Wednesday, April 23, 2014

Panamá: Update--PCA, Having Agreed with Spanish Consortium on a $100 Million Split, Now Faces a 22% Wage Increase by PCA Workers

According to EFE, a nationwide strike by construction workers demanding annual salary hikes of at least 20% brought work on a major Panama Canal expansion project to a standstill on Wednesday (April 23).

The expansion project “is completely paralyzed,” Hector Hurtado, secretary of the Suntracs union, said.

Spokespersons for the Panama Canal Authority (PCA), which manages the inter-oceanic waterway, told EFE for their part that the workers had arrived at their stations but “are inactive.”
EFE was unable to get an immediate comment from the GUPC consortium, which is led by Spain’s Sacyr and responsible for the centerpiece of the $5.25 billion expansion project: the construction of a third set of locks.

The strike comes as the project to build the new locks – essential for handling larger, modern ships – was revving back up to normal speed after a contractual dispute paralyzed it for two weeks in February 2014.

That crisis, sparked by GUPC’s demand that the PCA meet a cost overrun amounting to $1.6 billion, prompted tough negotiations that culminated in March with each side agreeing to provide $100 million to complete the project.

COMMENT: Work on the new locks was at 75% of the level prior to the contractual crisis, canal administrator Jorge Quijano said Monday (April 21) during a tour of the project with Panamanian President Ricardo Martinelli.

The expanded canal will be up and running at full capacity by 2016, the President said.

Hurtado did not indicate in his remarks to EFE how many laborers building the third set of locks were on strike, although he said GUPC figures show that 3,000 workers are involved in the project.

Suntracs, the country’s most powerful union with around 70,000 members, is demanding annual salary hikes of at least 20% for each of the next four years, while the Panama Construction Chamber is proposing a staggered raise that would see workers’ pay increase by 22% in four years.