Canal authority forecasts end to stand off with expansion consortium

AFTER NINE DAYS of work stoppage on the Panama Canal expansion project the Canal Authority has raised hopes of an end to the conflict with the consortium hired to complete the project.

The Panama Canal administrator Jorge Luis Quijano, announced Wednesday, February 12 that an advance in the negotiations may lead to a rapid agreement to resume the enlargement work.

In a visit to the Panama Chamber of Commerce Quijano told the reporters that some details still needed to be hammered out, among which he mentioned for the participation of the Zurich insurance company in any possible agreement.

"Right now what remains to be resolved is the issue of the insurance company, as we know the whole package is the responsibility of the three parties and Zurich has not yet expressed itself emphatically regarding the new proposal but is willing to do so," he said
"We knowthat to finish this deal, they must be present and I feel confident based on what they have said, that they are going in that direction."

He said that in this case they are not dealing with a $100,000 contract but $1.3 to 1.4 billion still to be executed from the total of $5.25 billion initially put out to contract reports Prensa Latina news agrny

Th United Group for the Canal Consortium, (GUPC) made up of the Spanish Sacyr, Italian Impregilo, Belgium Jan de Nul and Panamanian Cusa, has demanded an additional payment of $1.6 billion USD for unexpected cost overruns which the administration does not acknowledge.

Later, La Prensa reported that Quijano told the National Assembly
"These negotiations should conclude by Tuesday. If not, we will have to take another tack," Quijano told the plenary of the National Assembly.
The administrator announced that virtually all aspects that distanced the ACP and the consortium have been resolved in recent days and that, Tuesday, in a conversation of more than one hour with the highest representatives of the companies, they reached an agreeent on the final point, namely the repayment of $748 million developed by the ACP.
The agreement calls for the payment of $100 million from each party and the conversion of a loan for the fulfillment of a $400 million bond.
The plan still has to be approved by Zurich American He said the reduction of activity over the last two months would impact the project, which was already behind schedule.
"The two months of low activity, and these two weeks of zero production can lead us to finish the work in December 2015," he said.
The delay would mean a loss of earnings for the ACP of $95.3 million.