Panama Canal expansion update
The GUPC, a consortium of European construction firms, suspended work earlier this year after a financial dispute with the Panama Canal Authority. At center stage was $1.6 billion in cost-overruns.Although both sides eventually agreed to pay $100 million each to keep the project alive, the impasse resulted in a two-week strike and pushed completion to the first quarter of 2016.
Completion, prior to the dispute, was originally slated for late 2015.Work has since resumed and completion was at 76 percent in May. Installation of the first rolling gates is underway with an additional eight expected to arrive to the site by February 2015. There will be 16 in the end; eight for the Atlantic and eight for Pacific Ocean lock complexes.
Progress has also been made on the new Pacific Access Channel, the navigation channels, as well as improvements to the canal’s water supply and draft dependability. Post-Panamax ships make up 16 percent of the world’s container fleet, and will comprise 60 percent by 2030. Although an expanded Panama Canal will allow swifter passage from Asia to North America, transit costs have yet to be set.
It will also compete with two existing routes: West Coast seaports (and their rail connections to the eastern half of the U.S.) and the Suez Canal. Suez is especially noteworthy since it now handles as much capacity on Asia-U.S. Gulf and East Coast routes as the Panama Canal; Maersk, the world’s largest container-shipping line, stopped using Panama for its Asia service to the U.S. east coast last year.
Also, Egypt will construct a 45-mile-long channel that runs parallel to the Suez Canal, which will enable ships to sail uninterrupted in both directions. This will cut wait times by three to eleven hours along the 100-mile long canal.
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