Negotiators for the Panama Canal Authority and Grupo Unidos por el Canal remain far apart on a deal to resolve a long-simmering billing dispute that would resume work on new locks that are part of the $5.2 billion expansion project.
The project is designed to facilitate international commerce by enabling transits by much larger cargo ships.
The Panama Canal Authority (ACP) issued a statement Tuesday saying that talks have not narrowed differences that have brought construction to a standstill. GUPC, an international consortium of builders, says it has run out of money to pay operating expenses because of $1.6 billion in unforeseen cost overruns and is seeking significant financing assistance from the ACP to keep the project going while they take their case for reimbursement to international arbitration. The ACP has offered to advance a lower amount of money and demanded that GUPC restart work. It has threatened to cancel the contract and switch to another contractor to complete the job, which could further delay the project by anywhere from a few months to a few years, depending on who is making the estimate.
The ACP said it considered this week "critical" for resolving the dispute and restarting construction as soon as possible.
Both sides on Tuesday participated in a conference call where they reviewed issues such as the delivery schedule for the lock gates, which are being built in Italy, and how the remainder of the project is to be completed, the ACP said.
Talks are scheduled to continue Wednesday.
The ACP said the parties appeared close to resolving some components of the dispute last week, but couldn't agree on a final written agreement.
The ACP reiterated that it is prepared to front $100 million for the project if GUPC contributes a similar amount to pay for contractors, labor and other operational costs while talks continue on a definitive agreement.