The Panama Canal Authority has awarded a consortium including Empresas ICA SAB a $260.8m excavation contract.

Under the agreement, the consortium will excavate the last segment of a 6.1km access channel connecting the Pacific locks to Culebra Cut under the Panama Canal expansion project.

The consortium has been allowed to finish the work within 3.5 years, the authority said.

Once complete in 2014, the project will build a new lane of traffic along the canal through the new locks, doubling the canal’s capacity and allowing passage for longer and wider ships.

The contract also includes the construction of a 3.5km clay and rock fill dam, a 1.8km cofferdam, a dewatering system and access roads.

The contract is the second-largest in the canal expansion plan after a $3.12bn tender to build two sets of locks-one on the Pacific side of the canal and one on the Atlantic.