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Panama Canal update

Countdown to opening of expanded canal

By Michell de la Ossa Prieto

2012-11-23-JC-0528

April 1, 2015 officially marked the start of the 365 day countdown until the first commercial traffic is able to transit the new post panamax locks of the Panama Canal.

The administrator of the Panama Canal Authority (ACP), Jorge Quijano, said the third set of locks, now under construction by the consortium Grupo Unidos por el Canal (GUPC), was due in operation by 1 April 2016.

Mr Quijano was confident the GUPC would complete the work in the scheduled time, saying: “I think it has the ability to do so, it has the will, and we will have to see how we create a favourable environment for it to succeed.”

While the expansion work continues, the ACP decided to submit the GUPC’s claim related to the basalt concrete mixture used in the construction project of the new canal locks to international arbitration.

Arbitration is the third and last stage of the procedure established in the contract for the design and construction of the new locks to settle claims between the owner (Panama Canal) and the contractor (GUPC SA).

Once the date has been decided, this arbitration will be held in Miami, according to the provisions of the contract.

Flooding of the first lock is due to take place in June on the Atlantic side and in August on the Pacific side. Then there are plans to test equipment and carry out navigation tests in December this year or, at the latest, in January 2016, according to Mr Quijano. “Optimistically, the Atlantic section will be completed two months before the Pacific,” he added.

Next phase

There are only six gates of the 16 that make up the third set of locks to be installed. These gates were manufactured in Italy and arrived in Panama in four instalments from 20 August 2013.

Once the 16 lock gates have been installed, the next phase of work will be to connect the electromechanical installations as well as the control mechanisms. As at February 2015 the project to install the third set of locks had advanced by 83 per cent while the entire expansion program had progressed to 86 per cent.

Recently, a public meeting about the proposed tolls was held. Different rates for internal (national) shipping companies and international traders were proposed, once the expanded canal is in operation, hopefully by April 2016.

Among the noteworthy proposals for the national companies is a special rate for transshipment of containers between Panamanian ports. This will entail a new business unit which the ACP hopes will promote the canal’s potential among international shipping companies and provide an opportunity to use an alternative to sea transportation.

The first option for moving containers from ocean to ocean is rail transportation, which also involved land transportation, although the latter is more difficult because of the lack of connectivity between the west side of the canal and the Atlantic.

An industry source said the transshipment of containers between ports by sea was a good opportunity to encourage development in the western Panama Canal area.