This week we’re stepping back to focus on Latin America again due to the volume of energy developments in the region. This week and last we were debriefed by our partners at Southern Pulse on these latest developments of concern to current and potential investors in the region.
The Grupo Unidos por el Canal (GUPC) consortium warned on 20 January it would halt expansion work on the Panama Canal unless the government paid the US$1.6 billion in overruns incurred because the canal authority allegedly gave the builders incorrect geological information. Canal administrator Jorge Quijano emphasized that construction would go ahead with or without GUPC. On 22 January, Panamanian Finance Minister Frank De Lima said Panama was exploring alternatives should GUPC abandon the project, though he refused to say whether other builders had been contacted. On 5 February, the Spanish building company leading the Panama expansion project denied that work has been halted and said no date had been set for a halt to construction. Earlier that same day, the Panama Canal Authority (ACP) announced that talks with the Spanish-led consortium behind the project had broken down.
We are watching these canal developments closely, because there are plans for a rival Nicaragua canal as well, which would have significant geopolitical consequences.
Panama has decades of experience managing maritime operations. The Panama Canal expansion will allow for larger “post…