January 9 - The Panama Canal Authority (PCA) appears to be unwilling to negotiate over a new proposal by the consortium that is building the canal's new locks, to keep construction work going in the face of its threat to stop work in a dispute over the co
According to reports in the international business media, PCA has rejected a proposal that it pays USD1 billion to continue work on expanding the waterway, and warned the building consortium behind the project that it could bring in others to finish the job.
For the past week, PCA has been arguing with the consortium led by Spanish builder Sacyr over cost overruns in the plan to install a third set of locks for one of the world's most important cargo routes.
Earlier this week, there were signs that the two sides were narrowing their differences. But on Wednesday, Italian builder Salini Impregilo weighed into the debate with a separate proposal that suggested a deal was still some distance away.
Impregilo said it had put forward two alternative solutions that involved the authority paying USD1 billion to the consortium known as Grupo Unidos por el Canal (GUPC) to complete the work.
But that announcement from Italy prompted an immediate rebuff from the administrator of the PCA, Jorge Quijano who is reported to have said that the proposal was outside the framework of agreed contracts.
GUPC had threatened to stop working on the locks on January 19 if it did not receive payment for what it claims are USD1.6 billion cost overruns.
The canal authority rejected those claims last week, but proposed on Tuesday that it and GUPC jointly contribute USD283 million to the project while the claims are adjudicated through the resolution process set out in the contract.
Any work stoppage could further delay completion of the new locks, which has already been postponed twice.
The project was originally scheduled for completion on October 21, 2014 but is unlikely to be finished before the end of of 2015, or longer depending on the outcome of the latest dispute.