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Panama Canal work stops in $1.6bn row | Panama Canal work stops in $1.6bn row |
(4 days later) | |
The Spanish-led consortium working on a project to widen the Panama Canal has said that work at the site has been halted over a disagreement on cost overruns. | The Spanish-led consortium working on a project to widen the Panama Canal has said that work at the site has been halted over a disagreement on cost overruns. |
The construction group says it is owed $1.6bn (£1bn). | The construction group says it is owed $1.6bn (£1bn). |
The Panama Canal Authority (ACP) said the demand amounted to blackmail. | The Panama Canal Authority (ACP) said the demand amounted to blackmail. |
The new lock, which was due to be completed next year, would allow the passage of larger cargo ships in one of the world's busiest maritime routes. | The new lock, which was due to be completed next year, would allow the passage of larger cargo ships in one of the world's busiest maritime routes. |
Failed talks | Failed talks |
On Wednesday, the consortium - officially known as Grupo Unido por el Canal (GUPC) - denied that construction work had been suspended. | |
It said 10,000 jobs were at risk if there was a stoppage. | It said 10,000 jobs were at risk if there was a stoppage. |
But in a statement on Friday, the group blamed the Canal Authority for failing to extend a negotiation protocol. | But in a statement on Friday, the group blamed the Canal Authority for failing to extend a negotiation protocol. |
In the protocol, the building companies agreed to carry on negotiating without threatening to suspend the work, while Panama promised not to cancel the contract signed by both parties | In the protocol, the building companies agreed to carry on negotiating without threatening to suspend the work, while Panama promised not to cancel the contract signed by both parties |
"While awaiting an agreement to enable the finalisation of construction, work has been suspended on the project," announced the consortium in a statement. | "While awaiting an agreement to enable the finalisation of construction, work has been suspended on the project," announced the consortium in a statement. |
The GUPC says the Canal Authority has also failed to pay an outstanding $50m bill, which would allow the companies to carry on the work in the short term. | The GUPC says the Canal Authority has also failed to pay an outstanding $50m bill, which would allow the companies to carry on the work in the short term. |
But the consortium said it would "continue the efforts to find a joint solution and reach an agreement with the ACP". | But the consortium said it would "continue the efforts to find a joint solution and reach an agreement with the ACP". |
The Panama Canal, linking the Atlantic Ocean to the Pacific, is celebrating its centenary in August. | The Panama Canal, linking the Atlantic Ocean to the Pacific, is celebrating its centenary in August. |
More than 13,000 ships use the maritime shortcut every year. | More than 13,000 ships use the maritime shortcut every year. |
Construction of the canal's expansion was due to be completed in June 2015, nine months behind schedule, with the overall cost of the project estimated at $5.2bn. | Construction of the canal's expansion was due to be completed in June 2015, nine months behind schedule, with the overall cost of the project estimated at $5.2bn. |
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