Panama Canal chief reports progress in dispute
Panama Canal chief reports agreements in principle to solve some parts of expansion dispute
Associated Press
2014-02-12 11:01 PM

PANAMA CITY (AP) -- Panama Canal Administrator Jorge Quijano said Wednesday the agency has reached tentative agreement with contractors on some issues of the issues that have stalled work on the biggest expansion of the waterway in a century.

But Quijano also told a Panamanian chamber of commerce meeting that the Authority might take over the project if no final agreement is reached this week.

The consortium, which is led by Spain's Sacyr SA and includes firms from Italy and Belgium, says that the work has gone $1.6 billion over budget and it has sought to have the Canal Authority pay for the overrun. Quijano has refused, saying the companies must stick to the $3.1 billion figture in their bid.

The dispute has threatened to delay a project that has led ports and shipping companies across the globe to make costly new investments to take advantage of the ability to move larger ships through a waterway already handles 5 to 6 percent of world commerce.

The Panama Canal Authority and the Spanish-led construction consortium leading the expansion blame each other for the overruns. They were negotiating how to pay for the unplanned extra costs when talks broke down.

Other foreign contractors and project managers have expressed an interest in completing the 30 percent of work that remains on the third canal lock, according to canal officials.

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