Between Post Panamax and a third lane: the Panama Canal is expanding

Between Post Panamax and a third lane: the Panama Canal is expanding

Giuseppe Acconcia | Journalist focusing on the Middle East
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The expansion of the passage between the Atlantic and the Pacific, inaugurated on June 26, should allow for a significant increase in vessel traffic, despite some criticism about the environmental impact of the works, which will have to "compete"" with the Suez Canal as well asnew projects involving Nicaragua and Colombia

On June 26, 2016, the Panama Canal extension was inaugurated. The Cosco Shipping Panama and Cosco Houstan container ships were the first to cross the canal following construction. The total cost was €5 billion. Construction started in 2006 and was carried out by the consortium Gruppo Unito per il Canale (GUPC) which includes the Italian company Salini-Impregilo, which owns 48% of GUCP, the Spanish company Sacyr, the Belgian company Jan de Nul and the local company Cusa. According to analyst estimates, this large project will allow for a 30% growth in profits for Panama. Each day, 35-40 vessels will pass through the recently opened Canal. In one year, the canal will see 13,000-14,000 transits travelling to 160 countries and 1,700 ports: 5% of the world’s maritime traffic. According to Panamanian authorities, revenue will increase from the current $2 billion per year to up to $6 billion, 10% of the country’s GDP. However, there has been no lack of controversy during construction in terms of its environmental impact. Not just this: with the designs of the Canals that should be constructed in Nicaragua and between the Caribbean and Colombia, a real "War of Canals" has broken out in relation to the increase in maritime traffic.

The construction

With the Panama Canal expansion project, a third lane has been added to the existing 2. Now, each section of the Canal has 3 side basins, for a total of 9 basins for each sluice. The Panama Canal extension project has included the construction of 2 sluices, on the Atlantic side and on the Pacific side, which will have the function of lifting vessels allowing the Canal to be crossed in a very small amount of time: less than 2 hours. This work will allow the passage of large Post Panamax vessels, with a capacity of 12,600 TEU (a 20-foot equivalent unit that measures the capacity of containers), 366 meters long and 49 metres wide. Not only that: according to the Panama Canal Authority (ACP), construction will have a significant impact in terms of employment. In the coming years between 35,000 and 40,000 new job posts will be created.
However, there has been much criticism regarding the environmental impact of the extension of the Canal. ACP has commissioned studies regarding the levels of supply and the salinity of the water, not revealing specific negative effects of the work. However, according to Delft Hydraulics, the work will increase the salinity of the artificial Lake Gatún. This could cause water supply problems for the local population. The main source of drinking water for the Panamanians is Lake Gatún itself. The consortium appointed to carry out construction therefore announced that a system has been studied for reusing the water from this lake to determine significant "savings,," amounting to almost 200 million liters of water. A survey by the New York Times raised doubts, firstly, in terms of water levels to manage the system of dams and reservoirs in relation to the drought affecting the region and secondly, some experts quoted by the US media have raised questions in relation "to the correct combination of all components" of the concrete used for the construction.

From Panama to Suez: the "War of Canals"

The actual increase in traffic in the Panama Canal following the completion of the works could be assessed only in reference to the more general increase in global maritime traffic. In other words, the "War of Canals" will not end with the extension of the Panama Canal. In Nicaragua, by 2020, a canal expected to cross the Central American country from the Atlantic to the Pacific is to be constructed mainly through  Chinese funds. The transport boom of goods by sea has opened up an unprecedented competition between the main canals of the world. It was started by Egyptian President Abdel Fattah al-Sisi who last year inaugurated the extension of the Suez Canal. The extension increase the North African passage from 80 km to 115 km to be crossed in both directions. In other words, freighters and merchant ships can reach the ports of Northern Europe, starting from the Gulf countries in just 14 days instead of the 24 previously required. Waiting times for vessels travelling to Europe have also been reduced: 3 hours instead of 11. Times for crossing the Canal have also decreased (from 18 to 11 hours). The 49 ships per day that crossed the Suez Canal last year are expected to gradually increase to 97 in the coming years. According to Egyptian authorities, the work should double the annual profits made, increasing from $5 to $13 billion by 2023.

The boom in global maritime traffic and of the large vessels, such as Post Panamax, is having significant effects on the competition between the world’s main canals. The extension of the Panama Canal will have positive effects on the local economy but, on the one hand, a constant check of the structural stability of the construction will be required and of the amount of water available to manage the dam system. On the other hand, it will be important to assess the long-term effects of the construction of concurrent canals in Nicaragua and between the Caribbean and Colombia.