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Consortium threatens to stop Panama Canal expansion

Staff writer |
A Spanish-led consortium threatened to halt a $5.3 billion expansion of the Panama Canal, which handles five percent of world maritime trade, because of a row over cost overruns.




Spanish builder Sacyr, leader of the Grupo Unidos por el Canal consortium, said work will stop unless the canal pays $1.6 billion in cost overruns for work on the 80-kilometre (50-mile) waterway connecting the Atlantic and Pacific Oceans, Spanish media report.

"GUPC has formally informed the Panama Canal Authority that it will suspend work if the failures to comply are not put right within the advised period," Sacyr said in a statement to Spanish market regulators.

The consortium said it had set the canal authorities a 21-day deadline before suspending the project to install a third set of canal locks.

On Wednesday, Panama canal administrator Jorge Quijano warned that the canal authority would use contractual mechanisms to ensure the completion of the canal expansion.

"No matter what kind of pressure is exercised against the ACP (Panama Canal Authority), we maintain our demand that Grupo Unidos por el Canal respect the contract that they agreed to and signed," he said in a statement quoted by Panama media.

A year ago, GUPC demanded an extra payment of $1.6 billion from the ACP due to construction delays. Led by Spain's Sacyr, the consortium also includes Impregilo of Italy, Belgian firm Jan De Nul and Panama's Constructora Urbana.


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