The Panama Canal Authority, which governs the Panama Canal, is undertaking a historic expansion of the nearly hundred year old waterway. This project will cost somewhat more than $5 billion USD of which about half is being paid for by canal tolls. It is expected to be completed in 2014.
The project is being carried out in order to increase the number of locks and lanes of the canal and, specifically, to build larger locks so that much larger ships can pass. The largest size of ship that can pass through the canal today is referred to in shipping as a Panamax. This contrasts such a boat with a CapeSize vessel which must pass around Cape Horn at the south end of South America in order to pass from Pacific to Atlantic or back.
An interesting note is the 97 year old Panama Canal locks were specifically built to allow the largest US warships of the day to pass. The expansion project was submitted to extensive debate and a national referendum. It passed with 77% in favor on October 22, 2006. The project requires widening and deepening of all shipping channels as well as the construction of the new “third land” locks.
The promise of larger ships carrying goods through the Panama Canal has resulted in the building of new port facilities up and down the East coast of the Americas. New, larger cranes capable of offloading larger vessels are being installed from New York/New Jersey down to ports in Brazil and Argentina. Harbors are being deepened and logistical operations reviewed to prepare for the post 2014 Panama Canal.
Based on the projections of the ACP, it is believed that the expansion project will not only industrialize Panama, but also drastically reduce poverty, elevating the country to true first-world status. While the $5.25 billion price tag is high, the benefits will likely make the Canal’s first big renovation a very important one for the country of Panama.
For more information about Panama’s Canal please contact one of Panama experts today.
This post is also available in: Spanish