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Agreement reached towards ending dispute over Panama Canal expansion

13/02/14 04:31 CET

The outline of a deal has been reached towards ending a lengthy budget dispute over the stalled project to expand the Panama canal.

It involves a proposal for insurers Zurich to transfer its surety bond into debt as a financing mechanism to go part way to covering a loan to complete the work.

The administrator of the Panama Canal Authority Jorge Quijano, hopes to find a way to fund 1.6 billion dollars (1.17bn euros) of cost overruns.

“We still have some topics to resolve and we are working in that direction. But patience is not finite and in truth we are thinking that this has to end by no later than next week,” Quijano said.

A consortium led by Spain’s Sacyr bid over $3bn (2.2bn euros) for the contract to build two new sets of locks for the canal which connects the Atlantic and Pacific oceans. Sacyr’s bid was one billion less than its nearest competitor.

The dispute over who should fund the overruns has delayed the project by weeks.

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