Deadline looms for Panama Canal expansion dispute | The Augusta Chronicle

PANAMA CITY, Panama — On a hot September morning, a powerful explosion demolished a rocky slope on the banks of the Panama Canal, announcing to the world a massive expansion that the canal’s managers promised would transform global trade when it was completed in 2014.

U.S. ports 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.

Now, more than four years after construction began, these ports and the Panama Canal Authority are facing the prospect of a work stoppage on the $5.25 billion expansion over a financial dispute.

The Spanish-led consortium hired to handle the biggest part of the expansion says it will halt work by Monday if the canal authority doesn’t come up with the funds to cover $1.6 billion in cost overruns. The authority is insisting the consortium live up to the terms of the original contract.

The expansion project, now 72 percent complete, would double the capacity of the 50-mile canal, which carries 5 to 6 percent of world commerce.

“Monday will be a crucial day in the history of the Panama Canal and for us as a country that wants to carry out projects of great size,” Jose L. Ford, the president of the Pa­namanian Cham­ber of Com­merce, Industry and Agric­ulture, said after meeting with canal authority directors this week.

A stop-and-restart of the expansion, one of the largest construction efforts in the world, could mean a delay of months or even years, setting back the arrival of bigger ships, and higher fees, to ports along the entire U.S. East Coast.

via Deadline looms for Panama Canal expansion dispute | The Augusta Chronicle.