The canal expansion project has already been delayed
Arbitrators involved in the dispute between the Panama Canal Authority and the consortium of construction companies working on the canal expansion project say a suspension of work could delay completion of the canal for years, Reuters reports.
The PCA and the consortium, Grupo Unidos Por el Canal (GUPC), are in discussions over cost overruns of more than $1.6 billion.
"If GUPC was to stop work now, the canal would be finished, but not in 2015 - more likely in 2018, 2019, or 2020," a panel of independent international advisers said in a letter written last month that Reuters recently received.
"The enormous losses to (the PCA) - which have not only a severe financial impact but also would seriously damage its credibility and reputation - can only be imagined."
Panama's President Ricardo Martinelli said Wednesday that the work would be completed regardless of the outcome of discussions.
Ricardo Martinelli, President, Panama
Panama has the resources, and will finish work by 2015
"Panama has the resources, and will finish work by 2015 regardless of what happens, rain, thunder or lightning," he said.
The arbiters' letter also said that the consortium's 2009 bid of $3.12 billion for work on the canal locks, which was $1 billion less than any other proposal submitted, was likely too low.
"But horsewhipping or pointing the finger of blame will not save this project," they wrote.
The expansion of the canal, originally scheduled to be completed this year, has been repeatedly delayed.
Canal Administrator Jorge Quijano said last week that the sides had reached a potential solution involving the insurer Zurich North American, but no final agreement has yet been reached.