An agreement has been reached between contracting consortium Grupo Unidos por el Canal, (GUPC) and the Panama Canal Authority (ACP) which the two parties say will allow the completion of the canal expansion project.
GUPC, which comprises Sacyr, Impregilo, Jan De Nul and CUSA Urban Construction, said the variation agreement outlined a plan to co-finance the scheme, which fell into financial difficulty at the start of this year. The dispute between GUPC and ACP related to additional costs of some US$ 1.6 billion on the project linked to ground conditions. The agreement follows a memorandum of understanding to resolve the dispute, signed by the two parties in March.
The agreement provides for the completion of the project by 31 December 2015, with a number of intermediate steps, such as the delivery of the lock gates – eight out of 16 have already been delivered to Panama – by February 2015.
The agreement establishes a co-financing agreement between ACP and GUPC for an additional US$ 100 million each, and the contribution by GUPC of another US$ 400 million resulting from the conversion of a performance bond from project insurer Zurich into additional financing.
At the same time, the various claims by GUPC regarding unexpected costs incurred during the works will be settled through an international arbitration before the Court of Miami, US , which on 21 July this year initiated the discussion on a US$ 180 million tranche.
ACP administrator Jorge L. Quijano said, "What remains now is to continue working with the commitment to complete the expansion which is currently at a 78% progress."
Giuseppe Quarta, CEO of GUPC said, “GUPC will make every effort to ensure that the collaboration with ACP is beneficial and brings the project to a successful completion.”
The ACP added that construction of the third set of locks was 73% complete.
The expansion project, which currently employs some 7,500 people, involves the construction of a new canal that will add to the two existing canals, whose 100th anniversary will be celebrated on 15 August this year. The entry into operation of the new canal will allow the passage of ships known as PostPanamax - 400 m long and capable of transporting 13 twenty foot equivalent unit (TEU) containers.