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Reuters Summit-UPDATE 1-Panama canal sees contract by July

Published 05/05/2009, 02:55 PM
Updated 05/05/2009, 03:00 PM

(For other news from the Reuters Latin American Investment Summit, click on http://www.reuters.com/summit/LatinAmericanInvestment09?PID=500) (Adds quote, detail on shipping volumes, byline)

By Sean Mattson

PANAMA CITY, May 5 (Reuters) - The Panama Canal Authority expects to award the biggest contract for its $5.25 billion expansion project in June or July, the head of the authority said on Tuesday.

Experts are reviewing the technical aspects of the bids of three consortia received in April before the bid prices are formally unsealed, Authority President Alberto Aleman said at the Reuters Latin American Investment Summit.

"The bids are in a vault in a bank and we expect that sometime in June or July when we are finished with all the technical analysis we will have a public opening of the bids," said Aleman.

"By the end of the year we should have around 96 percent of the contracts awarded and working. The expansion is proceeding very well, very much in the time that we intended."

Impreglio SpA, one of the companies participating in the tender, told investors last month it expected the contract to be awarded in May.

The Authority has previously delayed the award of the contract but Aleman insisted it would not affect plans to complete the expansion by 2014, the centenary of the waterway's opening in 1914.

The canal expects shipping volumes to decline by 5 percent this year due to the global economic slowdown but an increase in transit fees imposed on May 1 should keep revenues flat compared with 2008, Aleman said.

The expansion project, which will allow much larger ships to transit the canal, is being funded by canal's cash flow and $2.3 billion in loans raised from multilateral lenders. (For summit blog: http://blogs.reuters.com/summits/)

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