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Panama canal crisis enters crucial stage

Wednesday, January 22, 2014 - 01:24

Jan 22 - Talks are underway to secure a new financing proposal to secure the completion of expansion at the Panama Canal. But as Hayley Platt reports the Spanish-led consortium in charge of the project could still stop work this month.

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The deal deadline has been pushed back until the end of the month. But the threat to stop building an extension to the Panama Canal hasn't gone away. Talks between the Canal Authority and the consortium carrying out the work are taking place. They're trying to reach a new financing agreement after the builders - led by the Spanish firm Sacyr - demanded an extra $1.6 billion for unforeseen costs. Both sides have been playing tough but the Canal administrator says there is hope. (SOUNDBITE) (Spanish) CANAL ADMINISTRATOR JORGE QUIJANO, SAYING: "There's a proposal on the table which the parties have put forward, which might have possibilities. But we are still discussing parts ourselves, separately and jointly." The canal is one of the world's most important shipping routes. And the construction project will double its capacity. Any delay to its completion will be a blow to companies eager to move larger ships through the waterway. Producers of liquefied natural gas exporting from the U.S. Gulf Coast to Asia are particularly keen to use it. But the project was due to cost $5.25 billion - the bill could now come closer to $7 billion. The Canal authority says it'll take over the work if the current builders down tools. But last week it turned down an EU offer to mediate - the attempted intervention perhaps a reflection of how important this project is to global trade. .

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Panama canal crisis enters crucial stage

Wednesday, January 22, 2014 - 01:24