- ACP proposal:
- To advance $100 million of the contract (with bank guarantees)
- To extend two months the moratorium for the repayment of $83 million by GUPC.
- Total ACP contribution: $183 million
- GUPC must:
- Guarantee payment of $100 million
- Use these funds to pay contractors and subcontractors
- Ship to Panama the four lock gates, of which ACP has already paid 75%.
- All the payments ($283 million) to be done against milestones and deliverables.
Panama City, Panama, January 7, 2014 – To the best interest of each of the parties involved and abiding by the contract, the Panama Canal Authority (ACP) issued a proposal to the contractor of the new locks, Grupo Unidos por El Canal S.A. (GUPC), for the joint contribution of $283 million to the project by the contractor and ACP. This contribution would allow to regularly continuing the works while the claims are resolved under the mechanisms established within the contract.
ACP has forward a proposal to advance $100 million to GUPC under the mechanisms included in the contract to allow the contractor to tend to its pending obligations. The contractor must guarantee these funds through a letter of credit. In addition, ACP is willing to extend for a period of two months the moratorium for the repayment of $83 million in advances by GUPC. These would give an additional $83 million for GUPC.
The ACP proposal totals $283 million.
On the other hand, GUPC must commit to pay $100 million to be used for the project.
The $283 million must be deposited in an account to pay the contractor and subcontractors. The payments will be done against milestones and deliverables by GUPC. One of these includes the shipment to Panama of the four lock gates that should have arrived in November and of which ACP has paid 75%. Furthermore, the consortium must rehire the workers needed and cancel the notification of intent to suspend the works.
About the Panama Canal Authority (ACP)
The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the ACP is based on its organic law and the regulations approved by its Board of Directors. Please refer to the ACP’s website: http://www.pancanal.com/ or follow us on Twitter @thepanamacanal.