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'Internal differences' foil Panama Canal expansion project

Machinery sits idle on Thursday, Feb. 20, 2014, at the construction site of the Panama Canal expansion project in Gatun, Panama.

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By The Associated Press
Thursday, Feb. 20, 2014, 10:03 p.m.

PANAMA CITY — A European-led consortium said on Thursday that work has resumed on a major expansion of the Panama Canal after a two-week shutdown caused by a dispute over who is to pay for $1.6 billion in cost overruns.

The consortium led by Spain's Sacyr said it is following startup procedures that will allow full-scale work to resume “as soon as possible.”

There was little visible activity along the canal, and President Ricardo Martinelli told local media that “there appears to be some internal differences between the various contractors,” which include companies from various countries.

Jorge Luis Quijano, administrator of the Panama Canal, said work would resume on Thursday on the $5.25 billion expansion project that will allow extra-large tankers and container ships to use the canal and cut travel time between Asia and the eastern United States.

However, the central issue in the dispute still must be worked out.

The consortium blames poor planning for the cost overruns. Panama says the company is responsible for any unforeseen costs.

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