Panama Canal Extension Contractors' Work Stoppage

In response to an announcement by Grupo Unidos por el Canal, S.A. (GUPC) that it intends to suspend work from Monday, 20, January 2014, the Panama Canal Authority (ACP) has responded that they consider that decision to be: "Not valid, lacks merit and goes against what is established in the Contract for the Design and Construction of the Third Set of Locks." ACP continue to comment as follows:

"Currently, the production levels are low in the new locks project without any justification.

The suspension announced on December 30, 2013 and reiterated by GUPC Thursday, January 16, 2014 in a letter to the ACP, is based on the wrongful application of Sub-Clause 16.1 of the Contract – cited by the consortium to justify the suspension – because this clause provides the right to suspend
work only 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 work lacks merit. 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.

Furthermore, during the weekend, ACP has maintained communication with the head of Sacyr, leader of the consortium GUPC, to find a solution to the current situation. The ACP will review all proposals presented formally and always within the provisions of the contract.

In addition, the ACP rigorously and continuously monitors the developments in the field in order to keep track of everything that involves a reduction of work and the suspension announced for tomorrow. Today, the ACP Administrator, executives and technical personnel conducted an inspection of the construction site in the Pacific to witness first-hand the progress."