Panama Canal works hang in the balance

ACP warned that any suspension of work is not valid, lacks merit and goes against what was established in the contract for the design and construction of the locks.

Meanwhile GUPC has proposed the co-financing of what it calls “unexpected” costs in the contract. It said that the works, which cost over US$100m per month, have reached 70% completion but additional costs have put finishing the work in jeopardy.

“Ultimately, there is no question about the existence of these unexpected costs, but only about who should pay for them, the contractor or the client,” it said.

To this end it has put forward a proposal to “effectively continue and maintain” the work for achieving the project on target for 2015.

And talks are already underway. A spokesperson from ACP, told Port Strategy: “ACP has had its first meeting this week with the Zurich North America, the surety bond under the contract for the third locks, and contractor Grupo Unidos por El Canal.”

They said that at the meeting, the administrator intended to continue talks in the next couple of days and that Zurich North America’s role has now “shifted from being an observer to a participant in the process”.

Apparently, the contract includes a performance bond for US$400m and a payment bond for US$50m to pay pending obligations with subcontractors and labour so there is a lot at stake on the talks.

Meanwhile, ACP said it is rigorously and continuously monitoring work at the site – currently production levels only stand at 25 to 30%.