Most Panama Canal expansion work halted: waterway official

PANAMA CITY Wed Feb 5, 2014 12:04pm EST

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PANAMA CITY (Reuters) - Most work on a project to expand the Panama Canal has stopped after talks with a Spanish-led building consortium over massive cost overruns broke down, an official from the waterway's administrator said on Wednesday.

Group United for the Canal, a consortium led by Spanish builder Sacyr, said earlier in a statement that the government's canal authority had broken off talks on who will pay some $1.6 billion needed to complete the ambitious project.

The canal is one of the world's most important shipping routes. The entire project was due to cost about $5.25 billion, but the disputed overruns could bump that up to nearly $7 billion.

(Reporting by Lomi Kriel; Editing by Simon Gardner)