The Panama Canal Authority, or ACP, said Friday that weeks of negotiations with the GUPC consortium in charge of building a third set of locks for the interoceanic waterway ended with a "conceptual agreement" to finish the project under the terms of the existing contract, which was signed in 2009.

GUPC, led by Spain's Sacyr and Italy's Impregilo, said for its part that paperwork was underway for the deal and predicted it would by concluded shortly.

"GUPC expects the prompt conclusion of the agreement and the financing with the aim of executing the works and completing the project of the third set of locks for the Panama Canal efficiently," the consortium said in a statement released in the Central American country.

The new locks "will be completed within the contract terms, as we have demanded since day one," ACP administrator Jorge Quijano said earlier in a statement.

The agreement, which is "subject to documentation, revision and signature by both parties," according to the ACP, provides that the construction of the new locks must be completed by December 2015, six months later than the most recent finish date announced by the consortium and 15 months after the date established in the contract.

It also provides that the 12 lock gates in Italy, out of a total of 16 required for the project, must be in Panama by December 2014.

"The $400 million performance bond may only be released to Zurich North America (the guarantor of the expansion project) to obtain financing to complete the work," the statement from the canal authority read.

The accord states that GUPC, which also is made up of Belgium's Jan de Nul and Panama's CUSA, "will pay $100 million and the ACP will advance $100 million, which will enable works to regain a normal pace in March."

Under the terms of the agreement, the moratorium for the repayment of advances made to the consortium by the ACP - which total some $784 million, according to official figures - may also be extended until 2018, subject to fulfilment of certain milestones and other conditions, the ACP said.

"The conceptual agreement falls within the terms of the Contract for the Design and Construction of the Third Set of Locks and does not include any payment for claims," which "must be processed through the mechanisms within the contract," the canal authority said.

"The price of the (third-locks) contract remains (at $3.12 billion) and is not modified by this agreement," it added.

The consortium, meanwhile, said the agreement reached in negotiations launched on Jan. 7 responds to GUPC's goal of reaching a co-financing accord to provide funds for the project.

GUPC stopped work on the locks project on Feb. 5, saying the project was plagued by some $1.6 billion in cost overruns and demanding that the canal authority foot the bill.

The canal authority refused to recognize that figure and objected to the work stoppage, noting that the contract provides for independent arbitration of disputes that GUCP and the canal authority can't resolve through negotiations.

GUPC resumed work on Feb. 20, although it added that some issues remained unresolved and were preventing the two sides from putting a definitive end to their dispute.

On Friday, however, Sacyr Chairman Manuel Manrique said in a conference call with analysts to discuss the company's 2013 results that the conceptual agreement would be signed next week, adding that it was satisfactory to both sides and allow the work to be completed in the shortest timeframe possible.

The Panama Canal, which was designed in 1904 for ships with a 267-meter (875-foot) length and 28-meter (92-foot) beam, is too small to handle modern ships that are three times as big, making a third set of locks essential. EFE