C.J. Schexnayder/ENR
Dredging will increase storage capacity of drinking water at Gatun Lake.
C.J. Schexnayder/ENR
Pedro Miguel locks and Miraflores Lake sit on Pacific side of canal.

The 38 daily slots allotted to transit through the canal are so valuable that none of these vessels can take a chance of missing it. So they idle, often for days, until their turn comes. If there are any problems, that wait can stretch to weeks, causing enormous costs for the global shipping trade.

The Panama Canal Authority, known by its Spanish acronym ACP, is the quasi-governmental organization that oversees the waterway. ACP has launched a new $5.25-billion construction plan to alleviate such congested situations. The long-anticipated effort includes construction of two new massive sets of locks, excavation of nearly five miles of channel and dredging of several million cu m of material. If all goes as planned, the new waterway will be operational by 2014, the canal’s 100th anniversary.

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  • The new route will ease a bottleneck at the current locks, which raise vessels 85 ft. Improvements now under way will push the total number of daily transits to 40, but there is not room for much more. The recent completion of a $1-billion upgrade has pushed the canal’s operational capacity to about 90%, or about 14,000 transits a year. Going beyond that is unrealistic due to factors like maintenance.

    “If traffic continues to grow, it is going to be very difficult to do ma5intenance without affecting the quality of service,” says Agustin Arias, the authority’s director of engineering and projects. “We don’t have the buffer capacity we had before, because traffic keeps on growing and growing.”

    The authority makes its money on the quantity of goods shipped through the canal, not the overall number of transits. By accommodating bigger ships, the expansion is meant to maximize the amount of goods that can be carried on any one ship passing through the canal. More than a quarter of the goods currently travel as containerized cargo on so-called Panamax-sized vessels. The size—294.13 meters long, 32.31 m wide and a draft of 12.04 m—is specifically designed to take up every available bit of space in the locks while carrying a maximum of 5,000 20-ft equivalent units, or TEUs.

    Yet the exponential growth of international shipping has prompted even larger vessels, so-called post-Panamax ships that can carry up to 12,000 TEUs. Since ships are charged according to the amount of cargo they carry, the canal expansion is all about accommodating post-Panamax ships. “There are about 3,000 ships, about 92% of the world’s fleet, that cannot pass through the current canal,” says Jorge Quijando, the authority’s director of maritime operations. 

    C.J. Schexnayder/ENR
    Additional channel work and dredging will augment the recently completed cut expansion.

    Bidding Plans

    The new locks, with water-saving basins, are the most expensive component. Their combined price tag of $3.35 billion is almost 60% of the entire project cost. The sheer size is the most daunting aspect. “What we are recommending is proven technology that is in use elsewhere,” Arias says. “But no one has ever built locks of the size we are proposing.”

    The new lock chambers will be 427 m long, 55 m wide and 18.3 m deep, more than sufficient for the 366-m-long, 49-m-wide post-Panamax ships. Whereas the existing locks use hinged miter gates, the new locks will use wheeled rolling gates stored within the lock wall.

    ACP developed the cost estimate and schedule with the aid of New York City-based Parsons Brinckerhoff, Broomfield, Colo.-based MWH and Canada’s Clair Murdock Consultants.

    + click to enlarge
    Additional channel work and dredging will augment the recently completed cut expansion.

    New lock access channels will cost $820 million, which includes $400 million for dry excavations, $250 million for drilling, blasting and dredging, plus $170 million in contingencies. Improvements to existing navigational channels will cost $290 million, which includes $90 million to widen Gatun Lake’s channels, $150 million to deepen and widen canal entrances and a $50 million provision for contingencies. Water-supply improvements will cost about $260 million, including $150 million to deepen channels, $30 million to elevate Gatun Lake’s operational level, plus another $80 million for contingencies.

    Both sets of locks will be bid together in one design-build contract. The bidding will be in two stages, with a prequalification process, says Quijando. ACP decided to divide the work into three components—lock construction, dredging and dry excavation—to minimize risk.

    C.J. Schexnayder/ENR
    Current locks cannot fit post-Panamax ships.

    “Because we don’t put everything on the shoulder of a single contractor or a single group, we are minimizing the risk,” Arias says. “We feel we have significant competition, and that will reduce the possibility of problems occurring as well.”

    ACP officials say the expansion will be self-financed, paid for by ship tolls. The authority has unveiled a plan to increase tolls by 3.5% annually over a 20-year period, starting in May 2008. The anticipated increased capacity of the waterway, allied with the toll increase, is expected to bolster annual revenue from $1 billion to $6 billion.

    ACP also will seek some $2.3 billion in loans or bonds to defray costs over the project’s life. ACP estimates that at the project’s peak—between 2009 and 2011, when lock work begins in earnest—the canal will require up to $500 million...

    very day an armada lurks outside the entrances to the Panama Canal. Several dozen ships, mostly gigantic cargo vessels, wait in these waters for their turn to pass through the fabled, but increasingly squeezed waterway.