Grupo Unidos por el Canal (GUPC) proposed co-financing of the unexpected costs to the Panama Canal Authority (ACP) in the Panama Canal expansion contract.
The expansion of the Panama Canal is a strategic project for the world’s economy and global security. Maritime traffic throughout the world is anticipating the opening of the passage for larger ships during the first half of 2015.
GUPC’s proposal consist in co-financing the unexpected costs in order to continue the works and to maintain the work force of about 10 thousand people employed, thereby achieving the completion of the project in 2015 and producing several billion in terms of revenue for Panama.
GUPC stands united; it is not asking for extra profits but for the co-financing of the unforeseen costs pending the decision of the international arbitration.
In this way, the resources financed by the Canal Authority are fully covered by bank guarantees and insurance obtained by the consortium pending the outcome and final decision of the arbitrators on the responsibilities of these extra costs.
The works, which have a cost of over 100 million dollars a month have today reached 70% completion and, technically speaking, nothing prevents GUPC from reaching the finishing line. The only impediment is the difficult financial situation which has arisen due to the additional costs which occurred during the execution of the works, for which GUPC has requested relief.
It is important to underline that these costs are extensively documented and verified by ACP who has always been informed of the situation through an “open book” procedure. Moreover, these additional costs are audited by a specific audit carried out by independent experts. Ultimately, there is no question about the existence of these unexpected costs, but only about who should pay for them, the contractor or the client.
Failure to reach an agreement on co-financing of the unexpected costs will result in a serious delay and it will mean that the works will not be finished in 2015 causing damages to all parties involved.
Instead, an agreement will allow for completion in 2015, as well as an immediate generation of wealth for all Panamanians and significant benefits to all those who, trusting in the Canal expansion as soon as possible, have already made huge investments.
The consortium accepts the mediation of the European Union and European Commissioner Tajani to reach a satisfactory solution and extends the notice given to a possible suspension of work.
Press Release, January 22, 2014