SHARE
COPY LINK

CONSTRUCTION

Spain joins talks on Panama Canal costs row

Spain's government said on Friday it was in talks with Panama and Spanish builder Sacyr to try an hammer out a solution to a row over a $1.6 billion (€1.17 billion) cost overrun on expansion work on the Panama Canal.

Spain joins talks on Panama Canal costs row
Spain's Public Works Minister Ana Pastor "is in talks with the government of Panama through its ministry for canal affairs," a ministry spokesman said. File photo: Pierre-Philippe Marcou/AFP

A consortium led by Sacyr has threatened to suspend work on expansion of the canal, which handles five percent of world maritime trade, if the Panama Canal Authority fails to pay for the extra costs.

Panama's President Ricardo Martinelli warned Thursday he would visit Europe to force the consortium — which includes Italy's Salini Impregilo, Belgium's Jan De Nul and Panama's Constructora Urbana as well as Sacyr — to honour its contract to expand the canal.

Spain's Public Works Minister Ana Pastor "is in talks with the government of Panama through its ministry for canal affairs as well as Sacyr, which is the Spanish firm in the consortium," a spokesman for the public works ministry said.

"She is in talks with both sides to find the best solution," the spokesman added.

News of the suspension threat caused shares in Sacyr to plunge 8.95 percent on Thursday to close at €3.43.

The stock was down 6.18 percent at €3.218 in early afternoon trading.    

"Panama is a country that is close and friendly towards Spain, and we share the desire and interest to find a solution as soon as possible," said a spokesman for Spain's foreign ministry.

In a letter to canal authorities dated December 30, Sacyr gave a 21-day deadline before suspending its $3.2 billion contract (€2.3 billion) to expand the capacity of the canal, notably by installing a third set of canal locks.

Sacyr made the contents of the letter public on Thursday in a statement to Spanish market regulators.

The project aims to make the 80-kilometre (50-mile) waterway, which handles five percent of global maritime trade, big enough to handle new, mega cargo ships that carry 12,000 containers.

A year ago the consortium expanding the canal, known as Grupo Unidos por el Canal, demanded an extra payment of $1.6 billion from the Panama Canal Authority due to construction delays.

It began work on a third set of locks for the canal in 2009 and expects to complete construction in June 2015, already a nine-month delay over the date set in the contract.

The new locks will accommodate larger ships with a capacity of 12,000 containers — instead of those with 5,000 containers that are now able to navigate the canal.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

CONSTRUCTION

Spanish builders made ‘slaves’ by German firm

Wages below the legal minimum, contracts in a language they don't understand and blackmail tactics to keep them quiet: just some of the problems a group of Spanish builders in Holland contracted by a German firm have decided to speak out against.

Spanish builders made 'slaves' by German firm
The builders have just managed to get their hourly wages up from €6 to the legal minimum of €8 an hour. Photo of construction work:Shutterstock

"They want us because we're a cheap workforce," one of the builders who prefers to remain anonymous admits.

Since beginning work with a German firm on road crews in the Netherlands in the spring of 2013, this group of Spanish migrant workers have been bottling up their discontent and frustration.

They've just managed to get their hourly wages up from €6 ($8) to the legal minimum of €8 an hour after the Spanish embassy in Holland informed local workers union FNV Bouw.

But their precarious working and living conditions have still not been fully addressed.

Having signed work contracts written in Dutch and German, languages none of them speak, their awareness of the clauses surrounding extra time, holidays and sick leave is almost non-existent.

"We have to pay for our own work clothes. If we’re ill we don’t get paid," one builder tells Spanish news agency EFE from the tiny bungalows where they’re all housed together.

"Most of them are unaware that they have to sign up to the local town hall to receive social and health benefits," adds Ben Paulides, a local politician who thinks the language barrier is the main factor keeping the Spanish workers in the dark.

The man the builders blame for their poor working conditions is Zeko Rugovac, head of German building firm BS Rugovac Bau Gmbh, the company that brought them over from Spain.

According to the Spanish builders, his exploitative tactics have seen them work more than ten hours a day on the building of a motorway between the Dutch cities of Delft and Schiedam.

"They threaten to send them back to Spain if they speak out," union spokesperson Osman Yildiz told EFE.

Emilio Rincón, a 32-year-old builder from Cádiz who complained, was one of the ones who bore the brunt of "Rugovac's irregularities".

"They told me there was no more work for me and I’m still waiting to be paid my last wages and sick leave," Rincón explained.

But Zeko Rugovac, the Managing Director of BS Rugovac Bau Gmbh told The Local it simply wasn't true Spanish workers with his firm were being paid €6 an hour, or even €8.

He said those workers received between €12 and €13 an hour before tax, and he was willing to provide bank documentation showing this was the case. 

Claims of lower wages from Dutch union FNV Bouw were mere politics, Rugovac said.

"They are afraid of cheap labour coming in from Spain and other European countries," he added. 

Rugovac also said it wasn't true that workers had had to wait for wages. He said the current project in the Netherlands would finish in April and wages for the month would be paid in early May "as is normal in Europe".  

The legal tangle between BS Rugovac Bau Gmbh, the Dutch government body that has ordered the motorway to be built, and A4ALL, which is the group overseeing the motorway's construction, means no one appears willing to take full responsibility for the Spanish workers' precarious situation.

The matter is currently being investigated by Holland's Ministry of Social Affairs.

SEE ALSO: 10,000 jobless Spaniards to be kicked out of Germany

Don't miss stories about Spain, join The Local on Facebook and Twitter.

SHOW COMMENTS