An idle digger is seen at the construction site of the Panama Canal Expansion project on the outskirts of Colon City February 12, 2014. (REUTERS/Carlos Jasso)
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A deal to resume work on the multibillion-dollar Panama Canal appeared in doubt on Thursday, just hours after an apparent breakthrough, in the latest twist in a protracted dispute over massive cost overruns.The Panama Canal Authority said late on Wednesday that the Spanish-led consortium expanding the major world waterway had agreed to restart work first thing on Thursday after a two-week stoppage.A key part of negotiations is the role that insurer Zurich plays and whether it will convert a $400 million surety bond, taken out by the consortium in case the project wasn't completed, into backing for a loan to help raise the $1.6 billion funding needed to finish the project, sources with knowledge of the matter said.Shares in Sacyr rose 4.3 percent on Thursday after news of the agreement to restart work.There has been disagreement within the Spanish government over whether to interfere with the private project, one source with knowledge of the matter said, but it is likely to tweak the conditions of the guarantee because the Sacyr-led contract is such a high-profile one for Spanish business.Under Wednesday's deal, the Canal had agreed to pay the consortium $36.8 million to cover work done in December once works resumed.
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