Grupo Unidos por el Canal (GUPC), the Panama Canal Authority (ACP) and Zurich North America, the surety bond under the contract for the third locks, are arguing it out over who should pay for additional costs incurred by the project.
After two weeks of negotiations, which saw production levels drop to 25%, almost all activity has ceased.
Now, ACP has sent GUPC a counter-proposal that will enable the continuation of work, which ACP says is especially crucial during the dry season in Panama.
“While we prepare to take actions allowed within the contract to reactivate the project, we maintain open to the possibility of reaching an agreement and that is why we are making this effort,” said Jorge L Quijano, Panama Canal administrator.
The proposal does not increase the contract price or accepts any of the claims, which must be presented following the mechanisms established in the contract. It is based on the parties contributing financial resources to resume work as soon as possible.
Subject to the revision and approval of the parties, this proposal sets specific dates for GUPC’s delivery of the lock gates and the completion of the works.
In addition, ACP would extend the suspension for the repayment of advances to the extent that GUPC meets the required delivery schedule.
GUPC is made up of Sacyr Vallehermoso, Impreglio, the Jan de Nul Group and Constructora.