The biggest infrastructure project in Latin America is charging full speed ahead toward completion. The Panama Canal Authority, knee-deep into a $5.25 billion expansion programme, last month received proposals from three consortia to construct new locks on both sides of the canal and maintain them for three years.
The three bidding groups for the locks each contain a number of international construction and engineering firms: Consorcio CANAL is led by Spanish contractor ACS; Grupo Unidos por el Canal is led by another Spanish construction and concession firm, Sacyr Vallehermoso; and Consortium Bechtel, Taisei, Mitsubishi Corporation is led by the German engineering and construction giant Bechtel.
Locks are water chambers used to raise and lower ships between stretches of water at different levels. The Panama Canal’s two existing sets of locks lift ships 85 feet to the canal’s main elevation. They can’t accommodate the larger ships developed in the decades after the canal opened for traffic, known as post-Panamax vessels.
When completed, the new locks will allow container ships with up to three-times the capacity of the largest vessels currently crossing the channel to reach the East Coast of North and South America. “It is going to be a game changer,” says Michael Horton, a principal at marine engineering firm Moffatt and Nichol.
More than 14,000 ships already travel through the canal each year, equivalent to about 5 percent of the world’s annual seaborne freight.
A number of multilateral institutions, including the Inter-American Development Bank and the World Bank’s International Finance Corporation, have committed $2.3 billion toward the expansion project’s cost. The remainder will be financed with cashflows from operating the canal.