(MENAFN- AFP) Panama canal officials and a Spanish-led consortium tasked with expanding the waterway opened negotiations Tuesday on a $1.6 billion dispute that could halt the major project.The Grupo Unidos por el Canal (GUPC) consortium, led by Spanish builder Sacyr, has threatened to suspend work unless the Panama Canal Authority pays for the massive cost overrun by January 20.GUPC executives met with officials at the canal authority's headquarters to discuss figures for a fund to pay for the massive cost overruns. They may also decide on the possibility of resolving the issue through international arbitration.The two sides agreed to sit down for talks after emergency mediation by Spanish Public Works Minister Ana Pastor, who flew to Panama City and held separate meetings on Monday with Panamanian President Ricardo Martinelli, company executives and canal officials."The two parties must define whether the work suspension warning presented by GUPC remains in effect," Pastor said.Sacyr shares, which tumbled when the crisis erupted last week, surged in early trading in Madrid on Monday.The already delayed project aims to make the 80-kilometer (50-mile) waterway, which handles five percent of global maritime trade, big enough to handle new, giant cargo ships that can carry 12,000 containers.GUPC has a $3.2 billion contract to build new locks for the century-old canal, which currently welcomes ships that carry up to 5,000 containers.The construction group includes Impreglio of Italy, Belgium's Jan de Nul and Constructora Urbana of Panama.The consortium began work on a third set of locks in 2009 and expects to complete construction in June 2015, already nine months over the contractual date. Work is about 70 percent complete.But GUPC says it ran into unforeseen costs because the canal authority gave the builders the wrong information regarding the area's geology.The canal authority has countered that the contractor's claims "lack any foundation" and that GUPC must make its complaint in the legal bodies outlined in the contract.
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