Bumpy Road

The year's delay stemmed from issues related to the quality of the concrete mix being used in the lock structures. In 2011, the ACP rejected mixes provided by the locks contractor Grupo UPC that did not meet the 100-year standard set by the contract. While the issue was later resolved, the delay set back the completion date for the locks by six months.

Due to the issue, ">Grupo UPC filed a claim last August for an additional $573 million for the locks work. In May, the ACP rejected the claim, saying it not only lacked merit but the amount wasn't justified by the information provided by the contractor. The consortium comprises Spain’s Sacyr Vallehermoso, Italy's Impregilo SpA, Belgium's Jan De Nul NV, Panama's Constructora Urbana SA (CUSA) and the Netherlands' Heerema Fabrication Group.

Denying the claim, the APC said Grupo UPC did not present the necessary information to evaluate the concrete mix nor did the contractor present the designer's approval of said mixes.

"The contract clearly states that the quality of the aggregate and the material to produce it is under the responsibility and risk of GUPCSA and not ACP," noted the canal authority in its decision.

If approved, the claim would have increased the amount of the locks contract 18%, to $3.75 billion, significantly over the ACP's $3.48-billion allocated cost for the project. In 2009, Grupo UPC's bid for the work was the only one under the ACP's projected cost and more than a billion dollars less than its nearest competitor, a Bechtel-led consortium.

According to the contract for the locks work, Grupo UPC now can appeal its case to the Dispute Adjudication Board (DAB) for arbitration. To date, four claims involving the expansion project have been brought before the board for a decision, and the ACP has won them all.

The consortium may also face significant fines for the delay that could reach a maximum of $54 million. That amount could increase to $200 million if the completed locks fail the precommissioning tests. These tests will measure the speed with which the locks can fill with water and the amount of time it takes the gates to open.

In addition to the expansion project, the ACP in the coming year is slated to spend more than $238 million on maintenance of structures and equipment to sustain the level of production from the existing locks and channels. Since 2000, the authority has invested more than $2 billion in these efforts, which include ongoing dredging of the navigation channel, erosion control and upgrades to the equipment used to maintain the waterway’s operations.