PanCanal information control works — for now

Problem? What problem? This is the November canal expansion update that Canal Affairs Minister Roberto Roy, Panama Canal administrator Jorge Luis Quijano and the scandal-plagued ACP board of directors insist on showing instead of giving the public and press access to the documents about the catastrophic concrete failures in the new locks. Video by the Panama Canal Authority.

Can Quijano and Roy keep their jobs in the face of
disaster via corny information control games?

by Eric Jackson

Seven unions that represent Panama Canal workers have demanded that the Panama Canal Authority allow them to have an independent auditor review the books and documents of the Panama Canal Authority with respect to the canal expansion project. The authority, which has not shown the GUPC consortium’s report that it said was due in September after grave flaws appeared in a Cocoli Locks sill in August, has also concealed such documents as the Panama Technological University (UTP) investigators’ findings about the problem. In a press statement berating its employees for wanting to see the public records, the ACP defined itself as transparent and “subject to rigorous control” because the ACP submitted 36 reports to the National Assembly over the years of the expansion project, because the authority maintains a website and because bond rating agencies based in New York have given its commercial paper high ratings.

Facts observable by people outside of the authority’s control, however, have the ACP on the defensive. First, Minister of Canal Affairs Roberto Roy and canal administrator Jorge Luis Quijano are attempting to shield themselves from any blame by having nothing to say about the crisis. Second, Roy’s and Quijano’s underlings are generally allowing the GUPC construction consortium, which is demanding nearly double the contracted price for designing and building the new locks, to define what the problem is and how they will fix it. Meanwhile, civil engineers and people with experience in large-scale construction are saying that GUPC’s statements about the nature of the problem are grossly inadequate starting from their failure to admit defective concrete pours, and that the drilling of holes into the concrete structures and the insertion of rebar and cement into the holes is a substandard repair that’s unlikely to meet the specification of locks that last for 100 years.

The locks sill with the waterfall? The rebar already in that structure has been soaked and will rust. When it rusts the metal will expand, crumbling the concrete around it. The proper solution is not rocket science. It’s just expensive and time-consuming. The defective concrete work must be torn out and redone.

There is a problem with redoing the bad concrete work. It may bankrupt Constructora Urbana SA (CUSA), a Panamanian junior partner in the GUPC consortium. It would probably be the last straw that destroys Spain’s heavily government-subsidized Sacyr Vallehermoso, which could take down the decrepit Spanish economy with it. (Is the desperate information delay here also a bid to save the conservative Spanish government, which faces the voters in December 20 national elections? Perhaps.) Redoing the concrete would also be a major blow to Italy’s Salini Impregilo, which is in much better financial shape than Sacyr.

CUSA being put out of business would defeat the scheme that gave rise to the present problem. That company is owned by the family of former canal administrator Alberto Alemán Zubieta, who had been CEO of it before coming to work for the canal. The GUPC bid was a grossly unrealistic lowball and many people said so at the time. But there was no conflict of interest, the ACP declared, because Alemán Zubieta said that a few months before the bidding he had sold his shares in the CUSA family business.

November 25 through 30 was an auspicious time for ACP public relations manipulations. November 28 is the anniversary of Panama’s independence from Spain, making November 30 a legal holiday and November 27 a widespread unofficial day off as people went “Black Friday2 shopping or left for the Interior to make a four-day weekend. In the United States November 26 was Thanksgiving, a lot of people were traveling on the 25th to get to family gatherings, most people didn’t have to work on the 27th and the 28th and 29th were a weekend. This was precisely the time when the ACP announced to Reuters that its April canal expansion completion date might not be met, and when GUPC, apparently allowed to speak on behalf of the ACP, announced to Cuba’s Prensa Latina news agency that the repairs were being done according to the GUPC’s less expensive scheme and should be done in January. Not only was information released when it was known that fewer interested people would be paying attention, but using a Cuban news agency is a good way of getting a story picked up by the world’s corporate news organizations.

There does, however, seem to be some bad news lurking out there for the ACP to minimize. A source had previously told La Estrella that there is another crack in another sill in the Cocoli Locks. Now The Panama News is told by a source whose version can’t readily be verified that there are concrete problems with the Atlantic Side locks as well. A lot of games might be played. In Panama false stories that would tend to make a party look bad sometimes get spread by such parties themselves in order to block or discredit critical journalism. Sources are sometimes wrong. Were the ACP to act like the public entity that it is instead of pretending to be a family business with secret records, these things could be readily checked.

Most likely the canal expansion story is going to get worse before it gets better. What we saw over the holidays was probably the ACP using crude techniques to manage news that will look bad. Most likely there will be a prolonged effort to conceal the most damning documents about the ACP – GUPC relationship. (After all, the 2009 contract itself has never been fully released to the public.) But we shall see. The size of problems already known to the public would make it hard to continue the sort of information management we have seen, if that is the plan.


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