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Arbitration board to decide over Panama Canal cost overrun claim

Arbitration board to decide over Panama Canal cost overrun claim
An arbitration board in Miami on 21 July will begin examining the the $1.6bn claim presented by Grupo Unidos Por el Canal (GUPC) that is building the third set of locks, to the Panama Canal Authority (ACP), Reuters reported.

In January this year, GUPC claimed it had incurred additional costs of $1.6bn and demanded the ACP to pay the overrun costs or it would stop construction on 20 January. As the consortium did not receive a positive response from the ACP, works were slowed down and finally stopped 4 February. Following weeks of negotiations works at the locks construction resumed 20 February.

Sessions will be held behind closed doors with lawyers representing each side and hearings may take several days. At June-end, the expansion programme had reached 76% of its completion.  If the International Arbitration Board finds GUPC’s claim valid and order the ACP to pay cost overruns, the $5.25bn waterway expansion would end up costing around  $7bn.

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