The Panama Canal Authority (ACP) has announced an end to talks with contractor Grupo Unidos por el Canal (GUPC) regarding re-commencing the canal locks expansion program.
According to the ACP, a conceptual agreement has been reached subject to documentation, review and final signature by the parties.
"The conceptual agreement falls within the terms of the contract for the design and construction of the third set of locks and does not include any payment for claims," commented the ACP. "GUPC's claims must be processed through the mechanisms within the contract. The price of the contract remains the same and is not modified by this agreement."
"We have reached a conceptual agreement that protects the interests of the Panama Canal, within the terms of the contract and respecting our position," said Panama Canal Administrator Jorge L Quijano. "The third set of locks will be completed within the terms of the contract, as requested from the very first day."
Conditions of the conceptual agreement include the construction of the third set of locks to be completed by December 2015, the 12 Italian-built lock gates must be in Panama by December 2014 (to be transported in staggered shipments), and GUPC will pay US$100 million and ACP will advance US$100 million, which will enable works to resume at a normal pace from March.
Further, the moratorium for the repayment of advances is able to be extended until 2018, subject to fulfillment of certain milestones and other conditions.
