Talks on Panama Canal dispute fall apart, work on expansion stops

HOUSTON (ICIS)–Talks fell apart on Wednesday in the dispute between the administrator of the Panama Canal and the consortium in charge of the waterway’s expansion, with work halting on the historic project.

The chief executive of the Panama Canal Authority (ACP), Jorge Quijano, said at a news conference that work had stopped to widen the canal and add a third set of locks.

According to news reports, the consortium led by Spanish builder Sacyr Vallehermoso said that the ACP had broken off negotiations on who will pay the $1.6bn needed to complete the project.

However, Sacyr CEO Manuel Manrique told Spanish radio that talks could possibly resume.

Originally expected to cost about $5.25bn, cost overruns could raise the project’s final tab to nearly $7bn.

Quijano said that the ACP had held general talks with other companies about working on the project. Quijano said that it is still open to talks with the consortium, “although the window is closing minute by minute”.

The project has been mired in disputes. The latest disagreements over cost overruns had already reached international arbitration, and talks between the two sides over how to find the additional cash to finish the project had been extended twice.

The dispute comes in the year of the canal’s centenary. The first vessel transit of the 50-mile-wide waterway occurred on 7 January 1914.