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SUNTRACS workers strike – Third Locks Project

The suspension of productive work on the Panama Canal's Third Set of Locks Project that began on April 23rd, after a decision made by the Construction Workers Union (SUNTRACS for its initials in Spanish) while negotiating working conditions with the Panamanian Chamber of Construction (CAPAC), is keeping the construction paralyzed. Once this strike call is suspended by SUNTRACS, progress on the project will be regained.

Regarding recent statements made by ACP, GUPC would like to reiterate this inactivity is out of their control and responsibility. However, we would like to stress that GUPC has made the expected and mandatory notifications, therefore reserving their rights in full compliance with the contract signed between the parties involved.

As expressed by ACP, the impacts can only be assessed after the conflict has ended.

Panama, May 3rd, 2014.

 

Position Statement: Strike by SUNTRACS trade union in Panama – Third set of locks project

Since the announcement of a national strike declared by the National Trade Union of Workers in Industry Construction and Related (SUNTRACS) from today, Grupo Unidos por el Canal (GUPC), the international consortium of leading companies in infrastructure building the project of the Third Set of Locks of the Panama Canal, reports that workers members of the trade union are heeding the strike.

This measure applies in work carried out in the Atlantic and Pacific sides of the Third Set of Locks of the Panama Canal and it is impacting the work schedule of the project.

   

GUPC and ACP sign agreement for completion of Third Set of Locks for Panama Canal expansion

  • The agreement shows to Panamanians that works continue with the high technical quality that GUPC demonstrates.
  • The agreement reaffirms the commitment of the consortium investors with the largest infrastructure work for Panama and international trade.
  • The continuation of the project sends a positive message for companies anticipating the expanded Canal, and for the world. 

Panama, March 14, 2014.

Grupo Unidos por el Canal (GUPC), the consortium of leading international construction companies, and the Panama Canal Authority (ACP) have signed an agreement to facilitate the funding and continued construction of the Third Set of Locks for the Panama Canal Expansion for the benefit of the national economy and global trade.

The agreement supports a cofinancing concept that the Consortium has been pursuing to ensure the cash flow to the project completion in the face of circumstances encountered during the project.

The principal terms of the agreement generally follows the of conceptual agreement reached two weeks ago, following exceptional efforts by the Consortium to continue work on the project despite difficult conditions.

The agreement, within the terms of the contract and applicable law, provides among other things as follows:

  • GUPC and ACP are contributing $100 million each.  GUPC is arranging $400 million in financing that involves international lenders and also the insurer Zurich, which also signed the agreement.
  • There is an extension of the financial moratorium related to certain payments to facilitate investment on the project.
  • The remaining locks gates that are in Italy will arrive to Panama in phases, through transportation on staggered shipments.
  • The MOU also provides for a completion at the end of 2015. 

The claims for cost overruns will continue its proceedings on arbitration agencies provided in the contract. This way, the Panamanian people, the country and world trade will benefit from the expansion.

The project of the Third Set of Locks, one of the most important infrastructure projects in the world, already has advanced the works to 70% completion. The Consortium is moving to finish the works with high quality and efficiency.

About GUPC

Grupo Unidos por el Canal, S.A. (GUPC SA) is the contractor for the design and construction of the Third Set of Locks - Home Project Canal Expansion Program. The group's technical capacity and experience in infrastructure projects in various countries of the world are ensuring that this project will be conducted with the highest standards of quality in the stipulated time.

GUPC is formed by Sacyr of Spain, Salini - Impregilo of Italy, Jan De Nul of Belgium and Constructora Urban, SA (CUSA) of Panama.

   

GUPC announces conceptual agreement on Panama Canal Third Set of Locks project

Panama, 27 February 2014

Grupo Unidos por el Canal (GUPC), the consortium of leading international construction firms, announced the close of negotiations with the Panama Canal Authority (ACP) on a final conceptual agreement to resolve the funding issues affecting for the Third Set of Locks for the Panama Canal expansion project.

The agreement is consistent with the terms of the Contract and applicable laws, as GUPC emphasized throughout the negotiation process.

The agreement meets the GUPC aim of a comprehensive approach to provide funding for the project through a co-financing arrangement that facilitates the completion of the works pending the outcome of arbitrations to allocate final responsibility for additional costs impacting the project. The agreement is subject to a documentation process that has is already well underway with signature anticipated in the near future.

The development is the latest step in a series of negotiating phases culminating in the agreement. GUPC looks forward to prompt conclusion of the agreement and funding and implementation for the efficient completion of the Third Set of Locks.

   

GUPC resumes works on the Third Set of Locks and expects to sign a final agreement with the ACP in the short term

Panama, 20 February 2014

Grupo Unidos por el Canal (GUPC), the consortium of leading international construction firms, resumed works on the Third Set of Locks on Thurday. The resuming of the works is done following a procedure that will allow the project to be in full swing in the shortest time possible. In parallel, GUPC maintains open communication with the Panama Canal Authority (ACP) in order to sign the agreement in coming days.

The parties are engaged in intense negotiation and made progress on Wednesday on key issues that would allow the funding and payments of subcontractors and workers for the Third Set of Locks Project.

Since the expiration of a negotiation protocol that interrupted the talks and the works early this month, the parties have exchanged various proposals. GUPC reached a first agreement with ACP on Tuesday of last week. The dialogue between the parties has been ongoing and GUPC continued to advance comments and proposals daily, resulting in the latest agreement on Wednesday.

GUPC continues negotiations to reach a long term agreement that follows the applicable contract and laws, and provides funding for project completion in 2015.

   

GUPC maintains hope for Canal Agreement

Panama, February 7, 2014

GUPC, the consortium of leading international construction firms, has signaled hope for an agreement with ACP to resolve the funding issues affecting for the Third Set of Locks Panama Canal expansion project.

While cautioning that there are still issues to be resolved, GUPC confirmed that talks with ACP are ongoing and expected to continue into next week. GUPC confirmed that it had delivered a proposal yesterday that reflected ongoing efforts to adapt to ACP concerns expressed throughout the negotiations, while also seeking reasonable financial equilibrium as required. GUPC already has invested $300 million of its own shareholder funds beyond its obligations and has offered to fund and finance more, balanced with collaboration from ACP in a co-financing arrangement. The funding would facilitate completion of the works pending the outcome of arbitrations to allocate final responsibility for additional costs.

In addition, GUPC confirmed that coordination continues to advance regarding the participation of insurer Zurich, as well as ACP. GUPC also remains open to involving a facilitator or mediator, depending on the outcome of ongoing talks. GUPC has taken a series of positive steps over the past month to encourage an agreement and provide for payments to subcontractors and workers and the continuation and completion of the works. GUPC is continuing to exercise restraint and seek agreement notwithstanding the difficult circumstances created by the lack of a negotiation protocol, which expired earlier this week.

GUPC continues to seek a resolution.

   

GUPC Continues to Advance Solution Despite Forced Suspension of Works on Panama Canal

Panama, February 6, 2014

GUPC continues its efforts to find a solution and reach an agreement with ACP, and has delivered a new proposal that takes into account the concerns of ACP while providing funding necessary to finish the Third Set of Locks project.

Pending an agreement, works on the Third Set of Locks Project for the Panama Canal extension have been suspended expressly due to the refusal of ACP to extend a Negotiation Protocol aimed at reaching a solution to permit the continuation and completion of the works. With no founding support for the project, GUPC issued an initial notice of suspension on December 30, 2013 and chose voluntarily to defer the suspension of the works as a sign of good faith in an effort to facilitate negotiations.

GUPC proposed and agreed to a Negotiation Protocol with ACP to protect the project from suspension and from ACP's threats of termination. GUPC proposed to extend the Protocol in a continued effort to reach a solution. ACP refused, and the Protocol expired. Moreover, ACP has failed to pay a pending $50 million invoice despite all impediments being removed, or otherwise assist in funding the costs of the project needed to pay subcontractors and workers.

Despite these circumstances, GUPC continues to seek a co-financing agreement, in conformity with applicable contracts and laws as always, with the aim of a collaborative and immediate resolution. An agreement is the only solution that the immediate continuation of the works and the earliest and most efficient completion of the project for the benefit of ACP and Panama.

   

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