• published: 08 Jan 2014
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The Spanish-led consortium working on a giant project to expand the Panama Canal is threatening to... euronews, the most watched news channel in Europe Subscribe for your daily dose of international news, curated and explained:http://eurone.ws/10ZCK4a Euronews is available in 13 other languages: http://eurone.ws/17moBCU http://www.euronews.com/2014/01/02/pa... The Spanish-led consortium working on a giant project to expand the Panama Canal is threatening to suspend the operation if its demands for payment are not met. It has warned the Panama Canal Authority that work will stop in three weeks' time in a row over who is responsible for cost overruns. Led by Spain's Sacyr Vallehermoso, the consortium - which also includes Impregilo of Italy, Belgian firm Jan De Nul and Panama's Constructora Urbana - is claiming $1.6 billion (1.16 billion euros). The project - to build new locks to accommodate larger ships of up to 12,000 containers instead of the current 5,000 - is nine months behind schedule and is now due for completion in June 2015. Shortly after work began in 2009, there was a four-month delay as the authority considered the cement the consortium was using to be of poor quality. Find us on: Youtube http://bit.ly/zr3upY Facebook http://www.facebook.com/euronews.fans Twitter http://twitter.com/euronews Panama's President Richard Martinelli has threatened to go to Europe to demand a consortium fulfil its contract to expand the canal, which handles 5% of world trade. The cost of the expansion has overrun by $1.6bn (£1bn) and the Spanish-led consortium has threatened to halt work unless the money is paid. The president said: "I will go to Spain and Italy to demand these governments take moral responsibility." Work began on the expansion in 2009. Construction is due to be completed in June 2015, nine months behind schedule with the overall cost of the project now expected to be $5.2bn. Spanish builder Sacyr, the leader of the consortium known as the Grupo Unidos por el Canal (GUPC), has given 21 days' notice to resolve the dispute. Share slump The Panama Canal Authority says the consortium should respect the existing contract, arguing that the cost overruns are due to events that should be "normal" in such a construction project. In a statement quoted on Panama media on Wednesday, canal administrator Jorge Quijano said: "No matter what kind of pressure is exercised against the ACP (Panama Canal Authority), we maintain our demand that Grupo Unidos por el Canal respect the contract that they agreed to and signed." The majority of the work involves building a third set of locks that can accommodate ships that can carry 12,000 containers. At the moment the biggest ships that can navigate the canal carry 5,000 containers. Shares in Sacyr plunged more than 8% in Madrid. The GUPC also includes Impregilo of Italy, Belgian firm Jan De Nul and Constructora Urbana, a Panamanian firm. The Spanish government is in talks with Panama to try and resolve a row over the expansion of the Panama Canal. Spain's public works minister Ana Pastor will fly to Panama this weekend, following a meeting between diplomats on Friday. Work began on the expansion of the shipping hub in 2009, but it has gone over-budget by $1.6bn (£1bn). The group behind the project, led by Spain's Sacyr, has threatened to halt work unless the extra money is paid. Sacyr's chairman Manuel Manrique will also fly to Panama to join in the negotiations. The building group, known as the Grupo Unidos por el Canal (GUPC), is made up of Spain's Sacyr, Italy's Salini Impreglio, Belgium's Jan De Nul, and Panama's Constructora Urbana. It is in the process of constructing a third lock which will allow bigger ships to pass through. It gave a 21 day deadline on 30 December to the Panama Canal Authority to make the extra $1.6 billion payment. If it doesn't, GUPC says it will stop work on the expansion plans. A spokesperson for Spain's foreign ministry said: "Panama is a country that is close and friendly towards Spain, and we share the desire and interest to find a solution as soon as possible". Spain's ambassador to Panama, Jesus Silva, added that all stand to lose out if the contract fell through. On Thursday, Panama's President Richard Martinelli threatened to demand that the building consortium fulfil its contract to expand the canal. The president said: "I will go to Spain and Italy to demand these governments take moral responsibility." Construction is due to be completed in June 2015, nine months behind schedule. The overall cost of the project now expected to be $5.2bn. Building work is now focused on the creation of a third set of locks to accommodate ships that can carry 12,000 containers. The largest ships currently able to navigate the Panama Canal carry 5,000. The Panama Canal handles 5% of the world's maritime trade. The Spanish government is in talks with Panama and Sacyr, the Spanish building firm at the heart of a row over a contract to expand the Panama it