Italy embroiled in row over Panama Canal

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Work on the Panama Canal's expansion began in 2009. Photo: VSSmith/Flickr
08:25 CET+01:00
Panama's president warned on Thursday he would visit Europe to force a construction consortium including Italy's Impregilo to drop a threat to suspend expansion work on the Panama Canal, as a row over a $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 for the extra costs.

But 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.

Led by Spain's Sacyr, the consortium also includes Impregilo of Italy, Belgian firm Jan De Nul and Panama's Constructora Urbana.

It began work on a third set of locks for the canal in 2009 and expects to complete construction in June 2015, already a nine-month delay over the date set in the contract.

The new locks will accommodate larger ships with a capacity of 12,000 containers - instead of those with 5,000 containers that are now able to navigate the canal.

Some 13,000 to 14,000 ships navigate the canal each year.

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Canal administrator Jorge Quijano insisted the waterway is working as usual these days despite the threat.

"The important thing now for the international maritime community is that the canal continues to operation efficently and effectively," he said.

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