Panama Canal Authority Gives Consortium One Week Ultimatum

If you don't already consider the Panama Canal expansion project messy and embarrassing, well wait until you hear the latest in this now soap opera-like drama.

A court case in Italy involving ex-premier Silvio Berlusconi, last week dragged Italian construction company Impreglio, one of the four members of the consortium that has stopped work on the expansion project over cost overruns, into the court proceedings with allegations that Impreglio directors paid senior Panamanian politicians bribes to smooth contract wins. 

Then on Wednesday, the Panama Canal Authority (PCA) gave GUPC one week to reach a deal to jump-start a stalled multibillion-dollar expansion of the waterway. Panama Canal Authority (PCA) head Jorge Quijano warned that failure to reach an agreement would leave no alternative but to complete the project without a consortium led by Spain's Sacyr.

"I think we have no more than a week, and that is the target we have set," Quijano said. "If we go beyond that, then we will have no alternative."

The builders stopped work early last week on doubling the canal's capacity while a dispute rages over $1.6 billion (963.9 million pounds) in cost overruns and extra financing for the work, which is 70 percent done and due to be finished next year. Quijano also recently conceded that the dispute has delayed completion of the canal to December 2015.

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