Panama’s president warned on Thursday he would visit Europe to force a consortium to drop a threat to suspend expansion work on the Panama Canal, as a row over a US$1.6 billion cost overrun escalated.
A Spanish-led construction group has threatened to halt the massive project within three weeks if the Panama Canal Authority fails to pay the extra costs, but Panamanian President Ricardo Martinelli said he expected the Grupo Unidos por el Canal (GUPC) consortium to finish the work “without any setbacks, because these cost overruns are irresponsible.”
“I will go to Spain and Italy to demand these governments take moral responsibility for what happened, because it is not possible that a company put huge extra charges on expansion work,” he said.
Martinelli did not put a date on his trip.
Panama Canal Authority administrator Jorge Quijano insisted the waterway is working as usual, despite the threat.
“The important thing now for the international maritime community is that the canal continues to operate efficiently and effectively,” Quijano said.
In a letter to canal authorities on Monday, Spanish builder Sacyr, the consortium’s leader, gave a 21-day deadline before suspending its US$3.2 billion contract to expand the capacity of the canal, notably by installing a third set of locks.
The project aims to make the 80km waterway big enough to handle new cargo ships that carry 12,000 containers.
The overall cost of the project has been estimated at US$5.2 billion.