Grupo Unidos por el Canal (GUPC), the consortium of international construction companies, and the Panama Canal Authority (ACP) have signed an agreement to facilitate the funding and continued construction of the Third Set of Locks for the Panama Canal Expansion for the benefit of the national economy and global trade.
The agreement supports a cofinancing concept that the Consortium has been pursuing to ensure the cash flow to the project completion in the face of circumstances encountered during the project.
The principal terms of the agreement generally follow the conceptual agreement reached two weeks ago, following exceptional efforts by the Consortium to continue work on the project despite difficult conditions.
The agreement, within the terms of the contract and applicable law, provides among other things as follows:
- GUPC and ACP are contributing $100 million each. GUPC is arranging $400 million in financing that involves international lenders and also the insurer Zurich, which also signed the agreement.
- There is an extension of the financial moratorium related to certain payments to facilitate investment on the project.
- The remaining locks gates that are in Italy will arrive to Panama in phases, through transportation on staggered shipments.
- The MOU also provides for a completion at the end of 2015.
The claims for cost overruns will continue its proceedings on arbitration agencies provided in the contract. This way, the Panamanian people, the country and world trade will benefit from the expansion.
The project of the Third Set of Locks, one of the most important infrastructure projects in the world, already has advanced the works to 70% completion. The Consortium is moving to finish the works with high quality and efficiency.
GUPC, March 17, 2014; Image: Wikimedia