Panama Canal Expansion Update

A dispute between the Panama Canal Authority (PCA) and Grupo Unidos por el Canal (GUPC), the consortium responsible for designing and constructing the third set of locks, pushed the opening to April 2016. The disagreement prevented the $5 billion-plus project from completing to coincide with the 100-year anniversary of the original Panama Canal opening. With the expansion already marred by funding concerns, construction problems, and congestion issues, the PCA reported more bad news last August after a crack appeared on a concrete sill of its third set of locks. Initially, the agency maintained the crack would not affect the timeline, but it eventually admitted the leaks would push the project past the April deadline.

The PCA finally reported some positive news last week as the expansion is 96% complete and the Pacific access channel is almost complete. The GUPC added to this excellent report by reinforcing the steel sill between the lower and middle chamber of the Canal’s Locks to fix the crack. After testing this set of Locks by steadily raising the water behind the gate to the level where the leaks appeared, they are now 95% complete. Next, the GUPC will test the electromechanical components of the project.

These activities should keep the inauguration set for the end of June, but this project always seems to find a new hitch along the way. Unfortunately, the expansion encountered an expected hurdle that will not cause delays, but may hinder container ships. The El Niño weather phenomenon forced the agency to warn of possible draft restrictions to existing Locks by April. If enacted, these restrictions would prevent vessels from loading to full capacity because ships can reach tropical fresh-water drafts of as much as 39.5 feet.

Thanks to El Niño, resources like the Gatun and Alajuela Lakes are suffering from an unusually dry rainy season. Rainfall during 2015 was 36% below average, pushing water levels to record lows. Even water conservation measures local authorities implemented last year did not improve the water levels for 2016. Weather forecasts and water consumption estimates for the coming months predict these lakes will not reach optimum levels before the annual dry season arrives at the Isthmus of Panama.

Although many criticized the PCA‘s management of this expansion, the agency should be commended for this warning. Even if the warning comes to fruition, the restrictions will not be permanent because the new Locks passed tests. The design of the new Locks efficiently reuses water flowing from reservoirs through the Locks and into the Atlantic and Pacific Oceans.