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Talks break down over Panama Canal extension dispute

Stock in Italy's Salini Impregilo down 2.12%

05 February, 11:22
Talks break down over Panama Canal extension dispute (ANSA) - Rome, February 5 - The Panama Canal Authority has broken off talks to solve a dispute over cost overruns for a massive extension of the canal with the mostly European consortium commissioned with the project, the consortium said Wednesday.

An Italian company, Salini Impregilo, is part of the GUPC consortium led by Spain's Sacyr that has the $5.25 billion contract to do the expansion and is asking the canal authority to stump up an extra $1.6 billion to cover cost overruns.

Salini Impregilo's share price fell 2.12% on the Milan stock exchange after Wednesday's announcement.

"It is an illogical decision dictated by a rigid attitude that will damage the canal, the country and the Panamanians, as well as causing damage to international trade and all those countries, like the United States, that have made major investments in view of an extension of world trade," read a GUPC statement.

GUPC said the Panama Canal expansion and up to 10,000 jobs are now at risk.