Panama will save more than $100 million with the signing of a new agreement between the government and the Italian conglomerate Finmeccanica to resolve legal differences with subsidiaries Selex, AgustaWestland and Telespazio, but for those under investigation for “irregularities”, the final curtain, or axe has yet to fall.

The signing of the agreement was authorized yesterday by the Cabinet Council, and according to the President, President Juan Carlos Varela came  after two meetings with Italian Prime Minister, Matteo Renzi.

Varela heaped praise on  the work of Panama’s  Ambassador in Italy, Fernando Berguido, and the team of lawyers involved in the talks with Finmeccanica.

"This agreement will defend the interests of our country and correct inherited errors of the past," said Varela.

The original contract, which totaled $250 million, called for Panama to receive helicopters, a coastal radar system and a digital map. That contract was signed during the administration of Ricardo Martinelli and included a $25 million consulting fee that has been classified as a bribe by critics of the contract.

Subsequent investigations and court cases in Italy linking him to a bribery account,  were described by Martinelli as an “ Italian  soap opera.”

Under the new agreement, the contract with Selex for the radars is terminated. Panama will receive a 38.8 million euro refund and a 29 million euro credit from the consortium that can be used for new equipment or for parts of the helicopters.

Finmeccanica has also given a helicopter ambulance to Panama valued at 8.1 billion euros, for  rescue and humanitarian work.

Panama sought to terminate the contract as the radars did not detect the high speed launches used by drug traffickers, which was the primary reason for their purchase.

The Supreme Court also froze the contracts due to those irregularities and the questions surrounding the $25 million “consulting fee” that was to be paid to a shell company linked to Martinelli.

A number of former government officials have been charged for irregularities in the contract, including former Minister of Public Security José Raúl Mulino and former Deputy Minister Alejandro Garuz, related by marriage to Martinelli.

Ambassador Berguido said the helicopter ambulance was to compensate the country for the inclusion of the $25 million consulting fee in the contract, which was never paid. He said that the amount had to be returned to Panamanians in some way.

Along with  the aircraft, comes  training for pilots and maintenance for three years.

The agreement also calls for both Finmeccanica and the Panamanian government to cooperate in criminal proceedings in Panama and Italy that have emerged as a result of the contracts.