Feb 28, 2014

Agreement Reached on Panama Canal Extension

After weeks of discussions, arguments,  and threatened work cessation, it appears the construction of the third set of locks for the canal will resume according to contract.  Apparently the contract price has been maintained and additional claims payments won't be carried out.  Each member of the GUPC consortium will inject $100 million to create a $400 million performance bond which will be maintained in Zurich, and amounts released only to allow financing of work progression.  A payment moratorium may be extended until 2018, if needed, subject to the completion of performance benchmarks and contractual conditions. 

The administrator of the Panama Canal Authority,  Jorge Luis Quijano, reiterated that the third set of locks will be completed within the terms of the original contract, as demanded from day one.  Notification of this same info is reported in as soon as it occurs, according to the ACP's committment to transparency in Panama.  It appears there have been no modifications to the original contract price and additional claims for payments must be addressed according to contractual resolution mechanisms.
The current 12 canal gates that are in Italy must be delived to Panama by December 2014, and will be delivered in staggered shipments.  Completion deadline for the canal expansion is December 2015.