

Image: The newly built Agua Clara locks, on the Atlantic side (US Department of Transport)

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