How politics and culture worsened the crisis that hit the Panama Canal expansion.
BY JOACHIM BAMRUD
The crisis at the Panama Canal – temporarily resolved earlier this year -- can serve as a valuable lesson for other major infrastructure projects in Latin America, experts say.
“The most important missions other than finishing on time and within budget – those are given – is that the project should not stop and you should avoid a war with the other side during construction,” says Jerry Brodsky, a partner and Director of the Latin American Practice Group at Peckar & Abramson. “Panama failed on both counts.”
Meanwhile, the conflict was not helped by political and cultural issues, which drove the dispute, he says.
Brodsky played a key role in the successful negotiations – brokered by Swiss insurer Zurich -- that created a provisional solution that ended the crisis, which threatened to significantly delay the expansion of the 48-mile (77 km) waterway linking the Atlantic and Pacific Oceans.
Originally slated to be ready in time for its official Centennial celebrations in August this year, the expansion is now slated to be ready in December 2015, although some experts say it will likely be delayed further.
The price tag has also gone up. The original cost was $5.2 billion, but it now stands at $6.7 billion and may reach $7 billion.
Keywords: ACP, Arbitration, Bechtel, GUPC, ICC, InterContinental, Panama, Panama Canal, Peckar & Abramson, Sacyr, Vinson & Elkins, White & Case, Zurich