Tuesday, August 19, 2014

As it turns 100, Panama Canal considers another expansion project

As the Panama Canal hits the centennial mark, the $5.3 billion widening project that was delayed by 16 months due to conflicts between the canal authority and contractors is nearing completion. But it might not be big enough.

Canal administrator Jorge Quijano said officials are looking at whether they should dig a fourth set of locks to accommodate a growing fleet of ever larger ships. For example, the 400-meter-long "Triple E" vessels that haul more than 18,000 TEUs, four times more than current ships passing through the canal.

"We are always analyzing the market and as soon as we can economically justify it we will begin," said Manuel Benitez, deputy administrator of the Panama Canal Authority, saying the current expansion is enough for now. "If that changes and the demand exists we are ready to begin."

On Friday, Panama celebrated the anniversary of the French and U.S.-built canal, which cut thousands of miles off global trade routes and made almost $10 billion in tax revenue for Panama since the U.S. relinquished control at the end of 1999.

A new expansion could help maintain an economic expansion that has averaged 9 percent per year since 2007.

"We have renovated the canal, added technology, and we have deepened and widened it for our clients," Quijano said in an interview on Panama's Channel 2. He said a decision about another potential expansion "could come within the next five years."

For more of the Bloomberg story: bloomberg.com


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