The canals present capacity is strained, at 90% with usage patterns on the uptick.
The $5.25-billion expansion of the Panama Canal started on Sept. 3 with a bang.Officials with the Panama Canal Authority – the quasi-governmental organization that oversees the waterway’s administration often known by its Spanish-language acronym, ACP – blasted away part of a Paradise Hill next to the canal as part of the ceremony to mark the start of work on the project. “We feel confident it will be done in the time we expect to build it and to provide the industry a better canal for the 21st century,” said ACP Administrator/CEO Alberto Aleman Zubieta.
Panamanian President Martin Torrijos was present, along with former U.S. President Jimmy Carter, who signed the 1977 treaty that gave Panama control of the waterway.
Upon completion in 2014, the expansion will more than double the capacity of the historic waterway and a new set of locks will allow the passage of newer post-Panamax vessels.
The canal is currently operating at more than 90 percent capacity and demand for its use is growing. There were 14,194 total transits in fiscal year 2006, according to the ACP. Since August 15, 1914, more than 922,000 vessels have transited the waterway.
The groundbreaking occurred as part of the dry excavation of 7.3 million cubic meters of material near the Pacific entrance of the canal that will be part of a 6.7 km access channel connecting the new Pacific locks and the canal’s navigation channel. Panamanian construction firm CUSA, submitted the winning bid of $41.1 million last month.
CEO Alberto A. Zubieta
The expansion was approved by Panamanian voters in referendum last year and progress on the project has picked up speed in recent weeks. A project manager was named in mid-August, Denver-based engineering and construction company CH2M Hill.
The $3.35-billion effort to construct a new set of locks for the Panama Canal began a week later the release of a request for pre qualification on the design/build job. Four finalists will be narrowed down by the end of the year in anticipation of the formal bidding on the lock construction.
Zubieta said the ACP has been meeting with financial investors to nail down the $2.3 billion in financing that will be needed over the life of the project. The canal authority plans to fund the project with increased tolls for the waterway.
We have been conservative in our estimates,” he said. “Our first bids have come in well under our estimated costs.”