Panama Canal Seeks
Billions This Year
By Andrew Beatty
PANAMA CITY (Reuters) -
The Panama Canal
Authority will seek $2.3
billion in financing
before the end of the
year to pay for part of
the biggest-ever
expansion of the famous
waterway.
The canal's
administrator, Alberto
Aleman Zubieta, told the
Latin America Investment
Summit on Tuesday that
it is in talks with
banks to pull a package
together for a major
part of the expansion
that will cost $5.25
billion in total.
"We are looking at about
$2.3 billion in
financing for this
project," Aleman said.
"We are negotiating at
this time with the banks
to achieve the best
package possible for the
authority."
Aleman said the
authority was also in
talks with international
lending institutions and
that the financing would
be a combined package
with the private sector.
Asked when he wanted to
see it ready, he said:
"The end of this year."
Aleman was bullish on
the prospects of
securing financing
despite the ongoing U.S.
credit crisis and
troubles at some of
Europe's biggest banks.
"The canal (has) very
good credit, now there
is a flight to quality
projects and the canal
is one of those
projects."
He also said the rising
cost of labor and raw
materials in Panama
caused by the country's
sustained real estate
boom would not cause the
Authority to revise its
cost estimates for the
expansion in the short
term and that contracts
already awarded have
come within the budget
estimates.
The canal is a short cut
between the Pacific and
Atlantic oceans and
saves ships a long haul
around the southern tip
of South America.
The centerpiece of the
project will be the
creation of a third set
of locks that will allow
the canal to handle
ships carrying up to
12,000 shipping
containers at a time,
which do not fit in the
canal today.
Four international
consortia have been
short-listed for the
locks project, which
will be awarded in
October, including many
of the world's largest
engineering firms.
The expansion began in
September 2007 and is
scheduled to be
completed in time for
the centenary of the
canal's opening in 2014.
Earlier on Tuesday, the
canal awarded the latest
contract in the project
to Belgian firm Dredging
International to carry
out excavation work at
the Pacific entrance of
the canal. Dredging
International bid $177
million for the project. |
|
