On Dec. 30, the constructors notified the authority that cost overruns due to "unforeseen circumstances" on the project had reached $1.63 billion and threatened the work halt unless officials agreed to pay the amount.

GUPC officials claimed the team met all the project's technical requirements but that underlying issues linked to lack of accurate ACP technical data had led to unexpected cost increases.

The contractor specifically cited discrepancies in the quality of site aggregate excavated for the 5 million cu meters of concrete for the locks.

"GUPC has fully complied with its obligations under the contract and the law and has maintained its ... unequivocal commitment to resolve issues," says Paolo Moder, a GUPC director.

ACP officials said the demand was an effort to negotiate claims outside contract terms and that there was no legal basis for GUPC to suspend work. "No matter what type of pressure is exercised against the ACP, we maintain our request that [GUPC respect] the contract it accepted and signed," Quijano said previously.

That prompted a flurry of meetings between Spanish and Panamanian government officials and project participants.

While distancing themselves from the dispute, officials urged them to reach an accord.

Spain's ambassador to Panama, Jesus Silva, specifically ruled out his country providing financial assistance to the contractor team or to Sacyr.