ANKENY, Iowa and PANAMA CITY, Panama – It might not be in direct dollars and cents, but as the Panama Canal Expansion project runs into a wall of cost overruns, American soybean producers may end up paying for it.
Grupo Unidos por el Canal (GUPC), the design-construction consortium responsible for the bulk of the Panama Canal expansion, is at odds with the Panama Canal Authority. After GUPC dialed back threats that work on the canal would stop Monday, the two parties could still end up before a dispute board, followed by arbitration, if an agreement can’t be reached.
Soy Transportation Coalition Executive Director Mike Steenhoek, pictured above, says the canal expansion project is no stranger to delays.
“Originally the Panama Canal expansion was scheduled to be completed in late 2014, in commemoration of the 100-year anniversary of the original Panama Canal being completed,” Steenhoek explains. “We’ve had a few minor delays that have resulted in now that the projected completion date is late 2015.”
He adds that more delays jeopardize the competitiveness of U-S soybeans; in a way, American producers could be stuck footing the bill.
“It’s certainly not in anyone’s best interest,” Steenhoek says. “We’re anxious for this canal expansion to be completed. We think that agriculture, particularly the soybean industry, is among those industries best-positioned to immediately benefit from that Panama Canal expansion, and so we don’t want any more delay than is absolutely necessary if we want to remain competitive in the international marketplace.”
The whole expansion project was claimed to be 72% complete at the end of 2013, with the third set of locks also 66% finished.
The Panama Canal Authority says it doesn’t expect any delays, even with the contractor dispute. It says completion is still set for mid-2015, with a final opening in Q4 2015.
