Panama Canal Gives Nod to New Pacific Port

Panama Canal Gives Nod to New Pacific Port

The Panama Canal Board of Directors this week formally approved the development and construction of a transshipment port in Panama’s Corozal region.

Upon completion, the port will have the capacity to handle more than five million TEUs within a 120-hectare area at the Canal’s entrance to the Pacific. The project is now awaiting the final step for approval from Panama’s National Assembly.

The two-phased port project will include the construction of a 2,081-linear-meter-dock, a container yard, offices and warehouse facilities within a 120-hectare area owned by the Panama Canal.

The project’s first phase will include 1,350 linear meters of docks, three docking positions for Post-Panamax ships, and an approximate handling capacity of three million TEUs. Currently, the Pacific side has an estimated capacity of five million TEUs. With the expanded Canal, demand on the Pacific side is expected to reach six million TEUs and by 2020, eight million TEU capacity.

The National Assembly is expected to review the bill in the coming days. If approved, the Panama Canal will move forward with the development and tender process. The Panama Canal will issue a call for bids to hire a company that will be responsible for all stages of the project. The contract will, most likely, consist of a 20-year concession, renewable once for 20 years.

”Advancing the terminal in the Corozal region is a priority. It is part of the Panama Canal’s goal to explore and develop areas, products and services that are close to our core business, and that add substantial value to our customers as a one-stop gateway with multiple services,” said Panama Canal Administrator/CEO Jorge Luis Quijano.

The new port terminal will also include the construction of port facilities capable of handling Post-Panamax vessels. With a terminal of 16.3-meter-deep access canal and a depth of 18 meters along the dock, the new facility will provide docking facilities for five Post-Panamax ships.

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Work halted on Panama Canal expansion

By Tom Stieghorst

The Panama Canal Authority said almost all activity has ceased on the project to widen the canal, amid a payments dispute with the contractor.

A consortium led by Spain’s Sacyr Vallehermoso is seeking reimbursement for cost overruns of more than $1 billion.

Two weeks of negotiations have not produced a resolution, the authority said.

Canal Administrator Jorge Quijano said the authority continues to try to find a solution, but stressed that the contractor must resume normal activity, which is critical during the dry season in Panama.

The widening project had been scheduled for completion in mid-2015. Current canal passage is not affected.

Authority assures that Panama Canal widening will be completed

By Tom Stieghorst

The Panama Canal Authority has reaffirmed its intent to finish its expansion project by mid-2015, despite a payment dispute with contractors.

A consortium led by Spanish construction company Sacyr threatened last week to suspend work on Jan. 20 if the Panama Canal Authority did not pay for $1.6 billion in cost overruns.

In a statement, the authority said its contract includes guarantees that will allow the completion of the new locks, even if it needs to step in to assume control of the project.

The authority stressed that the dispute relates only to the expansion and is not affecting current operations.

The $5.25 billion widening project will allow for longer, deeper ships to pass through the canal, which was built in 1914. The project is 72% done, the authority said.

According to Agence France-Presse, the Spanish government has begun mediating the dispute, and the Spanish minister of public works flew to Panama on Monday to talk to both sides.

Grupo Unidos por el Canal blames the cost overrun on faulty geological studies done by the authority.

In its statement, the authority said the arguments raised by Grupo “lack legal basis, are not clear and do not give any reasons for the contractor to suspend the work.”