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Handling the critical phase of Panama Canal expansion

Handling the critical phase of Panama Canal expansion
The $5.25bn expansion of the Panama Canal has entered its most critical years with the conclusion of the new locks construction scheduled for the first quarter of 2015.

The new locks will see the Panama Canal Authority (ACP) prepare for the first post-panamax transit, which will require more complex operations planning systems for the larger vessels that will transit the waterway concurrently with those employed for the present canal locks. The new locks and wider channels will allow the introduction of new segments such as large LNG vessels amongst others.

Over the next 18 months the ACP must define a creative pricing structure to give the route its real value as the new locks come on line, say its officials. This structure must be one that insures that it balances the tonnage transiting between the new and present locks.

In December 2012 Administrator Jorge Quijano has initiated a process of consultations with the maritime industry over a complete change of toll concept with a scheme based on cargo transported versus capacity.   As the formula may not be applicable to all segments, it is likely that the 20 foot standard container will be kept as reference for boxshipping, once the new locks are inaugurated.

The new locks, of 427 m in length, 55 m in width and 18.3 m in depth, will accommodate vessels up to 13,200teu. So far, the expansion programme is 54.5% completed.  The ACP is looking at flooding the locks in the last quarter of 2014 and beginning the tests of water flows, filling and spilling and of the locks. That process could last as much as six months followed by three months of trials and evaluation with vessels of all kinds including panamaxes and post-panamaxes, looking at the first commercial transit by mid-2015.

Quijano is convinced that the expanded Canal will increase Panama’s connectivity and attract investments into the logistics sector as Panama becomes a hub for the continent. However, this is conditional to improving Panama’s education system, preparing technicians for the sector and increasing the teaching of English as there is a lack of professionally trained personnel. These are common complaints the logistics business sector’s leaders from both international and local companies.   The maritime sector comprising the canal, terminals and ancillary businesses, represents 26% of Panama’s GDP and weighs heavily in the country’s economy.

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