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

People & Company News

Mercury Marine Launches Repower Financing

Mercury Marine launched a new repower finance program that aims to make it easier for consumers to get the engine performance they want with flexible financing for a broad range of buyers.

Cargo Container Security Alliance Formed

SC-integrity, Inc. (LoJack SCI) and Contguard Ltd. announced a strategic alliance designed to provide their customers with security and real-time visibility of

Knightsbridge Closes Vessel Acquisition Transaction

Bermuda-based Knightsbridge Tankers Limited announced that it has closed the first stage of its vessel acquisition transaction. Knightsbridge has issued 31 million

Legal

Deadliest Weekend Ever in the Mediterranean: UNHCR

More than 700 people fleeing Africa and the Middle East may have drowned in shipwrecks in the Mediterranean over the last week, bringing the death toll this year to almost 3,

Seaspan Agreement with GCII & Blue Water

Seaspan Corporation announced today that it has entered into an agreement with Greater China Intermodal Investments LLC and Blue Water Commerce, LLC to extend

Deal to End Lockout at Canada Uranium Mine

Canadian uranium producer Cameco Corp and the United Steelworkers union, which represents 535 workers at the world's largest uranium mine and a nearby mill,

Finance

Mercury Marine Launches Repower Financing

Mercury Marine launched a new repower finance program that aims to make it easier for consumers to get the engine performance they want with flexible financing for a broad range of buyers.

Maritime Academy Awarded DHS Grant for Arctic Training

Maine Maritime Academy receives $450,000 grant From U.S. Department of Homeland Security for ice navigation and maritime first responder courses for the Arctic Maine

Knightsbridge Closes Vessel Acquisition Transaction

Bermuda-based Knightsbridge Tankers Limited announced that it has closed the first stage of its vessel acquisition transaction. Knightsbridge has issued 31 million

News

China, Sri Lanka to Launch FTA Talks

Chinese President Xi Jinping began a visit to Sri Lanka on Tuesday agreeing to open bilateral negotiations for a free trade pact as Beijing tightened its embrace

Maritime Academy Awarded DHS Grant for Arctic Training

Maine Maritime Academy receives $450,000 grant From U.S. Department of Homeland Security for ice navigation and maritime first responder courses for the Arctic Maine

Knightsbridge Closes Vessel Acquisition Transaction

Bermuda-based Knightsbridge Tankers Limited announced that it has closed the first stage of its vessel acquisition transaction. Knightsbridge has issued 31 million

Government Update

China, Sri Lanka to Launch FTA Talks

Chinese President Xi Jinping began a visit to Sri Lanka on Tuesday agreeing to open bilateral negotiations for a free trade pact as Beijing tightened its embrace

Maritime Academy Awarded DHS Grant for Arctic Training

Maine Maritime Academy receives $450,000 grant From U.S. Department of Homeland Security for ice navigation and maritime first responder courses for the Arctic Maine

Haze and Reduced Visibility at Singapore Ports

Due to the presence of haze, the Maritime & Port Authority of Singapore Port Marine in their Notice No.113 of 2014 dated 15 September 2014 have informed the

Logistics

China, Sri Lanka to Launch FTA Talks

Chinese President Xi Jinping began a visit to Sri Lanka on Tuesday agreeing to open bilateral negotiations for a free trade pact as Beijing tightened its embrace

Cargo Container Security Alliance Formed

SC-integrity, Inc. (LoJack SCI) and Contguard Ltd. announced a strategic alliance designed to provide their customers with security and real-time visibility of

Mideast Crude Tanker Rates Near 3-month Low

Crude oil tanker earnings on the major Middle East route fell to their lowest in nearly three months as a slowdown in business in recent days battered rate sentiment.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Offshore Oil Pod Propulsion Port Authority Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Winch
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: 0.1816 sec (6 req/sec)