Agreement in Panama Canal dispute
The Panama Canal Authority (ACP) has announced the end of talks with the new locks project contractor Grupo Unidos por el Canal SA (GUPC). The discussions led to a conceptual agreement, 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. 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.
The conceptual agreement provides that:
- the construction of the third set of locks is completed by December 2015
- the twelve lock gates in Italy must be in Panama by December 2014, to be transported in staggered shipments.
- the performance bond for USD 400 million may only be released to Zurich North America, to obtain financing to complete the work.
- GUPC will pay USD 100 million and ACP will advance USD 100 million, which will enable works to regain a normal pace in March.
- the moratorium for the repayment of advances may be extended until 2018, subject to the fulfilment of certain milestones and other conditions.
