Panama Canal Expansion is Reset Until 2015
The Panama Canal Expansion Floats On
The termination date for the Panama Canal expansion and widening project has been set back again.
In April this year, the Panama Canal Authority (ACP) admitted that Super Post-Panamax vessel traffic will have to wait until April 2015 earliest, instead of October 2014 as hoped for.
Other missed dates previously include February 2014 and December 2013.
Will the Panama Canal actually get expanded? It simply has to. $5.2 billion has been raised and is being spent. Construction work is moving ahead. And watchers around the world are waiting for their part of the billions in future revenue to be generated.
What is the Canal expansion?
The latest and largest cargo ship design is the Super Post-Panamax. One vessel can haul 12,000 TEUs (twenty foot shipping containers). These ships are too big to transit the Canal. Currently the Canal and its locks can accommodate Panamax ships that carry 4,800 TEUs. Obviously 2.5 times more capacity equates to major monetary gain for both shippers and for the Canal which is financed mainly by ship transit tolls.
The plan is build three new locks – one each at Gatun, Pedro Miguel and Miraflores (Price tag – $3.2 billion). The Canal channel itself will be widened and various infrastructure improvements will be made concurrently (Price tag – $2 billion). For everyone, completion sooner is better.
At home, when the Panama Canal expansion happens, Panama’s value added proposition is raised enormously.
Who are the players?
The ACP gave the overall construction contract to the Consortium Grupo Unidos por el Canal (GUPC) in 2009. The GUPC is made up of Sacyr Vallehermoso (Spain), Jan De Nul (Belgium), Impregilo (Italy) and Constructora Urbana (Panama). (A side note is that GUPC is facing over $54 million in ACP fines for the construction delays to date.)
Engineer Jorge Luis Quijano is in charge of managing lock construction. He has also just been appointed as the next Panama Canal Administrator (the ACP’s top executive position).
Who is waiting for the Super Post-Panamax ships to transit?
Literally everyone in the mega shipping industry. A Super Post-Panama port is being built in Colon on the Canal’s Atlantic entrance (Price tag – $600 plus million).
In the US interest is frenetic. The U.S. Army Corps of Engineers has reported they are involved with 17 port-improvement and expansion projects. Numerous other governmental agencies are involving themselves as well. Cities that have entered the race so far are Baltimore, Charleston, Houston, Jacksonville, Miami, New Jersey, New York, Norfolk and Savannah.
In the States, the Panama Canal expansion is considered to be an important contributor to much-needed economic growth and job creation in the long term.
Other major shipping centers around the world are studying and preparing as well.
Hard figures for ancillary services to be affected, such as employment, overland shipping, distribution, etc. are not yet available. The economic scope is easy to see though and is being referred to in shipping circle jargon as ‘A game changer’.
Will the expansion of the Panama Canal change the world? That is an open question that won’t be answered as soon as once thought.