Canal Expansion: Work Continues at 30% Capacity

The construction consortium has not carried out its threat to stop construction work at the end of the prescribed period, while Canal Administration prepares to take on the project.  

Tuesday, January 21, 2014

And on Monday there were revelations of another proposal by consortium Grupo Unidos por el Canal (GUPC) for the continuation of the work, which was that the parties in conflict co-finance the so-called contingency costs, while they wait for a decision from the arbitration proceedings established in the contract, over who should pay.

GUPC insists that "In case of failure to reach any agreement on the financing, construction will not finish on time and there will be a serious delay, to the detriment of all parties" , reaffirming the unity between the comapies that make up the group, an entity that has been compromised because of the seemingly different positions held by the main partners Sacyr and Impregilo .

Meanwhile the Panama Canal Authority (ACP ) rejected third party mediation such as with Vice President of the European Community, Antonio Tajani, noting that the project contract already contains the necessary mechanisms for conflict resolution.

For Tuesday 21 a meeting has been set up between the ACP and GUPC and the insurer Zurich American Insurance, who in early January had said that it is was still too premature to talk about the implementation of the policy.

Other sources indicate that the ACP, should it take over responsibility for the works, would have approximately $1.5 million to finance them.

From various sources on the internet.



More on this topic

Canal Expansion: Construction Company Confirms Stoppage

February 2014

Grupo Unidos por el Canal has announced the suspension of works, with suppliers and workers appearing as the first victims.

There are about three hundred subcontractors and suppliers to the construction consortium GUPC and about 3000 workers, the first to be directly affected by the stoppage of work on the expansion of the Canal, as the company declares insolvency after being unable to pay debts and wages.

Canal Expansion: Works Halted

February 2014

The Panama Canal Authority has reported that the consortium GUPC has ceased trading and it is making preparations to be able to carry on the project under its own management.

The main challenge now facing the Canal Authority (ACP), is "not to make any false move that could cause the loss of the performance bond of $400 million, deposited with the insurer Zurich American," according to an article in Prensa.com.

Canal Expansion: Insurer Opposed to ACP

January 2014

The Zurich insurance company will not disburse the bond to complete the work if the ACP terminates the contract with the consortium Grupo Unidos por el Canal.  

The insurance firm Zurich, which holds a performance bond for the work for $400 million, would not be willing to honor the guarantee if the Canal Authority completes the work using another contractor, part of the ACP's plan B which it is considering.

Canal Expansion: Date of Stoppage Confirmed

January 2014

The construction consortium has reaffirmed its ultimatum to stop the works if there is no agreement with the Panama Canal Authority.  

An article in Prensa.com reports that "Grupo Unidos por el Canal (GUPC), the company under contract for building the third set of locks, is upholding its ultimatum given to the Canal Administration to suspend the most important works on the expansion project, from next Monday. "

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