Spanish firm Sacyr has denied claims that negotiations have failed between the Panama Canal Authority (ACP) and Grupo Unidos por el Canal (GUPC), the consortium in charge of the construction, leading to work halt at the Panama Canal.

In 2009, ACP and the consortium, which contained five firms including Sacyr Vallehermoso of Spain, Impregilo of Italy, Jan de Nul Group of Belgium and Constructora Urbana of Panama, entered into an agreement for the $5.25bn expansion programme of the Panama Canal.

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The expansion project involved construction of the third set of locks that would accommodate ships carrying up to 12,000 containers, compared to the one carrying 5,000 containers presently.

“ACP continues to keep the door open for a reasonable resolution within the contract.”

Work on the project started in June 2009 and is scheduled to be completed in June 2015.

However, the ACP and the consortium recently ran into dispute over $1.6bn in cost overruns.

ACP claimed that talks with the consortium had failed and the work had been halted at the site.

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Sacyr president Manuel Manrique said that no such date had been set for construction work to stop, as the breakdown would put 10,000 jobs at immediate risk.

ACP canal administrator Jorge Quijano said ACP continues to search for a solution, but stressed that the contractor must resume normal activity, which is especially crucial during the dry season in Panama.

“ACP continues to keep the door open for a reasonable resolution within the contract,” Quijano said.

Manrique said there is still room for negotiation with the ACP and that they want an arbitration court to decide who will pay for the extra construction costs.