Panama Canal work suspended: official

AFP/Panama City

An international consortium in charge of widening the Panama Canal yesterday suspended work on the troubled project, canal administrator Jorge Quijano said. Grupos Unidos por el Canal (GUPC), the Spanish-led consortium, “just a few moments ago suspended the work,” said Quijano. “They put a threat on the table, and yesterday they carried it out,” he added.

The project to widen the canal, one of the biggest civil engineering operations in the world, is due to be completed next year but is bedevilled by a dispute over huge cost overruns.

GUPC has said unforeseen costs total $1.6bn beyond the initial $3.2bn value of the contract.

Quijano said the “inflexible position” of the GUPC stalemated negotiations over who should pay for the extra costs. “We demand the work be restarted immediately,” he said, adding that a proposal to cancel the GUPC contract is still on the table.

A source at Sacyr, the Spanish company leading the work, however said “works are continuing” on expanding the Panama Canal. He denied an assertion by the canal administrator that the works were suspended amid a row over cost overruns.

“Works are continuing and negotiations remain open” between the consortium carrying them out and the Panama Canal Authority, the source added.

In a statement, the company said the consortium would “continue to seek a solution to finance completion of the project and work in 2015.”

The consortium had threatened at the end of December that it would suspend work in three weeks’ time if Panamanian authorities did not provide the extra finance demanded.

That deadline was allowed to pass, but another for progress in the talks ended on Tuesday. The canal, completed in 1914 to offer a short cut and safer journey for maritime traffic travelling between the Pacific and Atlantic oceans, is about 80kms long and is used by 13,000-14,000 ships each year.

The canal facilities are being widened to permit the passage of ships carrying up to 12,000 containers, twice the current limit.

Earlier, the EU’s executive deplored the stalemate as bad news for jobs and the global economy.

Spain’s Public Works Minister Ana Pastor called for an agreement be found quickly “because what is at stake is infrastructure that has an impact not only on the economy (of Panama) but also the world economy.”