Panama Canal expansion shutdown threatened
The consortium at the heart of a historic Panama Canal expansion project threatened on Wednesday to suspend work due to financial problems caused by a $1.6 billion cost overrun.
The group issued a statement giving the Panama Canal Authority 21 days to settle the dispute, arguing that the Authority is responsible for covering the added costs, but said it will continue working in the meantime.
Canal Administrator Jorge L. Quijano responded with his own communique saying the Authority will continue to demand the companies “respect the contract that they themselves accept and signed.” He said the purpose of the consortium’s warning was “to force the organization to negotiate outside the terms established in the contract.”
Panama has estimated the full expansion program will cost $5.2 billion, with the new, wider locks allowing the 50-mile (80-kilometer) canal to handle ships far larger than those that can now navigate the century-old waterway.
Officials now say the work should be finished by June 2015.
Chinese manufacturing activity shows decline
Chinese manufacturing activity declined in December, adding to pressure on communist leaders who have promised sweeping reforms to revive the slowing economy.
An industry group, the China Federation of Logistics & Purchasing, said Wednesday its purchasing managers index for December declined to 51 from the previous month’s 51.4. The measure is a 100-point scale on which numbers above 50 indicate increasing activity.
“There still is downward pressure on economic growth,” said economist Zhang Lijun in a statement that accompanied the report.
A Communist Party plan issued in November promised to revitalize the economy by injecting more competition into industries dominated by state-owned companies. This week, the ruling party announced the formation of a body led by President Xi Jinping to oversee regulatory changes.
– From news service reports