Panama rejects E.U. offer to mediate canal disputeBy Juan Zamorano
the associated press | January 21,2014ap photo
A man fishes where a cargo ship sails en route to the Pacific Ocean in Panama City. The Panama Canal is being expanded to accommodate a new generation of larger ships, known as post-Panamax, which have more than twice the carrying capacity of those able to pass through the canal today.PANAMA CITY, Panama — The Panama Canal Authority continued informal talks with a Spanish-led consortium on Monday, seeking to resolve a $1.6 billion cost-overrun dispute that has threatened to halt the biggest part of the project to expand the canal.
The consortium, led by Spain’s Sacyr Vallehermoso, had given a Sunday deadline for the authority to come up with funds or face a work stoppage. But the project continued at the same 25 to 30 percent activity level it has seen since the conflict arose in November, said canal Administrator Jorge Quijano.
The canal authority rejected an offer by the European Union to mediate its dispute with the mostly European construction consortium, United for the Canal.
The contract for completing the third set of locks already includes mechanisms to resolve disputes, and none involve third parties, the authority wrote in an email responding to questions from The Associated Press.
The canal-building group said in a brief statement Sunday that a stoppage “is not a scenario being considered at this moment.”
The Panama Canal Authority has said the contract allows the consortium to stop work only if the agreed monthly payments by the authority are not disbursed, which has not happened.
The project, now three-fourths complete, would double the capacity of the 50-mile (80-kilometer) canal, which carries 5 to 6 percent of world commerce.
Quijano said previously that work on the expansion had declined by 70 percent since November and that hundreds of workers were let go because of the slow pace of the megaproject.
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.
Many experts say the root of the conflict lies in the consortium’s underestimation of the project’s costs when it won the canal expansion contract in 2009 by submitting by far the lowest bid: $3.1 billion for its portion of the job, $1 billion less than a bid led by the U.S. construction giant Bechtel.
U.S. ports have invested billions in dredging, raising bridges and renovating docking infrastructure to accommodate the new generation of larger ships that could pass through the expanded canal.MORE IN Wire NewsHARTFORD, Conn. — Richard C. Full StoryVATICAN CITY — Pope Francis rightly got credit for helping bring the U.S. Full StoryMAIDUGURI, Nigeria — Islamic extremists killed 35 people and kidnapped at least 185 in an attack... Full Story
- Most Popular
- Most Emailed
- RICHARD'S POOR ALMANACK: In 1972, Christmas bombing of North Vietnam ordered by President Richard Nixon, most lethal strikes of the war; in 1989, U.S. invades Panama to depose, arrest and charge Gen. Manuel Noriega with drug trafficking, racketeering.
- TOMORROW'S HEADLINES TODAY: Gov. Peter Shumlin announces demise of his single-payer health insurance initiative; convicted first-degree murderer Alan Prue sentenced to 50 years for killing teacher Melissa Jenkins; veterans chafed about park naming snub.
- RICHARD'S POOR ALMANACK: In 497 BC, first Saturnalia festival celebrated in Rome, Scandinavians retain 'Yule Goat' as symbol of season, Krampus, evil side of holiday cheer, terrorizes children into better behavior, more advice from Christopher Hitchens.
- RICHARD'S POOR ALMANACK: In 533 AD, Byzantine Emperor Justinian I gets the old empire back together again routing the Vandals from Carthage; in 1890, Lakota Chief Sitting Bull is killed at his home in South Dakota; in 1970, Soviets land probe on Venus.
- DUANE CARLETON: Rutland Herald Events Editor George Nostrand interviews musician Duane Carleton, whose new CD 'A GIRL LIKE THAT' drops Thursday, Dec. 18, 2014, and will be celebrated that evening with a show at 9:30 p.m. at Killington's Pickle Barrel.
- RICHARD'S POOR ALMANACK: Sigisimund, king of Hungary, creates Order of the Dragon to defend the West against Ottoman Turks; Chong Ho escorts 300 virgins to China; J. Bruce Ismay born this day, built Titanic, gets free trip, does not go down with the ship.