GUPC wins locks bidding

CUSA, whose former CEO is the canal administrator, is part of the consortium that will design and build new locks

GUPC wins locks contract with $3.118 billion bid
by Eric Jackson

Grupo Unidos por el Canal (GUPC), a consortium led by Spain's huge but heavily indebted Sacyr Vallehermoso and including Italy's largest engineering and construction company Impregilo, the family-owned Belgian dredging and marine engineering company Jan de Nul, and Panama's largest construction company Constructora Urbana SA (CUSA), has won the bidding to design and build the new locks for the Panama Canal expansion. The consortium's low bid came in some $371 million less than the maximum that the Panama Canal Authority (ACP) said it would accept, beating out those of two rival bidders, a consortium headed by the US-based Bechtel which also included Japan's Taisei Construction and Mitsubishi; and a consortium led by Spain's ACL conglomerate.

Both the ACP and President Martinelli stressed that the process was transparent, but if things go badly there will be lingering suspicions because of CUSA's role in the winning consortium. Before becoming the Panama Canal's administrator, Alberto Alemán Zubieta was CUSA's CEO. He says, however, that the company is owned by relatives and that he has never owned part of CUSA. During the latter part of the US canal administration, special conflict of interest rules applied to any bidding by CUSA for canal work and despite the heightened scrutiny, the company won several contracts with the old Panama Canal Commission.

Originally the ACP had intended to award separate contracts for the Atlantic Side and Pacific Side locks, but after several aborted bidding processes the two jobs were consolidated, apparently as a cost-cutting move.

There are some novel and daunting engineering challenges involved in the design of the new locks, which will allow the transit of the huge "post-Panamax" cargo ships. These include a dampening of currents within the locks that could buffet ships against their walls, and the design of efficient water-saving technologies that do not make Gatun Lake --- the source of most Panamanians' drinking water --- appreciably brackish.

The ACP board of directors could reject the winning bid and start the process over again, but it is expected that they will approve the GUPC contract.

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