Agreement between Panama Canal, contractors on financing
The Panama Canal Authority (ACP) and the consortium working on the expansion project that will allow larger ships to use the waterway have signed an agreement that incorporates a variation reached in March to the original 2009 contract for the project.
The ACP said the agreement will allow completion of a third set of larger locks for the canal.
Panama Canal Administrator Jorge L. Quijano said expansion of the canal is 78-percent complete, and the new set of locks is 73-percent complete.
ACP and the consortium GUPC — formed by Sacyr Vallehermoso S.A. of Spain, Salini Impregilo S.p.A. of Italy, the Jan de Nul Group of Belgium and Constructora Urbana, S.A., of Panama — signed in March a memorandum of understanding establishing the framework for the completion of the third set of locks project.
ACP said incorporation of the variation last week does not include any payment for cost overruns or claims. GUPC's claims must be processed following the mechanisms established within the contract. Those claims will go through international arbitration.
A statement from Salini Impregilo today said the agreement “definitively released the financing for the completion of the expansion of the waterway” and comes "after months of intense negotiations."
Salini Impreglio said the agreement “provides for the completion of the project by Dec. 31, 2015, with a number of intermediate steps, such as the delivery of the lock gates (eight out of 16 have already arrived in Panama) by February 2015. “
It added, “From the financial perspective, to bring the works to completion, the agreement establishes a co-financing between ACP and GUPC for an additional $100 million each, and the contribution by GUPC of another $400 million resulting from the conversion of the performance bond from the insurance company Zurich into additional financing for completion."
In addition, Salini Impreglio said executive leadership of the third set of locks project has "shifted from the Spanish to the Italians; during the heat of the negotiations, a manager of the Salini Impregilo Group, Giuseppe Quarta, was appointed as CEO of the GUPC consortium."
Quarta, who also expressed his gratitude for the decisions approved by the ACP and thanked all the partners of the consortium, commented: "GUPC will make every effort to ensure that the collaboration with ACP is beneficial and brings the project to a successful completion."
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