Panama, Spain seek to resolve USD 1.6 bn canal row

The governments of Panama and Spain scrambled to resolve a dispute with a consortium threatening to halt expansion work on the Panama Canal over a USD 1.6 billion cost overrun.
Panamanian President Ricardo Martinelli said Spanish Public Works Minister Ana Pastor will fly to the Central American country this weekend to mediate between his government and the construction group led by Spanish builder Sacyr.
The president and minister will meet on Monday with Panama Canal Authority Administrator Jorge Quijano.
Martinelli yesterday spoke after hour-long talks with senior Spanish and Italian diplomats at his presidential office, describing the meeting as "very successful."

"We will keep talking. The three governments want this work to conclude and that any anomaly be corrected," he told reporters.
Sacyr executives may also travel to Panama on today, Martinelli said.

The Grupo Unidos por el Canal (GUPC) consortium, which includes Italian, Belgian and Panamanian companies, has threatened to suspend the project in three weeks if canal authorities fail to pay the massive extra charges.
The project aims to make the 80 km waterway, which handles five percent of global maritime trade, big enough to handle new, so-called mega cargo ships that can carry 12,000 containers.
The suspension threat has infuriated Martinelli, who said Thursday that he would travel to Spain and Italy to tell each government that they have a "more responsibility" to make GUPC honor its contract.

But he said yesterday that his trip would now depend on the results of his meeting with Pastor and Quijano.
"I will go anywhere to defend the interests of Panama," Martinelli said.
Martinelli held talks with Spanish Ambassador Jesus Silva and Italy's charge d'affaires Massimo Tudini along with Panama's Foreign Minister Fernando Nunez and Presidency Minister Roberto Henriquez.
Silva told reporters that the Spanish government offered its "good offices to find a solution."
"This is not a diplomatic conflict," he said. "The Spanish government is not part of this conflict. We will help mediate a solution so that the canal expansion opens to the world."

Tudini said there was "willingness to find a solution through dialogue.