Talks have resumed between the Panama Canal Authority (ACP) and the GUPC consortium over the expansion of the Panama Canal.
Previously talks collapsed as to whom should cover the costs of a US$1.6 billion dollar overrun with both parties attributing the other as responsible for the financing.
Appearing in front of the Panama National Assembly this Tuesday, current head of the ACP, Jorge Quijano, announced that negotiations had resumed, with a final decision to be made at the end of the week.
Quijano made note that both parties had agreed on 14 to 15 points of discussion to resolve the crisis including the dates of tests, set times for instillation of new structures and a payment plan for both suppliers and subcontractors.
According to Euro news, the agreement will involve GUPC transferring a surety bond, made by US insurers Zurich, into a loan which will act as a financing mechanism which will help to cover the cost of the over-runs.
GUCP took out the $400 million bond as required insurance in case they failed to complete the project.
ACP also discussed as to when the consortium should return a $785 million advanced payment provided by the ACP, alongside delivery of the 12th and 16th gates.
The Canal Authority has requested that all gates be transported to Panama by the end of the year. Out of the 16 gates, only 4 have been delivered to Panama, with 4 waiting to be transported and the final 4 being constructed in Cimolai, Italy.
During Tuesday’s statement, Quijano noted that tensions were still-high between the two bodies saying that the issue will not be resolved “until we reach a full agreement in a document we both sign.”
Yet, speaking to Reuters, Quijano pointed out that such a decision must be made immediately, stating that “patience is not infinite and in truth we are thinking this has to end no later than the end of the week” with a date set for February 18.
He re-iterated that ACP would terminate the project if a decision was not made at this time, saying that they were not afraid to make “a hostile move” and that they would continue with the build on their own.
Because of the setbacks Quijano has pushed the completion date back to December 2015. Coast overruns have now raised the cost of the $5.2 billion project to $7 billion.