Panama Canal Expansion Project Near Completion, Despite Setbacks
The Panama Canal expansion project is projected to finally conclude by mid-2016, although canal authorities have not yet released a commercial opening date. The $5.25 billion project, originally projected for completion in October 2014, has been subject to a number of trials including labor strikes, leaking locks, and legal disputes between the Panama Canal Authority (ACP) and the Grupo Unidos Por el Canal (GUPC). The rebuilding of the sills to repair the leaking locks has created an estimated $150 million in budget overruns.
Despite these setbacks, transit charter vessel trial tests should begin in April, and the final ribbon-cutting and opening of the canal’s transit routes should be completed by May 2016, according to ACP director and CEO Jorge Quijano. Quijano is optimistic about the project’s progress. In a December 21 statement, he expressed that “an expansion of the Panama Canal has never been done and we should all feel very good about where we are today.”
At completion, the canal’s new locks will double the daily capacity from 5,000 to 13,000 TEU containers (using new and improved Panamax ships) and 320 to 600 million tons of annual cargo via vessel transfers.
The expansion project is also expected carve out new trade access channels between the Pacific, Atlantic and Gulf coasts. The Panama Canal already cuts ocean voyages from New York to San Francisco from 13,000 to 5,000 miles. In addition, the canal connects East Asian powerhouses such as China, Japan, South Korea, and the Philippines to U.S. Gulf and East coast producers and consumers. The expansion of the canal will further facilitate the trade relationships between the East and West by allowing for the use of larger, more cost-effective vessels that will improve the ability of U.S. exports to compete in global markets. If all plans go accordingly, Gulf and East coast companies, including local Georgia businesses, can expect to start seeing the trade benefits of the Panama Canal expansion project in the near future.