VZCZCXYZ0000
OO RUEHWEB

DE RUEHZP #0539 1891920
ZNY CCCCC ZZH
O 081920Z JUL 09
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3561
INFO RUEHMD/AMEMBASSY MADRID IMMEDIATE 0337
RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
RULSDMK/DEPT OF TRANSPORTATION WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUMIAAA/HQ USSOUTHCOM MIAMI FL IMMEDIATE
RHEHAAA/NSC WASHDC IMMEDIATE
RHEHAAA/WHITE HOUSE WASHDC IMMEDIATE

C O N F I D E N T I A L PANAMA 000539

SIPDIS

E.O. 12958: DECL: 07/09/2019
TAGS: ECON ETRD EWWT PGOV PM PREL
SUBJECT: SACYR WINS CANAL CONTRACT, SIGNALING BROADER
SPANISH INFLUENCE

REF: A. PANAMA 508
¶B. PANAMA 519

Classified By: AMBASSADOR BARBARA J. STEPHENSON FOR REASONS 1.4 (b) & (
d)

¶1. (C) In an elaborate ceremony attended by President
Martinelli and most of the Cabinet, the Panama Canal
Authority (ACP) announced that the consortium led by Spanish
firm Sacyr had won the $3.2 billion contract to build the
third set of locks, centerpiece of the once-in-a-century
Canal Expansion project. This award marks an increased tide
of Spanish influence in Panama. President Torrijos had
established very close ties with the Spanish Royals,
attending a ceremony in Madrid in his honor during
devastating floods last November, during which Spain
announced a gift of two helos to Panama. The Spanish
government also established a regional crisis response center
in Panama. In early June, President Martinelli visited the
King of Spain, and the Spanish delegation at President
Martinelli's inauguration, led by Prince Felipe, was very
well received (ref A). We strongly suspect that the
financially troubled Sacyr was able to offer a surprisingly
low price due to backing from the Spanish government.

¶2. (C) Sacyr's win over consortia led by Bechtel and ACS
(also from Spain) complicates our bilateral relationship on
both political and economic levels. On the political level,
the award casts an unwelcome spotlight on the Aleman family.
Alberto Aleman Zubieta, the ACP Administrator, formerly
served as General Manager of CUSA, Panama's largest
construction company and a junior member of the Sacyr
consortium. In the mid-1990's Alberto Aleman's cousin,
Rogelio Aleman, succeeded him as the GM of CUSA (with Alberto
reportedly selling his shares in the firm). Cousin Jaime
Aleman, who provides legal representation to the winning
consortium, is Martinelli's Ambassador-designate to the
United States. In addition, Alberto's sister, Vicky, is
the wife of a founding partner of Jaime's law firm.

¶3. (C ) As expected, Sacyr offered the lowest price, $3.2
billion, versus $4.3 billion for Bechtel and nearly $6.0
billion for ACS. A Bechtel representative noted that the
concrete cannot even be poured at Sacyr's price, and that
ACS' price indicated that they did not want to win. More
shocking was Sacyr's commanding win in technical points -
4089, versus 3790 for Bechtel and 3974 for ACS. An earlier
press leak by a member of the Sacyr consortium that it had
achieved the highest technical score (ref B) - despite
expectations to the contrary - could cause Bechtel to
question the confidentiality of the process. A
representative of Bechtel's partner, Mitsubishi, told
Ambassador that they would fight the award. Embassy will
consult with Bechtel and further report on the award of this
contract and next steps.
STEPHENSON