Canal says extends talks with consortium to Feb. 4
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[February 01, 2014]
By Lomi Kriel
PANAMA CITY (Reuters) — The Panama
Canal Authority said on Friday it had extended a window for talks
with a Spanish-led consortium expanding the waterway aimed at
ensuring work continues on the project, which faces huge cost
The authority said it had agreed to continue talks until February 4
with the consortium, which had threatened to stop work on the
project unless the canal foots the bill for $1.6 billion in
unforeseen additional costs.
Earlier this month, the consortium, which is led by Spanish builder
Sacyr <SCYR.MC>, announced it could stop work by January 20. But it
later said it would not call a halt on the project before at least
the end of January.
"The parties agreed to continue meeting over the weekend to further
evaluate the options aimed at reaching an agreement," the Canal
Authority said in a statement.
Italy and Spain are both committed to finding a rapid solution to
the dispute, Italian Prime Minister Enrico Letta and his Spanish
counterpart Mariano Rajoy said on Monday.
The consortium also includes Italian builder Salini Impregilo <SALI.MI>,
Belgium's Jan De Nul and Panama's Constructora Urbana.
Halting construction on the expansion would be a setback for
companies eager to move larger ships through the century-old
waterway, such as liquefied natural gas (LNG) producers who want to
ship exports from the U.S. Gulf coast to Asian markets.
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The canal and the consortium have traded proposals and
counter-proposals to find ways to raise financing to keep work going
while they deal with the cost overruns via arbitration.
The project was originally expected to cost about $5.25 billion, but
the overruns could raise the cost to near $7 billion.
Work began on the expansion in 2007. The project, which is some 72
percent complete, will create a new lane of traffic along the canal
and double its capacity.
(Editing by Simon Gardner and Meredith
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