Zurich thinking about Deal to resolve Panama Canal Dispute

The Panama Canal Authority (PCA), a Spanish-led consortium, and Zurich coverage have come up with a likely financing deal to solve the dispute threatening a project to enlarge one of the world’s most vital shipping routes.

The consortium of building groups, led by Spain’s Sacyr, had vowed to forestall work at the waterway via Jan. 20 unless the PCA agreed to foot the bill for $1.6 billion in unexpected extra costs.

“there may be an offer at the desk which the parties have recommend,” Panama Canal Administrator Jorge Quijano advised reporters, regarding talks held on Tuesday. “it could provide a pretty long-term answer so paintings can continue.”

Quijano said that Zurich is looking for a position in tries to resolve the dispute and is weighing up a likely deal. A source with knowledge of the problem stated one option is for the insurer to transform $600 million of surety bonds into a mortgage that could free up money to help to finish the challenge.

Zurich declined to verify this have been proposed. Sacyr, relying on the excessive-profile venture for approximately 1 / 4 of its international revenue, declined to comment.

Halting production on the venture would be a setback for corporations eager to move larger ships through the Panama Canal, which include liquefied natural gas (LNG) manufacturers who want to deliver exports from the U.S. Gulf Coast to Asian markets.

The consortium’s Jan. 20 closing date has been prolonged to the stop of the month, Quijano stated, even though a PCA authentic stated that work at the construction website is walking at about a quarter of ability.

apart from the dispute over the large cost overruns, the parties are searching for methods to come up with extra coins to finish the mission, which is due to be finished in mid-2015.

further delays may want to price Panama millions of dollars in projected sales from toll prices.