The Panama Canal’s administrator said on Tuesday it was holding ongoing talks with a building consortium led by Spain’s Sacyr aimed at jumpstarting a stalled project to expand the waterway, which ran aground amid a dispute over massive cost overruns.
The Panama Canal Authority said in a statement that the talks were focused on resuming construction work on the multi-billion dollar project, which the consortium halted last week, a timetable of deadlines for work to be completed and fresh financing from the parties.
Nearly 6 percent of global trade passes through the century-old canal. Talks are also centered on extending a moratorium on repayments of advances made to the consortium, as well as the date of delivery of massive doors for a new set of locks being built. The companies working to widen the Panama Canal and the waterway’s administrator on Friday each made new proposals aimed at reviving the major public works project.
“We remain open to all the options contemplated in the contract, taking each step in a calm and measured way,” canal administrator Jorge Quijano said in a statement.
The overall canal expansion project was originally slated to cost about $5.25 billion, but the overruns could increase that to nearly $7 billion. It was not immediately clear whether the two sides were converging toward a deal. The canal authority has vowed to complete construction in 2015, with or without the consortium, and has warned it could rescind the contract and find another company to complete the remainder of the project.
The Panama Canal Authority and the consortium, led by Spanish builder Sacyr, have been locked in a bitter feud over costs for weeks that threatens a prolonged, expensive delay. The consortium, which bid $3.12 billion for its contract to build a new set of locks, wants the Canal to pay for $1.6 billion in cost overruns, and the two sides are seeking ways to keep finances flowing in the meantime. Disputes over the expansion of the Canal began soon after the consortium won the bid.
At the time, officials and diplomats expressed concerns over the consortium’s ability to complete the project since its bid was $1 billion lower than that of the nearest competitor.