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Focus on Panama

Panama Canal plans new $1.6bn reservoir to address water shortages

Panama Canal Panama Canal neopanamax locks.jpeg
A Panama Supreme Court ruling will allow construction of a new reservoir to increase water availability at the Panama Canal.

The project for the new reservoir would likely take six years to build, according to Panama Canal Authority (ACP) Administrator Ricaurte Vasquez.

The future $1.6 billion reservoir along the Indio River will provide water security in the years ahead to maintain a minimum of 36 transits a day to a maximum of 40 transits a day. The Indio River reservoir will be part of the existing network of artificial lakes built since its inauguration in 1914.

The new reservoir project is estimated to cost $1.2 billion, with an additional $400 million for investments in neighbouring communities.

Panama suffered its worst drought on record last year and reducing fresh water to operate the locks, forcing the ACP to cut transits in half. As the rainy season returns, the canal will increase daily transits to 35 slots after August 5 in both Neo-panamax and Panamax locks.

The Panama Canal was forbidden to build additional water reservoirs for its expansion, outside its watershed, by a legislation passed in 2006 but the recent Court ruling returns the Canal watershed to its original boundaries making the watershed wider and extended and “giving the Canal a territorial assurance we did not have before,” Vásquez said.

Administrator Ricaurte Vasquez discussed the possibility of new water sources in a podcast episode last year

Authorities will still have to consult with and gain acceptance of the project from inhabitants local communities of the new site around the Indio River basin.

ACP Deputy Administrator Ilya Espino, who oversaw the Canal expansion, said that taking with the communities could take one and a half years and the construction another three or four years.