Work Stoppage on Panama Canal Avoided ... For Now

Construction consortium says that a stoppage "is not a scenario being considered at this moment."

The Spanish-led consortium handling the Panama Canal expansion released a statement late Sunday that said a stoppage "is not a scenario being considered at this moment," although it warned that remains an option if there is no resolution to a financial dispute.

The group had given Panamanian Canal authorities a Sunday deadline to come up with the funds to cover $1.6 billion in cost overruns. The authority insisted the consortium live up to the terms of the original contract. No agreement had been reached as of Sunday.

Late Sunday, the Panama Canal Authority issued a statement saying the contract allows the consortium to stop work only if the agreed monthly payments by the authority are not disbursed, which has not happened. It said informal negotiations had been conducted over the weekend with Spain's Sacyr Vallehermoso, the company that heads the consortium, but didn't say if there was any advancement.

"We will analyze all the proposals formally presented as long as they are within what was agreed in the contract," the authority said.

The consortium blames the cost overruns largely on problems with the studies carried out by the Panamanian authority before work began. It says geological obstacles encountered while excavating have prevented it from getting the basalt needed to make the massive amounts of concrete required for the expansion. To read more, click HERE.