THE Government is in talks with Panama and Spanish builder Sacyr to try to resolve a row over a $1.6 billion cost overrun on expansion work on the Panama Canal.
A consortium led by Sacyr has threatened to suspend work on expansion of the canal, which handles 5% of world maritime trade, if the Panama Canal Authority fails to pay for the extra costs.
Panama’s President Ricardo Martinelli warned he would visit Europe to force the consortium — which includes Italy’s Salini Impregilo, Belgium’s Jan De Nul and Panama’s Constructora Urbana as well as Sacyr — to honour its contract to expand the canal.
In a letter to canal authorities dated December 30, Sacyr gave a 21-day deadline before suspending its $3.2 billion contract to expand the capacity of the canal, notably by installing a third set of canal locks.
Sacyr made the contents of the letter public on Thursday in a statement to Spanish market regulators.
The project aims to make the 80-kilometre (50-mile) waterway, which handles five per cent of global maritime trade, big enough to handle new, mega cargo ships that carry 12,000 containers.