MADRID Jan 1 Work on the massive Panama Canal
extension project may be suspended after a clash between the
builders and the Panamanian authorities about $1.6 billion in
cost overruns, according to a statement from the building
consortium on Wednesday.
The cost overruns on the $3.2 billion canal extension, one
of the world's largest construction contracts, should be met by
the Panama Canal Authority (PCA) under the terms of the
contract, argued the consortium comprised of Spain's Sacyr,
Italy's Impregilo, Belgium's Jan De Nul and Panama's
Constructora Urbana, SA.
However, the PCA rejected the complaints by the consortium,
known as Grupo Unidos por el Canal.
"Regardless of what kind of pressure is put on the PCA, we
will maintain our demand that Grupo Unidos por el Canal respects
the contract that they themselves accepted and signed," the head
of the PCA, Jorge Quijano, said in a statement.
The PCA added that if the consortium was not capable of
honoring its agreements, the authority would initiate
"mechanisms from the contract that would allow the work to be
completed." It did not explain what those would be.
The consortium said the overruns were the result of
unforeseen events during construction, something which was
"normal" in these kind of projects.
The group said it believes the PCA had "failed in its
obligations as set out in the contract as well as in the
inexactitude of the information provided to the consortium to
carry out the project."
Under the terms agreed, the PCA has another 21 days to
comply with the requirements, it added, during which work will
No one at Sacyr was immediately available for further
Problems with the Panama project come at a bad time for
Sacyr, whose total net debt stood at 6.9 billion euros at the
end of September, more than three times its market