The Panama Canal Authority and the GUPC consortium hired to build a third set of locks for the inter-oceanic waterway sealed on Friday an accord that envisions completion of the project by December 2015.

Representatives of the parties signed the pact a day after their self-imposed deadline, sources with the authority, known by the Spanish initials ACP, told Efe.

"The way has been completely cleared to complete the project," a GUPC source said.

The additional set of locks is the centerpiece of a $5.25 billion expansion project.

GUPC, which won the locks contract in 2009 with a $3.1 billion bid, is led by Spanish construction giant Sacyr Vallehermoso and Italy's Impregilo, each with a 48 percent stake, and also includes Belgium's Jan de Nul and Panama's CUSA.

The document inked on Friday amends the original contract to include the terms of the agreement reached in March ending a dispute between the parties, the ACP said in a statement.

"What remains now is to continue working with the commitment to complete the expansion, which is currently at a 78 percent progress," ACP Administrator Jorge L. Quijano said.

GUPC halted work on the locks on Feb. 5, alleging a cash-flow crisis stemming from $1.6 billion in cost overruns that it insisted the ACP should cover.

On Feb. 27, the ACP announced that it had reached a conceptual agreement with GUPC to inject fresh funds into the project and ensure completion.

The parties signed in March a Memorandum of Understanding embodying the terms of the conceptual agreement, which stated that GUPC would pay $100 million and ACP would advance $100 million to enable the work to continue.

The incorporation of the MOU into the contract "does not include any payment for cost overruns or claims. GUPC's claims must be processed following the mechanisms established within the contract," the ACP said Friday.

The MOU also mandated that insurer Zurich would convert a $400 million performance bond - which GUPC was required to take out as an insurance policy - into backing for a new loan to help fund the project.

GUPC said this week that is close to securing the loan.

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.

The inter-oceanic waterway handles roughly 6 percent of global trade. EFE