By Tom Stieghorst
A consortium led by Spain’s Sacyr Vallehermoso is seeking reimbursement for cost overruns of more than $1 billion.
Two weeks of negotiations have not produced a resolution, the authority said.
Canal Administrator Jorge Quijano said the authority continues to try to find a solution, but stressed that the contractor must resume normal activity, which is critical during the dry season in Panama.
The widening project had been scheduled for completion in mid-2015. Current canal passage is not affected.