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PANAMA - A consortium led by Spanish company Sacyr Vallehermoso and Impregilo of Italy submitted the best bid on a contract for the largest chunk of a project to expand the Panama Canal, the Canal Authority said on Wednesday.
The consortium submitted a $3.12 billion bid, which was the lowest among its rivals and below the target price of $3.48 billion, also announced on Wednesday by the canal authority, or ACP.
The bid appears to put the consortium on the inside track on winning the contract, with the ACP saying that it submitted the "best value" proposal, which reflects both price and technical proposals.
The ACP, a government entity that administers the canal and is overseeing the bidding, may take several weeks before announcing a winner.
The contract is to build new locks and water-saving basins. It is the largest portion of a $5.25 billion project to expand the interoceanic canal, which handles about 5 percent of all global trade. The project is expected to take between seven and eight years and create 5,000 direct and 15,000 indirect jobs. It’s one of the biggest ever projects in civil engineering history.
Panama voted in 2006 to widen the 80-kilometer (50-mile) canal, allowing larger ships to travel between the Atlantic and Pacific oceans in less than 10 hours. The expansion will allow much larger ships to transit the canal. The project is scheduled to be completed by 2014.
At the same time, the project is part of Panama's efforts to fight back against sharp economic slowdown by spending more on infrastructure.
"It's very important for Panama and its economy," said ACP President Alberto Aleman.
THE BIDDERS
Officials will award the contract based on each firm's price offer and its technical proposal, and the ACP said Impregilo and Sacyr's consortium scored best in terms of combined value. A technical board will now verify the ACP's assessment before the deal is sealed.
Shares of Impregilo SpA, Italy's No. 1 construction group, rose sharply after the announcement, but later ended 0.16 percent lower. Spanish builder Sacyr edged up 0.21 percent.
Hit by a drop in global trade, Panama's economy is expected to grow about 3 percent this year, down from average annual growth of 8.8 percent in the period 2004-2007.
Of the other two bidders in the process, a consortium including Spanish giants ACS, FCC and Acciona and Mexican company ICA bid $5.981 billion.
A consortium led by privately owned U.S. firm Bechtel bid $4.186 billion. Bechtel had teamed up with Japan's Taisei Corp and Mitsubishi Corp.
