A consortium of construction companies has threatened to halt work expanding the Panama Canal in a dispute over $1.6 billion in cost overruns, according to a story by Reuters news service.
The consortium, known as Grupo Unidos por el Canal (GUPC), had threatened to suspend work unless the Panama Canal Authority (PCA) paid the overruns. The PCA has resisted.
The consortium was set to meet with the PCA and insurers Zurich North America at presstime to discuss the status of the work, including its $600 million bond on the $3.12 billion locks project, the most difficult part of the expansion.
Canal Administrator Jorge Quijano has said the PCA is already in discussions with other third-party contractors in case it cannot resolve its dispute with the GUPC. He estimated the remaining work would cost about $1.5 billion.
GUPC – which also includes Italy’s Salini Impregilo SpA , Belgium’s Jan De Nul and Constructora Urbana from Panama – won the contract to build a third set of locks for the century-old canal in 2009.
The expansion is one of the world’s largest construction projects. It was due to cost about $5.25 billion, but the overruns could bump that up to nearly $7 billion, Reuters reported.