New deadline set in Panama Canal escalation cost dispute

24 January 2014

Panama City – The Panama Canal authority and a consortium working on widening the waterway have given themselves until February 1 to resolve a bitter financial dispute that threatens the project, the consortium said Thursday.

The negotiations are aimed at ‘’a long-term solution’’ to complete the project, which has been plagued with delays and disagreements over extra costs and slow progress.

The consortium Grupo Unidos por el Canal (GUPC), led by Spanish builder Sacyr, said it and the Panama Canal Authority (ACP) had decided to ‘’continue dialogue, in principle until February 1, to reach a long-term solution.’’

The move comes after the consortium presented a proposal Tuesday that Panamanian officials said could provide a way out of the bitter dispute.

Since the beginning of the year, work by GUPC has slowed, as ACP and GUPC haggle over cost overruns that the consortium estimates at $1.6 billion (1.2 million euros).

GUPC, which has threatened to shut down the project if it is not paid, accuses  the canal authority of providing bad information on the site’s geology.

After visiting the site Wednesday, Panama’s Minister of Labor Alma Cortes told reporters that work was paralyzed.