Panama Canal expansion contractors threaten to suspend work
The association of companies leading the historic Panama Canal expansion project has threatened to suspend work because of financial problems caused by a US1.6 billion cost overrun.
Jamaica is banking on the expansion of the canal due for completion next year, to realise its own Logistics Hub project expected to bring significant investments.
Yesterday, Grupo Unidos pork el Canal issued a statement giving the Panama Canal Authority 21 days to settle the dispute, arguing that the Authority is responsible for covering added costs.
The association said it will continue working in the meantime.
However, an administrator at the canal authority, responded to the association saying the Authority will continue to demand that the companies honour the terms of their contracts.
He said the firms want the authorities to negotiate outside the established terms of their contract.
The group which includes companies from Spain, Italy, Belgium and Panama won the contract to design and build a third set of locks with a US$3.2-billion bid in 2009.
Panama has estimated that the full expansion program will cost US$5.2 billion with the new, wider locks allowing the 50-mile canal to handle ships far larger than what now exists.
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