Panama Canal and lock builder in peace talks over new financing plan

THE Panama Canal Authority (ACP) has been holding talks over a new financing proposal with the Spanish-led consortium building the third set of locks and its insurer to ensure that work does not stop. 

"There is a proposal on the table which the parties have put forward," canal administrator Jorge Quijano told reporters. "It could offer a pretty long-term solution so the work can continue." 

The Spanish-led consortium, Grupo Unidos por el Canal (GUPC), is charged with the main part of the expansion to double the capacity of the waterway. It has now sent a letter to the canal authority saying it will not halt work before January 31. Earlier, it threatened to stop work on January 20 unless the ACP paid US$1.6 billion in cost overruns.

The consortium denied ACP charges that it was attempting to shake down the canal authority for more money, knowing at the outset when it tendered for the job that there would be massive cost overruns.

Not so, said GUPC, which insists its method was only a way to jointly bridge the gap until the dispute could be resolved in a legal setting.

But the ACP claims that GUPC was trying to circumvent the normal claims process and did not provide evidence to justify demands for reimbursement. 

The canal authority has turned down an offer by the European Commission to mediate in dispute with the consortium formed by Spanish builder Sacyr, Italy's Salini Impregilo, Belgium's Jan De Nul and Panama's Constructora Urbana.