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Panama Canal expansion works still suspended due to strike

Panama Canal expansion works still suspended due to strike
Panama Canal expansion works remain suspended by the Cosntruction Workers National Union (Suntracs), which called a general strike on all construction works on 23 April.

Suntracs has presented a new wage proposal to the Panamanian Chamber of Construction (Capac) in an attempt to end the stoppage that is affecting some 400 projects, 98% of all the construction work in the country.

Saul Mendez the Suntracs secretary general said that in recent days there have been significant advances. Neither party provided details of the new offers. Since the outbreak of the strike, Capac has upped its proposed wage increase from 21 % to 25 %. However, the unions are asking for 80%.

"Both from the Board of the Panama Canal Authority as from the Administration of the Canal, we call to reactivate as soon as possible the works on site,” said ACP Administrator Jorge Quijano.

The Canal expansion works stoppage will bring another delay and likely to cost the ACP several millions dollars since it isa national strike, which GUPC, the consortium building the locks, may claim falls under the Force Majeure clause and consequently will likely present a claim to the ACP to cover the costs.

Following a strike at GUPC sites, in 2012, the workers in the third set of locks projects received a 12.5 % increase since January 2012 for unskilled workers and an increase of 15% for skilled workers. This means that since then they have been earning that much more than other construction workers in Panama. The ACP has had to pick up the cost of such earlier increase through a claim placed by GUPC. Such claim is estimated to cost the ACP about $35m.

At the time when the stoppage broke, works at the expansion sites had reached 75% and were expected to be at full activity by the end of April. The ACP will have to reassess the pace of activity once the strike is over and see if that will translate into further delay.

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