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article imageWork to resume on widening of Panama Canal     

By AFP     Feb 19, 2014 in Business

Work to widen the Panama Canal will resume on Thursday, an official said, two weeks after the huge project was suspended over $1.6 billion in cost overruns.

Canal administrator Jorge Quijano told AFP that the consortium involved, Grupo Unidos por el Canal (GUPC), will "resume tomorrow morning as we develop an interim agreement."

Work to expand the canal was suspended earlier this month by the GUPC consortium made up of construction companies Sacyr of Spain, Italy's Salini-Impreglio, Belgium's Jan de Nul and Constructora Urbana of Panama.

The dispute is over $1.6 billion in cost overruns in the project, the main part of which is to equip the canal with a third set of locks.

GUPC wants Panama to add that sum to the initial contract fee of $3.2 billion.

The century-old waterway handles five percent of global seaborne trade.

GUPC claims unforeseen geological difficulties have forced them to spend much more on cement than expected. They say that they based their estimates on data provided by the Canal Authority that were incorrect.

The canal expansion is one of the world's most ambitious civil engineering projects and was due to be completed this year in time for the 100th anniversary of the fabled canal.

The original canal, built by the United States, mostly with workers brought in from the Caribbean, was opened in 1914.

Following the delay, the deadline for completing the work is now December 2015.

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