With work on the Panama Canal's third set of locks halted because of liquidity problems and failed negotiations over billing issues at a standstill, contractor Grupo Unidos por el Canal said Thursday it offered a new compromise proposal intended to help meet the Canal Authority's demands.
GUPC suspended work, which had already slowed to a crawl, on Wednesday after the Panama Canal Authority (ACP) broke off talks over $1.6 billion in cost overruns the international consortium says were not its fault.
A GUPC statement did not reveal the contents of its proposal, only saying that it "takes into account the concerns of ACP while providing funding necessary to finish the third set of locks."
The extra costs have been a point of contention for more than 18 months, but the issue came to a head in late December when GUPC threatened to shut down construction in three weeks if its demands to be reimbursed were not met. The deadline was pushed back several times as both parties, the project's insurer, and government officials from Panama and Europe repeatedly met to resolve the situation.
Two of the consortium's leading firms, Sacyr and Salini Impregilo are from Spain and Italy, respectively.
The ACP has offered $100 million in up-front payments to help GUPC with its cash flow problems so it can pay vendors and laborers, but the consortium says it needs more aid while the parties take their dispute to international arbitration and courts. The ACP has insisted that it won't negotiate outside the terms of the contract and that GUPC needs to properly file any claims through the dispute resolution process. Officials say GUPC's claims are without merit unless the group can back up the claims with evidence or convince the dispute resolution board or an arbiter of its position.
GUPC repeated its charge that the ACP has failed to make payment on a $50 million invoice for recent work or otherwise assist with funding to keep the project going.
The ACP, for its part, has demanded that GUPC return to work.