Negotiations break down for Panama Canal financing

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Associated Press

Posted on February 5, 2014 at 5:32 AM

Updated Wednesday, Feb 5 at 6:35 AM

MADRID (AP) — The Spanish-led construction consortium leading the expansion of the Panama Canal says negotiations have broken down for how to finance a $1.6 billion cost overrun and is warning that 10,000 jobs are at risk as a result.

The group known as United for the Canal says in a statement that the halt to talks puts the jobs at "imminent risk" and that the dispute could last years if a solution is not found soon.

Shares of Spanish firm Sacyr SA, which leads the consortium, plunged 6.4 percent Wednesday morning in Madrid. Shares of Italy's Impreglio SpA construction firm, which is also in the consortium, fell 2.4 percent in Milan.

The consortium and the Panama Canal Authority are blaming each other for the overruns.

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