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Cruise News for the Corporate Travel Professional

January 2014 Edition

Panama Canal Authority Makes $283 Million Proposal to Continue Work

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The Panama Canal Authority (ACP) announced today it has issued a proposal to the contractor of the new locks, Grupo Unidos por El Canal S.A. (GUPC), for the joint contribution of $283 million to the project by the contractor and the canal authority.

According to the ACP, this would allow the work to continue while the claims are resolved under the mechanisms established within the contract.

The ACP said it has forward a proposal to advance $100 million to GUPC with bank guarantees under the mechanisms included in the contract to allow the contractor to meet its pending obligations. The contractor must guarantee these funds through a letter of credit. In addition, ACP said it is also offering a two-month extension on the repayment of $83 million in advances to GUPC.

The ACP is also asking GUPC that commits to pay an additional $100 million (with guarantees) to be used for the project.

The ACP stipulates that the combined amounts of $283 million must be deposited in an account to pay the contractor and subcontractors. The payments will be made against milestones and deliverables by GUPC. One of these includes the shipment to Panama of the four lock gates that should have arrived in November and for which the ACP has already paid 75 percent. Furthermore, the consortium must rehire the workers needed and cancel the notification of intent to suspend the works.