This content is not available in your region

New war of words over Panama Canal extension

New war of words over Panama Canal extension
Text size Aa Aa

There are renewed tensions over building work to expand the Panama Canal which has been the subject of a dispute over who should pay up for cost overruns.

Earlier it was reported that construction had stopped, with claims that the operator had broken off negotiations aimed at settling the dispute.

But the European consortium carrying out the work then said talks were ongoing and work was continuing.

On Wednesday the Canal Authority went public to accuse the consortium of being inflexible.

“What I do want to make clear is that we will not yield to blackmail. The Panama Canal will comply with all the important stages of the contract and the project will be finished in 2015, with or without (the consortium) GUPC (Grupo Unidos Por el Canal),” said Jorge Quijano, administrator for the Panama Canal Authority.

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).

Early on in the work there was a delay as the authority considered the cement the consortium was using to be of poor quality.

The renewed uncertainty has prompted the Spanish government to call for reconciliation.

“I urge all parties to reach agreement because the worst case scenario is that the extension work will not go on,” said the Spanish Infrastructure Minister, Ana Pastor.

Last month there was some hope for dialogue following a mediation attempt by Spain.

The project – to build new locks to accommodate larger ships of up to 12,000 containers instead of the current 5,000 – is months behind schedule.