ACP: Contractor’s Intent to Suspend Work Lacks Merit

marinelink.com
Monday, January 06, 2014
File Photo: Construction underway on Panama Canal.

After analyzing the letter received on December 30, 2013 by the new locks contractor Grupo Unidos por el Canal, S.A. (GUPC), which was made public on January 1 by GUPC, the Panama Canal Authority (ACP) determined that it is not valid and that the arguments raised by the contractor in the note lack legal basis and are not clear. Therefore, it does not give any reasons for the contractor to suspend the work.

In a letter, the ACP reminded the contractor that on December 13, 2013, it requested GUPC to respond, within seven days, to several faults and illegitimate threats to delay the progress of the works. However, despite ACP’s willingness to find a solution to these issues, the consortium did not offer a response. Some of the concerns ACP had included:
 

  • The reduction in the contractor’s personnel;
  • The lack of progress with the three Borinquen Dams, which are part of the contract;
  • The significantly delays in the delivery of the lock gates;
  • The contractor’s apparent intention to slow down performance of the works to match the progress under the PAC4 contract;
  • The lack of progress in the rectification of defective works and, generally, the contractor’s failure to progress the works in accordance with its contractual obligations.


In its letter to the ACP, GUPC refers to various tenets and interpretations of Panamanian law. However, the ACP reminded the contractor that there is nothing in Panamanian law or in the contract signed that gives the contractor any grounds for suspension of the works. That is, the ACP reaffirmed that the contract was agreed to and should be fulfilled according to the rules and regulations of the Panama Canal.

In addition, the ACP also warns in the letter of the wrongful application of Sub-Clause 16.1 of the contract - cited by the consortium to justify the suspension - because this clause provides only the right to suspend the work when the employer has failed to issue payment to the contractor. However, this is not the case and, therefore, such notice of intent to suspend works is not valid. In fact, the ACP pays GUPC within the first 15 days after the invoice is presented, significantly in advance of the contractually-stated period of 56 days.

The ACP reiterated in the letter that the only channels to present claims are clearly established within the contract. A third party decides two of the three methods included in the contract for the resolution of claims. These terms were accepted by GUPC upon signature of the contract.

The ACP also trusts that the contractor is able to comply with the terms agreed upon under the contract. If the contractor does not fulfill its commitment, the contract includes mechanisms to ensure that the project is completed.

The Canal Expansion Program is 72% complete, while the construction of the new locks is 65% complete. GUPC has previously indicate that instead of completing construction on October 2014, as originally established in the contract, the new locks will be finished June 2015.
 

Maritime Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Green Marine, ACPA Partner to Reduce Environmental Footprint

Green Marine and the Association of Canadian Port Authorities (ACPA) have entered into a Memorandum of Understanding with the goal of jointly expanding efforts

SC Ports’ Earnings, Volumes Surpass Plans

July cargo volumes deliver strong start to new fiscal year SC Ports Authority reported 2014 fiscal year-end operating earnings of $14.3 million, 20.7 percent over the organization's financial plan.

Jacques R. Saadé Visits the CMA CGM Columba

During the CMA CGM Columba call in Beirut, Lebanon, on August 19, Jacques R. Saadé, CMA CGM Group's Chairman and Chief Executive Officer, visited the 11,400 TEU ship.

Legal

Refiners Seek Jones Act Workarounds as Crude Export Debate Heats Up

As the first U.S. oil condensate exports head to Asia from the Gulf Coast, crude producers and refiners are exploring ways to get around a century-old law that

China Rejects Manila Protests, Laments Detentions

China rejected Philippine complaints on Wednesday about Chinese survey vessels operating in a gas-rich area of Manila's exclusive economic zone, and has lodged

Lukoil Shipped Canadian Crude from Houston

Russian oil major Lukoil has emerged as one of the first companies to buy Canadian crude re-exported from a U.S. port, shipping one cargo last month to its refinery in Augusta,

Ports

Water Monitoring to Continue at Western Gulf Ports

A water monitoring network that helps keep port traffic moving is the responsibility of the Conrad Blucher Institute (CBI) for Surveying and Science at Texas A&M University-Corpus Christi.

Green Marine, ACPA Partner to Reduce Environmental Footprint

Green Marine and the Association of Canadian Port Authorities (ACPA) have entered into a Memorandum of Understanding with the goal of jointly expanding efforts

SC Ports’ Earnings, Volumes Surpass Plans

July cargo volumes deliver strong start to new fiscal year SC Ports Authority reported 2014 fiscal year-end operating earnings of $14.3 million, 20.7 percent over the organization's financial plan.

Finance

SC Ports’ Earnings, Volumes Surpass Plans

July cargo volumes deliver strong start to new fiscal year SC Ports Authority reported 2014 fiscal year-end operating earnings of $14.3 million, 20.7 percent over the organization's financial plan.

GoM Sale Yields $110m in High Bids

As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, today’s Western Gulf of Mexico Lease Sale 238 attracted $109,

Traders Store Crude for Profit as Contango Takes Hold

Oil traders have begun fixing tankers to take North Sea, West African and Arab crudes to South Africa for storage, hoping for a repeat of the multimillion dollar bonanza they reaped in 2008-2009.

News

Water Monitoring to Continue at Western Gulf Ports

A water monitoring network that helps keep port traffic moving is the responsibility of the Conrad Blucher Institute (CBI) for Surveying and Science at Texas A&M University-Corpus Christi.

Green Marine, ACPA Partner to Reduce Environmental Footprint

Green Marine and the Association of Canadian Port Authorities (ACPA) have entered into a Memorandum of Understanding with the goal of jointly expanding efforts

SC Ports’ Earnings, Volumes Surpass Plans

July cargo volumes deliver strong start to new fiscal year SC Ports Authority reported 2014 fiscal year-end operating earnings of $14.3 million, 20.7 percent over the organization's financial plan.

Government Update

GoM Sale Yields $110m in High Bids

As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, today’s Western Gulf of Mexico Lease Sale 238 attracted $109,

Refiners Seek Jones Act Workarounds as Crude Export Debate Heats Up

As the first U.S. oil condensate exports head to Asia from the Gulf Coast, crude producers and refiners are exploring ways to get around a century-old law that

Russia Sanctions Could Slow Norwegian Arctic Exploration

Western sanctions against Russia may slow down exploration for oil and gas on both the Norwegian and Russian side of the Arctic Barents Sea, lobby group Norwegian Oil & Gas told Reuters on Wednesday.

Logistics

SC Ports’ Earnings, Volumes Surpass Plans

July cargo volumes deliver strong start to new fiscal year SC Ports Authority reported 2014 fiscal year-end operating earnings of $14.3 million, 20.7 percent over the organization's financial plan.

Port of New Orleans Awards Terminal Build Contract

The Board of Commissioners of the Port of New Orleans awarded a $13.3 million construction contract to Metairie, La.-based Hard Rock Construction LLC today for

Panama Canal Updates Maersk on Expansion

Within the framework of the centennial celebration, the Panama Canal Administrator Jorge L. Quijano received a Maersk Line delegation led by Søren Skou, CEO of Maersk Liner Business,

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Pipelines Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.5309 sec (2 req/sec)