Panama geological studies lead to cost overruns

[PANAMA CITY] Flawed geological studies of the terrain of the Panama Canal by its operator has led to big cost overruns in the project to expand the waterway, the building consortium at the centre of a dispute with Panama's government over the plan said.

Last week, the consortium led by Spanish builder Sacyr said that the scheme to build a third set of locks for the canal had incurred additional costs of US$1.6 billion, and demanded Panama foot the bill or work would be suspended.

Panama rejected those arguments, but has hinted it could negotiate some kind of compromise with the consortium, which also includes Italy's Salini Impregilo, Belgium's Jan De Nul and Panama's Constructora Urbana.