Panama Canal makes counter offer to GUPC to restart worksPanama Canal makes counter offer to GUPC to restart works

The ACP blamed contractor consortium Grupo Unidos por el Canal (GUPC) for the break down in talks last week over cost overruns of $1.6bn on the canal expansion. However, it also said the door remained open for talks and made a counter-proposal on Friday.

“While we prepare to take the actions allowed within the contract to reactivate the project,” said ACP administrator Jorge Quijano. “We maintain open the possibility of reaching an agreement and that is why we are making this effort.”

The authority said the new offer did not increase the contract price or any claims by GUPC, which it said had to be presented through the mechanisms of the contract. Instead both parties would have to contribute the financial resources to complete the project.

“This proposal, subject to the revision and approval of the parties, sets specific dates for GUPC’s delivery of the lock gates and the completion of the works. In addition, ACP would extend the moratorium for the repayment of advances to the extent that GUPC meets the required delivery schedule,” ACP said.

There have been warnings that the expansion project completion could be delayed for several years if agreement is not reached between ACP and GUPC as insurer Zurich American had expressed its intention not to release the collateral bonds if the dispute is not resolved.