Americas News
Panama Could Take over Canal Expansion
The Panama Canal Authority (PCA) said Tuesday it may take over the expansion of the canal if a dispute with the consortium running the project is not resolved, Reuters reports.
PCA head Jorge Quijano said the remaining expansion work will cost about $1.5 billion, a sum the PCA could pay.
The consortium, Grupo Unidos por el Canal (GUPC) has threatened to stop work by January 20 if the PCA does not pay $1.6 billion in cost overruns, but the authority has argued that the extra costs were not outside the parameters of the project.
The PCA has said it would consider claims through arbitration, but Quijano said it could also take over the project if a work suspension lasts 15 days.
"We have to act immediately to make sure that the project isn't suspended for an excessive time," he said.
Manuel Manrique, chairman of GUPC's lead company, Sacyr SA of Spain, said Monday that he expects the consortium to finish the project.
The project was originally expected to cost about $5.25 billion, but overruns could bring the sum up to $7 billion, and the project has also experienced delays.
Panama's president, Ricardo Martinelli, said earlier this month that he might ask the governments of Spain and Italy to push GUPC to resolve the dispute.
