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Grupo Unidos por el Canal claims $3.5 billion in cost overruns The consortium Grupo Unidos por el Canal (GUPC) delivered the completed third set of locks to the Panama Canal Authority (ACP) on June 25. But it also submitted something else, a $3.5 billion bill for additional costs. The claims exceed the value of the original contract, which was awarded to the consortium in 2009 for $3.1 billion. There are $569 million in claims pending before a conflict resolution board and $527 million pending before an international arbitration panel, the final step in the claims process. The ACP so far has paid the consortium the original $3.1 billion, plus an additional $364 million in additional costs it has recognized as valid. The rest of the claims are yet to be submitted to the conflict resolution board or they are still being considered by the ACP. http://www.prensa.com/in_english/ruta-reclamos-Canal_21_4535006455.html
This is an excellent article, albeit long, dealing with the growth of business in Panama which is occurring as a result of the Canal expansion. From the Martes Financiero or Tuesday Financial edition of LaPrensa. The Load is Multiplied SHERLY DÍAZ / ÓSCAR CASTAÑO freetranslation,com ..partial edit by me. During the ten years it took for the construction of the widening of the Panama Canal, a total of 431 companies participated in this megawork of engineering. Some provided inputs for the construction. Other services provided energy, dredging, bunkering, technical support or logistical solutions. Of that total, 267 companies appear as contractors to the Panama Canal Authority, and another 264 as subcontractors. The List, which includes both local companies and foreign, is a clear example of economic dynamism as they developed the work on enlargement in which 5 billion dollars would be invested. A study of the maritime chamber of Panama, entitled Economic Impact of the Maritime Sector of Panama, which dates back to the year 2014, reveals that this activity came to generate for the country 9,769,800,000 dollars, of which only the channel represented 53.8 per cent of the entire industry. The other 46.2% or its equivalent of $4.5 billion dollars is divided into 12 sectors. The first four: port, with thousand 477.9 million (15.1%); sale of fuel, with 891.6 million dollars (9.1%); agencies and shipping lines, with $850 million (8.7%) and fisheries, with 427.5 million (4.4%), among others. (See table: Segments by Panama Maritime activity). After the enlargement of the waterway that serves the world, a range of opportunities opened that many companies viewed during the building of the work. This process allowed them to prepare to meet the diverse needs of the activities linked to the maritime activities and logistics of the country. Rommel Troetsch, president of the maritime chamber of Panama, maintains that during the expansion of the waterway a movement was generated in the loading of containers such that some of the shipping agencies who came to this project decided to stay and maintain operations in the country not only to serve the local market, but for the region and even South America. "Panama has emerged as a maritime center of America, and in a business opportunity," stresses Troetsch. The Panama Canal records about 14 thousand transits of ships a year, which has been well used by several companies to provide these boats maintenance services, repair of radars or electronic equipment, to name just a few. This is not a new business in the country, but these companies displayed the possibility of strengthening its operations to contemplate the installation of its permanent operations center in the isthmus to address such a fleet of boats in Panama. Or at least agencies of representation. And due to the fact that the country is a hub air facilitates the arrival of crews of ships from other destinations, and from here they can address and disembark from ships. "This is a topic that is historically in Panama and in which it is increasingly consolidating as a center of change of crew". The Opportunities Members of the maritime sector and logistical coincide that in the country there are many opportunities to exploit. Specifically there are three segments in which must be special emphasis: in the center of the transshipment of cargo and in the sale of both fuel to vessels as of supplies to these vessels. Some of them maintain that there is a bet on the growth of the Center for the transshipment of cargo of Panama. For this it is necessary to increase port capacity, although this year saw a drop of 13 per cent for the transshipment of cargo during the first five months of 2016 compared with the same period of last year. Troetsch notes that it is necessary to revise this business model to make it more efficient and to attract more cargo. It is even a topic being evaluated with the local authorities. The shipping agencies seek savings and the country should continue to promote trans-shipment for which the country will grow it's maritime services. The second objective to join is the service of the sale of bunker to boats. It is estimated that the annual sales of fuel to these ships is 900 million dollars. The country serves only between 13% to 15% of all vessels transiting the Canal. There is a potential market. And the sale of supplies to vessels, such as food, beverages, refrigerated products, dry, consumption of lubricants, fuel, ship repairs, change of crew, review the equipment or maintenance. A study of the maritime chamber of Panama of four years ago revealed the sale of 32 million dollars in supplies to these vessels. Currently built are auxiliary maritime services docks. All these products for the boats are ferried between the mainland and the point where the vessels are anchored. To bring these supplies to the boat in anchor requires this type of infrastructure. "A dock is key so that I can load the food, the crew, supplies and bring them to the ship that are in the anchor waiting transit", added the president of the maritime chamber of Panama. It adds that the country lacks a better organization between the Government and private enterprise, and make the studies to sell more maritime services correlated with the load, the boat and the crew. The Captain Carlos Garcia, general manager of Panama Pilot Services Corp., considers that after the enlargement of the waterway there is a greater dynamism in the logistics sector, but pointed out that their growth depends on the efficiency, productivity and quality of the service that is offered to the ships. "Panama has to compete with Jamaica, Cartagena, Limon and Moin, in Costa Rica. It should be better prices and quality of service," adds Garcia. Panama Pilot Services is a company of pilotage of ships with 20 years of service in the bay of Manzanillo. The manager explains that the Panamanian ports are preferably for the transshipment of cargo: 80% in transit and the 20% remains in the country. Each year pass through the channel a total of 348 million tons of cargo, under the system of universal tonnage of vessels of the Panama Canal. That is expected to be replicated after the widening of the waterway. García anticipates that the challenge for auxiliary enterprises will grow and therefore the ports were conditioned in its part logistics to respond ships neopanamax. Some of the attentions mostly sued lie in the supply of fuel and food or the maintenance of the ships. "You must expand the entire logistics system, but this depends on the efficiency and productivity in the quality of the services provided". The operation is simple for Panama Pilot Services. Expert in pilotage and in services of boats, if you increase the volume of ships will the income. "We need to increase the labor force, either practical or for floating path". The fact that these ships pass through the channel does not mean that stop in our waters, and it is there where other countries in the region compete to see how "we steal the mandate, as is said in good Panama," says Surse Pierpoint, general manager of the Colon Free Zone (FTA) and member of the Cabinet Logistics Panama. Pierpoint says that unlike the panamax ships, with a capacity for 5 thousand TEU, which are gradually disappearing, maritime waters are now beginning to colmars "The challenge for us is to keep a lot of competitiveness to meet these boats. Because for us in the Colon Free Zone is key that the boat stop and lower the load. Because the costs of operating are increasing and we cannot remain outside the jurisdiction in costs," warns. While Pierpoint qualifies as "difficult" business opportunities for small and medium-sized enterprises in the free zone after the expansion of the Canal. Lack of a network of factories suppliers in Asia, not to say China, and a good structure to be able to be projected with this advantage in the region. For a small company in the FTA that invoice less of 10 million dollars per year is difficult to grow product of the rise in the cost of products in Asia, the behavior of the Chinese economy and a fall in demand in Latin America for the cooling of the demand. "It is an uncertain situation and uncertain at the moment. From the point of view of cost there are highly qualified people looking for work, Bodegas very cheap, so that the entrepreneur who sees opportunities is the one that sells handkerchiefs when others are crying." Experience Maxindustrias supplemented the Panama Canal of the slings of steel cables to load lifting maneuvers. Press/Eric Batista Some of the companies that participated as suppliers of products for the Panama Canal in its enlargement put to the test the quality of its product offering and logistics capacity. One of these companies is Maxindustrias, which provided services and solutions to the channel for maneuvers of lifting the load and made-to-measure solutions according to the need of the customer, recalls Fernando Lara, commercial director of This Panamanian company. Ariel González, Commercial Counselor of the industrial area, explains that the company met with staff of the Panama Canal to know their needs throughout the project, mainly of inputs for the hoisted. For example, you needed chains and belts of burden of high tonnage and in large quantities, but before the project the company could only manage these volumes in a period of one year. The logistics aspect was another challenge every time they needed to quote these inputs on the outside, but in sizes, colors and very specific capabilities. Once arrived the containers had to check very carefully every detail of the material: "If they were of a foot or two feet long," says Gonzalez. Pedro Castillo, head of industrial sales, adds that for the maneuvers that were carried out in the construction of the accuracy of these details was very important because it worked at times with a very narrow margin of error and ensured the safety of personnel in the work and equipment. The experience that won Maxindustrias as suppliers of the widening of the Panama Canal were now serves as a reference for addressing other markets. It has a presence throughout Central America, the Caribbean and part of South America. Another multiplier effect of the work is that companies that provide the boats with what is necessary for its operation, requested products used during the construction in excellent condition, as new. Gonzalez said that some of the companies present on the occasion of the works in the waterway to the that they supplemented products, remained in the country demanding their services. An opportunity that the company did not despise. In the same way that local companies offered their services to the channel when it became the enlargement of the waterway; they also made the same companies that came from abroad. An example of this is to either Energy Group, composed of a handful of companies. The company serves via Ship Management Panama, to manage boats with regard to crews or maintenance; Nolkata Management, a representative shipping company that offers services of agency, transit and water supply; Energy Company is responsible for the purchase and sale of fuel; and San Martin Group to manage boats from the group in Venezuela. Has a barge in Venezuela that supplies fuel to the power plant of the city of Maracaibo; and in Panama has two boats: one in the Atlantic and another in the Pacific. Pedro Suira and Johana Corner, spokesmen of the company, explained that the company opened operations in Panama five years ago, motivated by enlargement. The interest of the group in the country has emerged in its status as a strategic point for the transit of vessels. World Began with supply of bunker, and little by little founded the other companies. Now, with a channel already expanded, the company has the expectation that improve the traffic volume because it is expected the arrival of more ships and larger. "By now our strong is the fuel and you can sell more fuel. In greater quantity and equally with the auxiliary services we have how to provide water, lower rain water, such as delivering parts, and then we can offer more products on a larger scale in many more boats". Panama Marine Services, expert in maritime services, says that the scenario for the logistics sector with the expansion of the Canal brings new challenges of logistics to having to diversify in accordance with the requirements of the clients. "Our company has an estimate of higher growth of our market with the arrival of the ships neopanamax. In the first month of the extended Channel passed 55 boats. Our company is ready to continue to grow along with that market" say their spokespersons. To meet these new requirements the company made an investment in new infrastructure and equipment to be able to continue its existing and future customers those services and better quality products of world class in the shortest possible time. Reveal that in its new winery maintain a sustainable inventory for six months and thus cover the orders of their customers in regard to painting, Life rafts and chemicals. The maritime world in Panama is opening up a world of opportunities in various edges. It now takes advantage of this possibility or simply other take advantage. http://www.martesfinanciero.com/history/2016/08/09/informe_central.asp