The Spanish-led consortium working on a giant project to expand the Panama Canal is threatening to suspend the operation if its demands for payment are not met.
It has warned the Panama Canal Authority that work will stop in three weeks’ time in a row over who is responsible for cost overruns. Led by Spain’s Sacyr Vallehermoso, the consortium – which also includes Impregilo of Italy, Belgian firm Jan De Nul and Panama’s Constructora Urbana – is claiming $1.6 billion (1.16 billion euros).
The project – to build new locks to accommodate larger ships of up to 12,000 containers instead of the current 5,000 – is nine months behind schedule and is now due for completion in June 2015.
Shortly after work began in 2009, there was a four-month delay as the authority considered the cement the consortium was using to be of poor quality.
The canal’s administrator Jorge Quijano accused the group of trying to force it to renegotiate outside the terms of the contract.