Panama's tight squeeze
Toll revenue will be lost if the country doesn't spend US$10-billion to expand its canal
Rip Watson and Thomas Black
Bloomberg News
7 September 2005

On a hot, drizzly day in July, the Aegean Leader sailed through the Panama Canal, its 32-metre-wide hull barely clearing the waterway's locks.

The vessel, which carries Japanese vehicles to the U.S. East Coast, is the biggest its owner, Nippon Yusen K.K., sends through the canal linking the Pacific and the Gulf of Mexico.

Nippon Yusen and Wal-Mart Stores Inc. are among companies pressing Panama to enlarge the 91-year-old waterway to take bigger ships at a time when growing exports from Asia clog U.S. Pacific ports.

If the country balks at spending the US$10-billion needed to expand the canal, it will lose income as ships take alternative routes such as the Suez Canal to reach the Atlantic seaboard, says Asaf Ashar, a professor at the National Waterways Institute at the University of New Orleans.

"People will still use it, but it will have secondary status," Mr. Ashar says. He estimates that without expansion, annual toll revenue would fall 21%, or US$210-million, based on the year ended Sept. 30, 2004.

U.S. imports and exports account for about half the cargo transported through the 84-kilometre-long canal. China is the second-biggest user, and Japan is third, according to the canal authority.

Vessels that are too big for the waterway use other routes to travel between Asia and the U.S. East Coast. Some cross the Suez Canal and Mediterranean Sea to reach the Atlantic Ocean. Alternatively, goods are unloaded at West Coast ports and transported by road or rail across the United States.

Enlargement of the canal would take nine years to complete and involve the construction of a third channel, which means it needs to begin as soon as possible, says Robin Lanier, director of the Waterfront Coalition, a Washington trade group that represents U.S. retailers such as Bentonville, Ark.-based Wal-Mart on shipping issues.

Without expansion, increasing congestion at ports on the U.S. West Coast will slow growth of trade and add to companies' costs, he says. "U.S. economic prosperity depends on upgrading the canal. Immediate expansion should be a high priority."

Last year, congestion at the California ports of Los Angeles and Long Beach, which handle about 40% of containerized U.S. imports, diverted more than 115 incoming ships to other Pacific harbours, according to the Southern California Marine Exchange.

In Panama's jungle, Anibal Soto, who scratches a living growing corn and rice on the banks of the Rio Indio, says his land and thatch-roofed home would be flooded by a reservoir if a new channel is built. "This house will be 60 metres underwater," says Mr. Soto, whose home is five hours by road and river from Panama City.

A preliminary proposal that envisages feeding locks with water recycled from existing channels and new pools alongside the canal, instead of from reservoirs, would be unacceptable, says Fernando Manfredo, a former canal administrator. "These side pools can be complicated, because they may cause contamination of the water," he says. "They're going to have to build dams on the Trinidad and Indio rivers."

Francisco Miguez, the official in charge of drawing up expansion proposals, says no new reservoirs would be needed until 2025 at the earliest. "The possible impact has been blown out of proportion because people are scared," he says.

The authority expects to present an expansion plan to its board within a few months, Alberto Aleman, an administrator, said on Aug. 16. If the board approves the plan, it would have to be passed by congress before going to a national referendum.

Mr. Aleman didn't specify how much an enlargement would cost. Global Insight Inc., a Lexington, Mass.-based consulting company, calculates the expense at US$10-billion.

The cost of financing a third channel may be too much for the country of three million people to bear, says Jose Isabel Blandon, a congressman with the opposition Panamenista Party. "What concerns us is that the country's debt would rise far beyond its capacity to pay," he says.

At the end of July, Panama had US$7.2-billion of foreign debt. Standard & Poor's rates its government bonds BB, or two notches below investment grade.

While the canal authority, hasn't disclosed how it would fund an expansion, Claudia Calich, senior portfolio manager in New York for Invesco Inc. who manages US$500-million of emerging-market bonds including Panamanian debt, says it would probably use a mix of loans and bonds. The authority has no debt of its own. "If the canal expansion offers value, we would absolutely look at the deal," Ms. Calich says.

The authority hasn't said how much tolls, which were raised 60% in May, might rise if the expansion goes ahead. Global Insight estimates they would have to at least double to pay for the work.

The United States, which completed the canal in 1914, ceded the waterway to Panama in 1999. In the year ended Sept. 30, 2004, the canal had revenue of US$1.06-billion and produced royalties for the government of US$183.7-million.

The expense of shipping goods from Asia through the canal to the Gulf of Mexico is about 20% less than unloading at U.S. West Coast ports and transporting goods by train to consumers in cities such as Houston, according to calculations based on prices published by shipping and railroad companies.

"The more efficient the transportation is, the lower the cost will be," says William Wertz, a Wal-Mart, spokesman. Wal-Mart has built a 2.2-million-square-foot warehouse near Houston to handle shipments of toys, electronics and other consumer goods. "It is ultimately a benefit to consumers."

Shipping companies, buoyed by a 10% annual expansion in world trade, are increasing the size of their vessels, and most cargo carriers under construction will be too big to use the waterway, says Hans Moller, managing director in Panama for container shipping company Maersk SeaLand.

"Fifty-eight per cent of ships on order can't transit the canal," he says. Maersk SeaLand, a unit of Copenhagen-based A.P. Moeller-Maersk A/S, the world's biggest container- shipping company, already has 22 ships that are too big.

"The canal and the country will have to make a big decision," says Chris Koch, president of the World Shipping Council, a Washington-based trade association whose members include Maersk and Nippon Yusen. "If the canal chooses not to expand, trade will continue to flow, and go elsewhere."

Panama woos top operators

But government remains tight-lipped on terms and conditions for concessions ahead of first stage proposals, writes Rainbow Nelson

27 October 2005
Lloyd's List

THE Panamanian government is to meet with the world’s 10 largest container terminal operators next month to finalise details of the $600m first phase of a proposed “megaport”.

November’s meeting will act as the formal launch of the project, with only those container terminal operators handling more than 6m teu a year invited to the party.

The likes of Hutchison Port Holdings, PSA Corp, APM Terminals, Dubai Ports, P&O Ports, NYK and Cosco all qualify to participate in the project that will have an annual capacity of 2.4m teu in the first phase.

To attend, the operators need to express their interest in the project before November 18, the date scheduled for the meeting.

Still at an early stage, the full details of the project have not yet been finalised, according to a release from the President’s office.

“The terms and conditions for the future concession have not been defined yet because they will depend on the type of investment that interested operators would be willing to make,” said a government spokesman.

After the meeting in November, the government will begin a formal bidding process including all the technical, financial, environmental and operational terms and conditions of the concession.

The new greenfield container port, will be located on the west side of the Pacific entrance of the Panama Canal, in the Palo Seco/Farfan area, adjacent to the former Howard airforce base and area now designated a special economic area with tax exemptions for distribution companies.

Created under PL No. 41 of July, 2004, this special economic area is expected to have a similar impact as the Colon Free Trade Zone, building on Panama’s growing reputation as an international distribution centre for goods manufactured both locally and abroad.

In the project’s first phase, an area of 112 hectares is to be developed with 1,600 m of quay and 18 post-Panamax gantry cranes. The estimated cost of the first phase is around US$600m, based on studies carried out by consulting firm, Moffat & Nichol.

With a draft of 15 m, the project is designed for the latest generation of container vessels, which, it is hoped, will one day transit through an expanded Panama Canal.

Rogelio Orillac, ports director for the Panama Maritime Authority, and the person now heading up the ‘megaport’ project, said that there had already been strong interest from nearly all of the top 10 container terminal operators. Mr Orillac could not say whether any restrictions would be placed on the participation of companies with existing operations on the Pacific side of the Canal, namely Hutchison Port Holdings — which operates the only container terminal on the Pacific side — on the grounds of encouraging competition.

As Hutchison subsidiary, Panama Ports Company had not, to date, “expressed any interest”. Mr Orillac did not foresee this issue arising.

PPC has plans to invest $1bn in its facilities on the Atlantic and Pacific side of the Canal. Its facility in Balboa will be the one most directly affected by rival operators on the Pacific side of the Canal.

A spokesman at the Hutchison subsidiary refused to comment on whether it would be bidding for the new terminal.

The Panama Canal Expansion is a reality!!! Coming Soon 2006 ;)

I hope they expand it, but can the country afford it?

I hope they expand it, but can the country afford it?

It´s possible...The Panama Canal has it´s own resources that has nothing to do with the government cash!

We´re just waiting for the studies to be completed...

@HK

Good post!

Panama Celebrates Six Years Of Canal Ownership
31 December 2005

PANAMA CITY, Panama (AP)--Panama celebrated the sixth anniversary of its ownership of the Panama Canal on Saturday, at a time when the country must decide how to finance the expansion of the Atlantic-Pacific waterway to accommodate larger ships.

"Panamanians are going to have an enormous decision ... given that we are almost done with the (expansion) studies," canal administrator Alberto Aleman Zubieta said.

The United States opened the canal in 1914 and turned it over to Panama on Dec. 31, 1999, amid doubts about the country's ability to manage it.

Those doubts dissipated as Panamanian operators reduced the number of ship accidents in the canal and increased revenues to more than $1 billion a year.

In the coming months, administrators plan to present a proposal to widen the canal, which must be approved in a public referendum. If approved, work could begin in 2007.

Ten percent of the world's ships currently cannot pass through the narrow waterway and operators say an expansion would help the canal remain one of the easiest shipping routes between the Pacific and Atlantic oceans.

The project is expected to take at least six years, and includes constructing new locks that would be 40% longer and 50% wider than the current locks on the 80-kilometer (50-mile) canal.

Francisco Miguez, who is coordinating the plan, said it would double the canal's capacity to 600 million metric tons (660 U.S. tons) of cargo each year.

"How much it will cost and how we will pay for it are points that we are fine-tuning and should have ready in the next few months," said Rodolfo Sabonge, the canal's director of corporate planning. In the past, officials suggested raising ship tolls and obtaining foreign financing to pay for the project.

Authorities have been cautious about calculating the expansion's cost, but estimates have ranged from $5 billion to $8 billion.

About 14,000 ships representing 5% of the world's trade pass through the canal each year.

Survey finds majority of Panamanians will vote to expand canal
9 April 2006

PANAMA CITY, Panama (AP) - More than 56 percent of Panamanians said they will vote for a multi-billion-dollar extension of the Panama Canal in a referendum later this year, according to a survey released Sunday.

Only 19 percent said they will vote against the expansion while 24 percent said they were undecided in the study by the polling company Dichter and Neira.

Panamanian President Martin Torrijos has promised to hold a referendum later this year on proposals to carry out the biggest modifications to the Panama Canal since it was opened in 1914.

The government has not said how much will be spent on the expansion. Independent analysts estimate the changes will cost between US$5 billion (euro4.1 billion)and US$8 billion (euro6.5 billion).

The survey was carried out with 1,200 people between March 31 and April 3. It has a margin of error of plus or minus 3 percentage points.

Some Panamanians in Way of Canal Expansion
21 April 2006

LAGARTERITA, Panama (AP) - A plan to expand locks in the Panama Canal so they can accommodate larger ships has Emerita Rodriguez worried her home may soon be underwater. Rodriguez lives with her husband and three children on a small island on Lake Gatun, a 160-square-mile man-made reservoir that supplies water for the canal.

President Martin Torrijos' government has said that no one will be forced from their homes if Panamanians approve a referendum later this year required for the expansion plan to go forward.

But Francisco Miguez, who is coordinating the canal expansion master plan, said the projects being studied include one that would raise Lake Gatun's water level. And recently officials from the Panama Canal Authority, which runs the waterway, met with Rodriguez and others living on the lake's islands and shores and warned them they may have to leave their homes.

"They told us that those of us living near the lake would have to seek higher ground," Rodriguez said.

The United States opened the canal in 1914 and turned it over to Panama on Dec. 31, 1999. About 14,000 ships representing 5 percent of the world's trade pass through the canal each year.

But 10 percent of the world's ships cannot pass through the narrow waterway and operators say an expansion of the locks would help the canal remain one of the fastest and easiest shipping routes between the Pacific and Atlantic oceans.

If approved, the project is expected to take at least six years, and includes constructing new locks that would be 40 percent longer and 50 percent wider than the current ones on the 50-mile canal. Miguez has said it would double the canal's capacity to 660 tons of cargo each year.

The canal's series of locks raise and lower ships to and from sea level as they make their way across the isthmus. Larger locks would mean more water would be needed to fill them, which in turn, would cause the level of Lake Gatun to rise.

The government has not said how much will be spent on the expansion, although independent analysts estimate it will cost between $5 billion and $8 billion. Officials have said, however, that Panama will finance the project through higher rates charged to canal users, rather than taking on debt.

The plan seems to have broad support among the public. According to a poll released earlier this month, more than 56 percent of Panamanians said they will vote for the expansion in the referendum, while only 19 percent said they were opposed. The rest were undecided.

The survey questioned 1,200 people between March 31 and April 3. It had a margin of error of plus or minus 3 percentage points.

The expansion plan does not include building new dams or flooding areas, a relief to the estimated 186,000 people living in the Panama Canal basin, a 1.4 million-acre area viewed as vital to the canal's ecosystem.

But that hasn't stopped Rodriguez and thousands of others living around the lake from worrying about what will become of the their homes and land.

"The project is worthwhile because bigger boats are going to be able to get through," said Orlando Fernandez, 27, a local fisherman. "But they shouldn't affect third parties."

Its time for an expansion. :cheers:

Panama unveils $5.25 billion Plan for Canal expansion


The long-awaited an-nouncement, which has been delayed by controversy over the country's public finances, was expected to be made at a public meeting addressed by President Martín Torrijos, Ricaurte Vás-quez, economy minister and chairman of the Panama Canal Authority, and Alberto Alemán Zubieta, its chief executive.

The plans, drawn up by the canal authority, will now be passed to the president and will then be voted on by the Panamanian legislature before a public referendum that will be required for final approval.

Mr Alemán Zubieta told the Financial Times the announcement would make it an important day for Panama and the world maritime industry.

The 82km-long canal, which links the Pacific and Atlantic oceans, needs to expand because its locks, which were large enough to accommodate every ship afloat in 1914 when the canal opened, are now too small for many of the world's largest container ships.

Almost all the canal's capacity is used after a boom in demand for services linking Asia with the US east and Gulf coasts. In recent weeks, scores of ships have been queuing at either end of the canal, waiting for a passage because so few slots are available.

Mr Alemán Zubieta said the plan that had been decided on would involve construction of a third lane of locks alongside the two parallel lanes of existing locks at Miraflores, Pedro Miguel and Gatun on the canal.

Each new lock would measure 1,400 feet by 180 feet with a draft of 50 feet - a size that would accommodate container ships carrying up to about 12,000 20-foot equivalent units (TEUs), against a current maximum for the canal of about 5,000 TEUs. The largest container ships now afloat carry about 10,000 TEUs.

"This will create a lot of opportunities for the maritime industry and will create a lot of opportunities to change the mode that trade is moved in the future," Mr Alemán Zubieta said.

The planned expansion would cost $5.25bn (€4.3bn, £2.9bn), the administrator said and, if work started next year, it could be completed by about 2014.

Mr Alemán Zubieta said the expansion would be paid for through canal tolls, although at the peak of the work a bridging loan would be required because not all the money could be raised from users before the expansion.

He said he expected Panamanian citizens to back expansion, which has been controversial, because the canal was Panama's most important resource.

Tolls for container ships using the canal have increased sharply over the past year, while a $500m social fund for Panamanian citizens, backed by canal revenues, has been set up as the authorities have sought to increase support for expansion.


Sources: http://today.reuters.com/news/articlenews.aspx?type=worldNews&storyid=2006-04-25T023129Z_01_N24350245_RTRUKOC_0_US-PANAMA-CANAL.xml

http://today.reuters.com/news/articlenews.aspx?type=worldNews&storyid=2006-04-25T023129Z_01_N24350245_RTRUKOC_0_US-PANAMA-CANAL.xml

http://www.localnewsleader.com/elytimes/stories/index.php?action=fullnews&id=180945

http://english.aljazeera.net/NR/exeres/9BA6E168-E8FC-4204-9E9D-391E5A59ABC3.htm

Panama Pres' Bill Calls For Referendum On Future Of Canal
26 June 2006

PANAMA CITY, Panama (AP)--Panamanian President Martin Torrijos on Monday sent the National Assembly a bill calling for a referendum asking citizens whether the government should undertake the biggest modifications to the Panama Canal since it was opened in 1914.

If the National Assembly approves the bill, it will set a date for the referendum, leaving a period of at least 90 days for citizens to debate the proposal.

Torrijos' Democratic Revolution Party dominates the chamber, and lawmakers have signaled the bill will pass easily.

The presidential project calls for a construction of a third set of locks on the canal that would reduce long lines of ships trying to cross the canal and allow larger ships to pass through. It is projected to cost $5.25 billion in a country whose annual budget is $6.5 billion.

Torrijos says the expansion is necessary to keep the canal competitive in the 21st century.

"It is a great opportunity for Panamanians to make a gigantic leap toward progress," he said Monday.

The canal, 32 meters (105 feet) above sea level at its highest point, uses a series of parallel locks to lift ships to Lake Gatun for the transoceanic passage.

So-called Panamax ships carrying 4,000 containers can now just barely fit through the canal's 33-meter (108-foot) locks. The new third set would be 54 meters (177 feet) wide and be able to accommodate Post-Panamax ships that can carry twice as many containers.

Opponents of the proposed canal expansion contend the project is risky because it is based on uncertain projections about maritime trade and the world economy.

Recent polls indicate that a majority of Panamanians favor the expansion.

The cost of the construction would be financed through raising canal fees and bank loans without risking government social programs, according to the government.

The Torrijos government also is counting on an economic windfall that would come from an estimated 7,000 jobs during the five-year construction.

In 2005, Panama earned $1.2 billion in canal fees, maintenance and other related services levied on some 13,000 ship crossings.

The canal was first opened in August l914. More than 5,000 workers from more than 20 countries died during its construction, victims of disease and accidents.

Panama took over the administration of the waterway on December 31, 1999, the day the U.S. military presence in Panama ended. The United States is the main user of the canal, followed by the combined South American countries and China.

Panama Seeks $5.3B Project to Expand Canal
By KATHIA MARTINEZ
27 June 2006

PANAMA CITY, Panama (AP) - Panama's president sent lawmakers a bill Monday calling for a referendum on whether the government should undertake the biggest modifications to the Panama Canal since it was opened in 1914.

The project calls for a construction of a third set of locks on the canal that would reduce long lines of ships trying to cross the canal and allow larger ships to pass through. It is projected to cost $5.25 billion in a country whose annual budget is $6.5 billion.

President Martin Torrijos says the expansion is necessary to keep the canal competitive in the 21st century.

The canal, 105 feet above sea level at its highest point, uses a series of parallel locks to lift ships to Lake Gatun for the transoceanic passage.

So-called Panamax ships carrying 4,000 containers can now just barely fit through the canal's 108-foot locks. The new third set would be 177 feet wide and be able to accommodate post-Panamax ships that can carry twice as many containers.

Opponents of the proposed canal expansion contend the project is risky because it is based on uncertain projections about maritime trade and the world economy.

Recent polls indicate that a majority of Panamanians favor the expansion.

The cost of the construction would be financed through higher canal fees and bank loans without risking national social programs, according to the government. The Torrijos government also is counting on an economic windfall that would come from an estimated 7,000 jobs during the five-year construction.

In 2005, Panama earned $1.2 billion in canal fees, maintenance and other related services levied on some 13,000 ship crossings.

If the National Assembly approves the bill, it will set a date for the referendum, leaving a period of at least 90 days for citizens to debate the proposal. Torrijos' Democratic Revolution Party dominates the chamber, and lawmakers have signaled the bill will pass easily.

Panama took over the administration of the waterway on Dec. 31, 1999, when the U.S. military presence in Panama ended. The United States is the main user of the canal, followed by South American countries and China.

Panama sets canal expansion referendum for Oct. 22

PANAMA CITY, July 15 (Reuters) - Panama will hold a referendum on Oct. 22 on whether to expand the Panama Canal, which carries 4 percent of all world trade but is deemed too small for modern shipping needs.

Panama's national assembly on Friday night unanimously approved sending the proposed expansion, which entails building a third set of locks costing $5.25 billion, to a vote by the electorate.

The vote will take place on Oct. 22, a government official said.

The canal is a vital trade route for regional commodities producers and China's booming manufacturing industry.

The Panama Canal Authority, which operates the waterway, says the expansion will be paid for by a doubling in tolls over the next two decades and short-term debt of $2.3 billion.

The work, to allow bigger ships to sail between the Atlantic and Pacific, would start next year if approved by the public and be finished in 2014.

The canal was built by the United States, which ran it for much of the 20th century. It was handed over to Panama in 1999 following 1977 treaties brokered by President Jimmy Carter and Panamanian President Omar Torrijos, a populist dictator and father of current leader, Martin Torrijos.

The last opinion poll in May showed most Panamanians support the canal expansion.

Panama Canal maintenance to cause some ship delays

NEW YORK, Aug 14 (Reuters) - The flow of shipping traffic in the Panama Canal is expected to slow down over the next few weeks due to a temporary reduction in transit slots during maintenance on the waterway, ship agents said on Monday.

Over the weekend, the Panama Canal Authority (ACP) began its week-long maintenance work on the locks of the canal, a strategic waterway for oil and commodities cargoes between the Pacific and Atlantic Ocean.

This is the second time in two months ACP has cut the number of available transit slots to 19 from 23.

In mid-July, the backlog of vessels in transit grew to 57, sharply higher than the 40 seen in late June.

"We have been warned by ship agents that there should be increased delay over the next three to four weeks," said a source from a shipping company in Louisiana.

However, the traffic flow was smooth as of Monday, with only 33 vessels waiting to sail through the canal.

For ships sailing in either direction, the delay was pegged at about one day on Monday.

"If the vessel backlog rises to more than 50, we will have significant delays," another ship owner said.

In mid-July, Panamax vessels were delayed for two to four days, depending on the sailing direction.

The smooth sailing seen on Monday may not last too long, with one ship agent estimating the vessel backlog to rise to 43 by Wednesday.

The canal can typically accommodate about 36 vessels in one day.

Survey: 8 of 10 Panamanians favor canal expansion
11 October 2006

PANAMA CITY, Panama (AP) - Nearly 80 percent of Panamanians plan to vote for a proposal to expand the Panama Canal, according to a poll published Wednesday, the last day surveys can legally be reported ahead of a referendum.

On Oct. 22, Panamanians will decide on the US$5.25 billion (euro4.2 billion) proposal to add a third set of locks to the canal to accommodate larger container ships and reduce the long lines of ships waiting to cross. Opponents say the expansion is expensive for a poor nation and will be environmentally damaging.

The report published Wednesday in the Panamanian newspaper La Prensa said that 79 percent of respondents said they favor the proposal while 21 percent would vote against it. Pollster Dichter y Neira surveyed 2,092 people from Friday through Sunday. It had a margin of error of 2.5 percentage points.

Panama took over the administration of the waterway on Dec. 31, 1999, when the U.S. military presence in Panama ended. The United States is the main user of the canal, followed by South American countries, Japan and China.

Panama Canal sees 6.2-percent growth in freight traffic in fiscal year 2006
10 October 2006

PANAMA CITY, Panama (AP) - Freight traffic through the Panama Canal increased by 6.2 percent in terms of tonnage in the past 12 months, authorities reported on Tuesday.

From September 2005 to September 2006, freight shipped through the waterway totaled 296.3 million tons compared to the previous fiscal year, and the number of ships crossing grew by 1 percent, to 14,194.

Of those, 1,610 were the larger Panamax ships, whose number grew 22.9 percent from the previous year.

Ten accidents occurred in fiscal year 2006, compared to 12 in the prior one, the Canal Authority reported.

Panamanians will vote in an Oct. 22 referendum on a project to add a third set of locks to the canal to allow larger container ships to pass through the waterway and reduce the long lines of ships waiting to cross.

The Canal Authority has estimated the project will cost roughly US$5.25 billion (€4.2 billion).

Panama has controlled the canal since Dec. 31, 1999, when the U.S. military presence in Panama ended. Approximately 4 percent to 5 percent of the world's maritime trade crosses through the Panama Canal.

Voters Approve Panama Canal Expansion
22 October 2006

PANAMA CITY, Panama (AP) - Voters overwhelmingly approved the largest modernization plan in the 92-year history of the Panama Canal on Sunday, backing a multi-billion dollar expansion that will allow the world's largest ships to squeeze through the shortcut between the seas.

About 78 percent of Panamanians voted in favor of expansion, with 90 percent of polling stations counted by the country's electoral tribunal. Only about 22 percent opposed the plan. Almost 57 percent of the country's more than 2.1 million voters did not turn out.

Thousands of supporters in green "Yes" T-shirts cast ballots endorsing the $5.25 billion overhaul which would allow the canal to handle modern container ships, cruise liners and tankers that are too large for its current 108-foot-wide locks. The plan is to build a third set of locks on the Pacific and Atlantic ends by 2015.

The Panama Canal Authority, the autonomous government agency that runs the canal, says the project will double capacity of a waterway already on pace to generate about $1.4 billion this year. Expansion will be paid for by increasing tolls and take in more than $6 billion annually in revenue by 2025.

A large chunk of canal revenues go to education and other Panamanian social programs. Still, critics contend that as drawn up, the expansion plan benefits the canal's customers more than Panamanians, and worry that costs could balloon for this debt-ridden country.

"Voting 'no' is like closing the door on the canal. It's the top source of income for Panama and improving it means more money for the government and less poverty," said Leonardo Aspira, a boat salesman who sported a "Yes" shirt and baseball hat in Kuna Nega, a largely Indian town of dirt roads and banana trees on the outskirts of Panama City.

The canal employs 8,000 workers and the expansion is expected to generate as many as 40,000 construction jobs. Unemployment in Panama is 9.5 percent, and 40 percent of the country lives in poverty.

Critics contend the expansion will benefit the canal's customers more than Panamanians, and fear it will stoke corruption and uncontrolled debt if costs balloon.

"The expansion is necessary, but we all have to watch closely, make sure there isn't embezzlement and corruption," said Igor Meneses, a 34-year-old advertising executive who was waiting to vote in Panama City. "With that kind of money, there's a lot to steal."

President Martin Torrijos, an outspoken supporter of expansion, called the referendum "probably the most important decision of this generation," after voting.

Opponents of the expansion plan complained about electoral foul play.

On the sweltering streets of Panama City, some wore red shirts and smocks supporting a 'No' vote. But they were far outnumbered by those in shirts, bandanas, caps and vests supporting expansion. Cars and trucks with "Yes" bumper stickers and flags jammed streets.

Former President Guillermo Endara, who dressed in red from head to toe to show his opposition to expansion, complained that polling place workers wore "Yes" clothing and handed out cards with directions on where and how to vote with propaganda supporting the plan printed on the opposite side.

"That's vote-buying," Endara said.

School buses and vans with "yes" signs stuck to the side were also seen whisking voters from poor, crowded neighborhoods to polling places to vote.

But polling place and transportation workers showing which side of the referendum they were on apparently did not constitute a violation of Panama's electoral laws.

The United States arranged for Panamanian independence from Colombia to build the canal, and ran the canal from 1914 to 1999. Torrijos' father, strongman Omar Torrijos, signed a treaty with President Carter in 1977 to cede control of the waterway back to Panama, a decision that also was approved by Panamanians in a referendum.

From: http://edition.cnn.com/2006/WORLD/americas/10/22/panama.canal/
__________
Voters approve $5 billion overhaul for Panama Canal
POSTED: 0234 GMT (1034 HKT), October 22, 2006

From CNN's Harris Whitbeck

PANAMA CITY, Panama (CNN) -- With most of the votes counted, about 80 percent of Panamanians appeared Sunday to have approved a $5 billion plan to widen the Panama Canal.

The expansion would accommodate a new generation of cargo ships, many originating in China, seeking a quick route between the Atlantic and Pacific Oceans.

More than 90 percent of the votes have been counted. Despite some reports of irregularities, international observers from the Organization for American States said the referendum went well.

The 51-mile, man-made ditch that links the oceans was a marvel of engineering when it was completed in 1914.

Proponents of the planned expansion say it will guarantee the canal's viability for future generations.

Construction of the expansion would begin almost immediately; the whole project is expected to take at least four years, with completion expected in time for the 100th anniversary of the canal's opening in 2014.

In recent days, Panama Canal administrator Alberto Aleman attempted to persuade his countrymen to approve the referendum "to maximize our most important asset, which is our geographical position."

Proponents of the expansion argued that the cost of widening the canal will be offset by a hike in transit fees.

However, opponents expressed doubt that the fees will cover the cost and worry Panamanians will end up paying the price.

Sunday's referendum marked the first time that Panamanians have decided the canal's future on their own.

In 1978, President Jimmy Carter signed a treaty that led to the transfer of the canal's ownership from the United States to Panama in 1999.

Another Central American country, Nicaragua, is considering building an $18 billion canal that would compete with Panama's.

Canal Project Could Lower Prices in U.S.
By WILL WEISSERT
23 October 2006

PANAMA CITY, Panama (AP) - The United States on Monday applauded Panama's overwhelming vote in favor of widening its canal, an eight-year project that will cost $5.25 billion and should lower prices for shoppers on the East Coast buying goods from Asia.

The massive project, which would add a third set of locks on the Atlantic and Pacific sides of the waterway, is expected to double the 50-mile canal's capacity, allowing container ships, cruise liners and gas tankers currently too wide for its dimensions to squeeze through.

"There will be an impact on the pocketbook," U.S. Ambassador William Eaton told reporters in Panama City. "The transit costs will be cheaper and that will have an effect on the market."

The United States, which built the waterway in the early 1900s and controlled it until 1999, had been mum on the expansion plan so as not to sway Sunday's referendum. But Eaton said Monday that Panamanians had made the right choice.

"This is important to the U.S. It's important to our economy," he said. "We welcome expansion."

While turnout was only about 43 percent of Panama's more than 2.1 million eligible voters, nearly eight in 10 voted in favor of expansion. Construction won't begin until 2007 and is expected to take up to eight years.

President Martin Torrijos, who staked his political future on the plan, said the project, the largest in the canal's 92-year history, would create 40,000 jobs in a country where 40 percent of people live poverty and were unemployment sits at 9.5 percent.

The Panama Canal Authority, the autonomous governmental agency which runs the waterway, will borrow $2.3 billion between 2009 and 2011 to help finance the expansion, but expects to pay for the entire project by gradually increasing tolls for ships that sail through it.

Marvin Castillo, director of Panama's Maritime Chamber, said "any increase in tolls will have to be spread widely enough through all sectors of the shipping industry so that users can prepare for it and it won't represent a major hit."

The canal is on pace to generate $1.4 billion in revenues this year, but could produce $6 billion in revenues per year by 2025.

A chunk of tolls paid on each ton of cargo that passes through the canal goes to the national treasury for education and other social programs.

About two-thirds of shipping traffic passing through the canal is headed to or coming back from the United States. That figure will likely get even higher after expansion is complete.

The biggest vessels now moving through the Panama Canal's 108-foot-wide locks are known as Panamax ships, carrying up to 4,000 containers. But 27 percent of the world's containerized shipping is hauled by vessels that can carry 8,000 containers but are too big for the canal. By 2011, 37 percent will be too big, the canal authority says.

Many international shippers also said the expansion was necessary given the increasing amount of products from China, Hong Kong and other parts of Asia that need to be transported to stores on the U.S. East Coast. China is the canal's second-biggest user, comprising 18 percent of traffic.

Some U.S. Republicans have worried about Beijing's growing influence in the canal zone. Ports on the waterway's Atlantic and Pacific sides are managed by shipping giant Hutchinson Whampoa Ltd., which is controlled by Hong Kong-based tycoon Li Ka-shing.

But Eaton said the U.S. largely views Chinese interest in the canal as "purely economic."

"They have a huge stake in making sure the Panama Canal operates efficiently and safely, just as we do," he said. "We don't see ulterior motives in the Chinese interest."

President Theodore Roosevelt arranged for Panama's independence from Colombia in 1903 to build the canal. By some accounts, more than 25,000 people died during American and French efforts to build the waterway, which opened on Aug. 15, 1914.

Torrijos' father, Gen. Omar Torrijos, who took power in a coup in 1968, signed a treaty with President Jimmy Carter in 1977 that ceded control of the canal to Panama on Dec. 31, 1999. Since then, accidents and the time needed to transverse the canal are down, while revenues are up.

LONG Overdue!!

Have you guys ever visited the Canal? It is a working industry relic. The power plant that powers the operations is rusted and very anticuated.

These improvements are great for Panama as more investmenst will flood in.

Japan welcomes vote for Panama canal widening

TOKYO, Oct 24, 2006 (AFP) - Japan, the third major user of the Panama Canal, Tuesday welcomed the outcome of a referendum backing a plan to widen the transcontinental waterway to allow through the world's largest cargo vessels.

"Japan congratulates President Martin Torrijos on his announcement that the expansion plan for the Panama canal will be approved," the Japanese foreign ministry said in a statement.

"Japan will ask Panama that procurement processes for this project will be carried out in a transparent way and we will offer necessary assistance to Japanese firms with high technology and knowledge who want to participate in the project," the statement said.

In a weekend referendum, Panamanian voters overwhelmingly approved the 5.25-billion-dollar plan to widen and modernize the 92-year-old waterway between the Pacific and Atlantic Oceans.

Only the United States and China are bigger users of the canal than Japan.

Panama Canal's largest-ever expansion isn't expected to displace nearby residents, officials say
24 October 2006

EL LIMON, Panama (AP) - Original construction of the Panama Canal is thought to have flooded 29 villages, displacing 50,000 people. But the largest modernization project in the 94-year history of the waterway, officials insist, won't force anyone to seek higher ground.

An eight-year, $5.25 billion expansion starting next year will double the canal's capacity. Deeper, three-step locks on the Atlantic and Pacific sides will accommodate container ships, cruise liners and tankers too large for the canal's present dimensions, planners say, while alleviating problems with traffic congestion.

But officials promise the project won't displace anyone.

"Not a single home will be affected," canal administrator Alberto Aleman has pledged, adding: "The project does not require any new dams, new reservoirs."

While the area immediately beside the canal is a high-security zone where no one is allowed to live, 186,000 people have homes on islands within the canal's wider expanses or on the banks of the surrounding basin. It's a 1.4 million-acre area including two lakes: Gatun, off the Atlantic Ocean, and Alhajuela, created by a dam farther to the north.

Ships are raised and lowered from the Pacific and Atlantic by a series of locks, plying the waters of Gatun Lake and the canal as they shuttle between the oceans. With each boat that passes through the locks, 55 million gallons of water is dumped out to sea.

A trio of water-saving basins will ensure the new locks reuse 60 percent of that water, replenishing the canal and helping to ensure that officials won't need to flood communities to generate the water lost if the locks dumped into the ocean.

Aleman says the extra water needed for the expansion will raise the banks of 160-square-mile Gatun Lake by only 18 inches, and even that will only occur once a year, at the end of the rainy season.

The original site of El Limon was flooded by the digging of the canal, but now the same town is perched on a hillside, with breathtaking views of the ink-blue waters.

Panama's environmental secretary sent representatives to towns throughout the canal zone to reassure residents. While few here seem worried enough about the canal expansion to sell their simple homes of cinderblock and concrete, some, like Jose Diaz, remain suspicious.

"No one is giving clear answers about what will happen. Why? Because they aren't sure," said 38-year old Diaz, who sits on a committee that helps resolve disputes in El Limon. "The government is thinking about making money, not all the implications."

Feliciano Medina, a 57-year-old member of the town council, gazed from El Limon's cemetery to the lake, about 25 yards below. "Look where the water is and where the cemetery is," he said. "If the water rises some, whoa, what a mess!"

President Theodore Roosevelt arranged for Panamanian independence from Colombia in 1903 so Americans could take over a failed French effort to forge a shortcut between the seas. Throughout the life of the canal, engineers have launched major excavation projects to widen and deepen key sections. The new plan is to be the biggest expansion.

Americans first began working on a new set of locks on the Atlantic side in the 1930s, but the project was abandoned after the outbreak of World War II. The new set of locks will be constructed on the same site.

Washington controlled the waterway from its opening in 1914 until Dec. 31, 1999, when it was ceded to Panama, which considers the waterway a crucial resource.

"If I have to move, I'll move," said Andres Luna, a 68-year-old retiree who built tugboats for the canal for 31 years, but has long since retired to a home in El Limon on Lake Gatun's banks. "This is Panama and the canal gets what it needs. The good of the country is more important than some houses."

INTERVIEW-Panama to unveil canal toll hikes

MIAMI, Oct 28 (Reuters) - Panama is expected to unveil next week its plans for increasing tolls on the Panama Canal to help pay for a $5.25 billion expansion of the world famous waterway, a senior government official said.

"It's a lot of money, it's about a third of the economy," said Ricaurte Vasquez, Panama's minister for canal affairs, referring to the cost of the project.

Panamanians overwhelmingly approved the plan in a referendum on Oct. 22 and the overhaul will allow their inter-oceanic canal to handle mammoth modern cargo ships.

Vasquez, a former finance minister who also chairs the state-owned Panama Canal Authority that administers the canal, spoke in an interview with Reuters during a visit to Miami late on Friday.

Panama has already put canal customers on notice that it would like to double canal tolls over the next 20 years to finance the expansion, Vasquez said.

He said it had never been made clear how soon the hikes on the U.S.-built "Big Ditch," which first opened in 1914, would be phased in, however.

Alberto Aleman, the canal authority's chief administrator, is set to outline Panama's new pricing policy in a speech in Shanghai next Thursday, Vasquez said.

U.S. vessels remain the biggest users of the canal, followed by Chinese and Japanese ships, according to the Panama Canal Authority.

Vasquez said Panama's possible need for external financing to overhaul the canal would depend on its toll revenues.

"The financial needs will be increased or reduced accordingly." he said.

In the interview, Vasquez said the canal's expansion -- the massive construction of a new set of locks should begin around December 2008 -- was expected to add as much as 2.5 percentage points to Panama's annual gross domestic product and help lift the country out of poverty.

"We dream about being the fastest-growing, the best country in Latin America," he said.

'GREAT OPPORTUNITY'

He acknowledged there were no guarantees about breaking Panama's "vicious cycle of poverty," however, and said the country would seek the help of the United Nations Development Program to help ensure its success.

"I think that this is a great opportunity," Vasquez said of the canal expansion and its potential effects on a troubled nation burdened with huge debts and a past mired in corruption.

"I need just to sit back and capture the moment," he added.

He envisions huge companies like Wal-Mart Stores Inc. setting up large distribution centers in Panama, thanks to the canal expansion, and said business opportunities would abound once construction work gets under way.

Bidding for contracts linked to the canal expansion was expected to open by December 2008, Vasquez said, adding that concessions would be awarded about six months later.

A restaurateur selling nothing but lemonade and Panamanian-style meat pies to construction crews on the canal could make $6 million over the eight years it will take to complete its biggest-ever overhaul, Vasquez said.

"This is serious construction," he said.

Miyahara of NYK Line to be Panama canal adviser

PANAMA CITY, Dec 11, 2006 (AFP) - The president of the Japanese shipping giant NYK Line has been chosen to sit on an advisory board to the Panama Canal Authority amid plans for a major expansion of the canal, the authority said Monday.

Koji Miyahara has headed Nippon Yusen Kabushiki Kaisha since 2004 and brings more than 30 years experience in maritime shipping to the board, the canal authority said.

Panamanian voters recently approved a five-billion-dollar upgrade to build a third set of locks for the 92-year-old canal, to accept the largest ships in the world.

Miyahara, a lawyer, will give the canal a more international profile, the authority said.

The authority established the advisory board in 1999 to provide recommendations and guidance to the Canal Administration Board of Directors.

Panama Canal toll hike won't slow traffic flow

NEW YORK, Feb 5 (Reuters) - A planned tariff hike for all ships at Panama Canal is not expected to slow vessel traffic flow at the famous shortcut between the Pacific and Atlantic oceans, some traders and ship owners said on Monday.

"With the high bunker fuel prices and strong time-charter rates for ships, it won't have an impact on the canal shipping flow," a trader said. "The alternatives are not viable."

The proposed 2007-2009 increases -- for container, grain,
oil and passenger ships alike -- are needed in part to pay for

the canal's scheduled $5.25 billion expansion plan to allow it to handle larger modern cargo ships and boost government revenue.

The Panama Canal Authority, or ACP, is to open talks with shippers and countries that use the canal before announcing final tariffs for the next three years.

Some alternatives to the canal could be exporting more grain cargoes from the U.S. Pacific Northwest and less from the U.S. Gulf Coast, or sailing a much longer voyage around Cape Horn in the southern part of South America, traders said.

The voyage from the U.S. Gulf to Asia via the Panama Canal would take about 32 days, compared with 39 days for sailing around Cape Horn.

However, one ship broker pointed out that the sailing time could be almost the same despite the shortcut through Panama.

"There is usually an average delay of about three days for vessel transits at the canal," he said.

The delay for Panamax ships could be as long as 7 to 10 days during the peak seasons or maintenance periods.

But much less bunker fuel is needed as a ship sailing from New York to San Francisco via the canal travels about 6,000 miles (9,600 kilometres), less than half the 14,000 mile route around Cape Horn.

A U.S.-based dry bulk ship owner said that an increase in canal tolls was a business cost, and it would most likely not affect the traffic volume of traffic.

"Charterers and owners will battle over who gets the ultimate expense of the increase," he said.

The planned toll hike should the most impact on shipping rates in the container industry as container ships lead all vessel segments in the number of transits, volume and revenue at the canal, according to ACP.

Some container ship owners expected more and bigger container ships to sail to the U.S. East Coast from Asia after the completion of the canal expansion plan.

(Additional reporting by Lisa Haarlander in Chicago)

Spanish PM tours Panama Canal, stresses trade links with Latin America
17 July 2007

PANAMA CITY, Panama (AP) - Spanish Prime Minister Jose Luis Rodriguez Zapatero toured the Panama Canal and met with Panamanian President Martin Torrijos on his first official visit to this Central American nation.

Zapatero was briefed Tuesday on Panama's ambitious, US$5.25 billion (euro3.84 billion) plan to expand the waterway to handle modern container ships, cruise liners and tankers that are too large for its current 108-foot-wide (33-meter-wide) locks.

Zapatero has stressed trade links with Latin America during his four-day visit to Mexico and Panama. He was accompanied by a group of Spanish businessmen interested in projects related to the canal, shipping and power generation.

Panama ports post 45.1 percent increase in traffic

PANAMA CITY, August 2 (Reuters) - Panama's Maritime Authority on Thursday reported a 45.1 percent increase in container traffic during the first six months of the year compared with the same period in 2006.

The authority said container traffic between January and June 2007 for all of the country's ports, including those at either end of the Panama Canal stood at 1,881,317 20-foot equivalent units, or TEU, up from 1,296,967 TEU in the first half of 2006.

At one end of the canal, Balboa -- a Pacific port run by Hutchison Port Holdings, part of Hutchison Whampoa Limited -- posted a 114.2 percent increase in traffic amid ongoing expansion projects.

In the first half of 2007, Balboa handled 863,331 TEU, compared to 403,131 TEU in the same period last year.

Plans are underway to make Balboa the biggest port in Latin America by 2010. Work already has been done to upgrade facilities so the port can handle post-Panamax vessels.

Manzanillo International Terminal S.A., located on the Atlantic entrance to the Canal, which was Panama's busiest port in the first six months of 2006, saw a 7.9 percent reduction in traffic, down to 577,271 TEU from 626,663 TEU.

Panama Canal transit times fall by 37 percent

PANAMA CITY, Aug 6 (Reuters) - The average time it took a ship to transit the Panama Canal between April and June fell by 37 percent from a year earlier as authorities moved to ease passage through the congested waterway, Panama said on Monday.

The Panama Canal Authority said the average Canal Waters Time -- the measurement used for the time vessels spend in the canal and its entrances -- fell to 24.5 hours from 38.90 hours in the same period of 2006.

As the 50-mile (80-km) waterway between the Pacific and the Atlantic oceans reaches capacity, canal authorities are eager to reduce crossing times to get more vessels through, and prevent long, costly queues for shippers.

The canal authority said improved operational systems were the reason for the drop in average passage time.

"For the second consecutive quarter, we have seen a significant reduction in total canal transit time," Manuel Benitez, the canal's vice president of operations, said.

A total of 3,727 vessels transited the canal in the second quarter of this year, a similar number to the same period last year.

Work is scheduled to begin at the end of this month on a multibillion-dollar expansion project to reduce congestion. The project is scheduled to be completed in time for the 100th anniversary of the U.S.-built canal in 2014.

Panama says canal expansion to begin on Sept. 3

PANAMA CITY, Aug 14 (Reuters) - Panama said on Tuesday it will kick off the expansion of its famous canal on Sept. 3, marking the beginning of an ambitious project to double the capacity of the waterway.

The 93-year-old Panama canal, which handles 5 percent of world trade, is a 50-mile (80-km) waterway between the Pacific and the Atlantic oceans.

Panama said the first excavations will begin at Paraiso, a town close to the Pacific entrance of the canal, as part of a $5.2 billion expansion project seeking to reduce congestion.

Once the project is completed, the canal will be able to accommodate larger ships through a third set of locks.

Vessels currently spend slightly over 24 hours to transit the canal. Demand is so high that passage rights are regularly auctioned off to the highest bidder.

Panama plans to launch the expansion with a ceremony led by former U.S. President Jimmy Carter, who in 1977 agreed to cede control over the canal to Panama for the first time.

Since its opening in 1914, the United States had controlled the canal and a thin strip of land on either side - dotted with military bases and towns custom-built for U.S. civilians.

Under the agreement with the United States, Panama took control for the canal in 1999.

The first phase of the expansion is expected to be done by March 2010. The entire project should be ready for the canal's centennial in 2014.

Slim-led group bids lowest in Panama Canal contract

PANAMA CITY, Nov 14 (Reuters) - A consortium led by Mexican billionaire tycoon Carlos Slim posted the cheapest bid on Wednesday to win the latest small contract to expand the Panama Canal, part of the wider $5.25 billion project.

The consortium beat out competitors from Colombia and the United States, as well as Mexican construction firm ICA , with a bid of $25.5 million for the excavation of 7.5 million cubic meters of earth, the Panama Canal Authority said.

The awarding of the contract to the consortium -- called Consorcio Cilsa Minera Maria and registered in Panama and Mexico -- depends on its paperwork being in order. There were seven other bidders.

The contract is the second, and one of the smallest, of five dredging contracts that the Panama Canal Authority has planned in its effort to double the capacity of the canal by 2014.

It is the first contract won by one of Slim's firms, which have also expressed interest in bigger projects yet to be awarded, including the construction of a third set of locks.

The canal's administrator, Alberto Aleman Zubieta, said on Wednesday that firms have until Thursday to submit paperwork if they want to take part in that project, estimated to be worth more that $2 billion.

The new locks as suggested will have the following dimensions:

length: 427 m (1400 ft)
width: 55 m (180 ft)
depth: 18.3 m (60 ft)

compared to the old lock dimensions of:

(usable) length: 304.8 m (1000 ft)
width: 33.53 m (110 ft)
depth: 12.55 m (41.2 ft)

The new locks are not large enough! Remember that when the original canal was finished in 1914, there were no ships too large for it. Although uncommon, there are already ships too large for the locks that will serve the canal for the next 90 years. Who knows how large ships will be in 30 years time. I therefore suggest the following dimensions for the new locks:

length: 610 m (2000 ft)
width: 70 m (230 ft)
depth: 25 m (82 ft)

This is large enough for ships 30 or 60 years from now. It also allows four of the present panamax ships to fit inside the lock at one time and may also allow large freight catamarans or aircraft carriers to fit.

The rest of the canal does not necessarily have to be expanded to the new dimensions immediately. It is possible to increase depth and width by a few metres at a time, as required.

Some would argue that such large locks are unfeasible for environmental or technical reasons. I list the objections and describe my suggested technical solution to eliminate these problems:

Objection 1) Such large locks will use too much water. Gatun is already suffering from low water levels seasonally.

2) Gatun lake will become contaminated with salt water from these larger locks. This is already a concern.

Instead of the suggested triple locks with water-saving storage basins, valves and gravity-powered water movement I would like to see double locks without storage basins and with pumps that also function as turbines. These pumps/turbines will pump water from the lower chamber to the higher one (requiring electricity) or let water from the higher chamber to the lower (generating electrical power in the process) alternately. Pacific and Atlantic lock systems will be synchronised so that as one consumes electricity, the other one produces it. This system minimises total power usage and maximum effect. The pumping process is extremely water efficient, in theory no water at all is wasted, in practise there is some loss due to seepage and water level variations.

To avoid Gatun lake becoming contaminated with salt water, two complementary solutions are required. One is to replace some power production at Gatun dam with power generated at the two lock systems, giving a slight current towards either end of the canal. The other solution to the problem of salt water contamination is to have the canal be especially deep in the sections immediately adjacent to the lock systems. Since salt water is heavier than fresh water, this deep water will be saltier than other parts of the resevoir. Water from these parts of the resevoir will be used for power generation.

My variant is slightly more expensive than the one presently favored. However, it will have lower operating costs, greater capacity, longer life and be better for the environment.

Any input to my suggestion is welcome.

Four consortiums compete to build new Panama Canal ship locks

PANAMA CITY, Dec 14, 2007 (AFP) - Panama will take bids from four international consortiums seeking to build new, larger ship locks for the Panama Canal, government officials said Friday.

The locks are a key part of the 5.25 billion-dollar canal expansion project begun in September, aimed at doubling the capacity of the 50-mile (80-kilometer) canal connecting two oceans.

Panamanian officials hope the project will be finished by 2014.

The four consortiums now have until August 2008 to present final proposals and price tags to compete for the contract, said Alberto Aleman, head of the Panama Canal Authority.

The bidders are:

- The CANAL consortium, which includes the Spanish companies ACS Servicios, Acciona Infraestructuras and Sner Engineering of Spain, as well as the Germany-based Hochtief Construction, ICA of Mexico and Royal Haskoning of the Netherlands.

- Atlantic-Pacific of Panama, which includes Bouygues Construction, VINCI Construction and Alstom of France, Bilfinger Berger of Germany, the US-based AECOM, and four Brazilian companies.

- A consortium that includes the US-based Bechtel, and Taisei and Mitsubishi corporations of Japan.

- The fourth group, "United Group for the Canal," includes Panama's Constructora Urbana, US-based companies Tetra Tech, Montgomery Watson Harza and Heerema Group, and companies from the Netherlands, Italy, Spain and Belgium.

The canal was built 1904-1914 by the United States, which handed control over to Panama in December 1999.

The largest ships that now use the canal carry up to 5,000 containers, but after the expansion supertankers and ships carrying as many as 12,000 containers will be able to sail the canal.

Some 14,000 ships, comprising about five percent of annual world commerce, pass through the Central American shortcut between the Atlantic and Pacific Oceans, avoiding the arduous and costly journey around Cape Horn, at the southern tip of South America.

About 80 percent of Panama's economy is linked to canal activity, amounting to some six billion dollars, or 80 percent of Panama's gross domestic product.

The waterway's main users are the United States, China and Japan.

The government says work would be financed by a hike in tolls, worth 1.2 billion dollars in 2005.

DIAGRAMS!!!!!!!!!!:bash::bash::bash::bash:

help is talk military U.S. , here is aircraft carrier ......
buy is panama canal future projet...... diagrama "1,092 ft (333 m)"


:hm:

Panama Canal Authority sees revenue growth in 2008

PANAMA CITY, Feb 19 (Reuters) - Revenue from Panama Canal transit fees are expected to increase by about 10 percent in 2008, despite likely slower growth in world trade, the Panama Canal Authority said on Tuesday.

Toll revenues should reach $1.30 billion this year, compared with $1.18 billion in 2007, Authority analyst Rodolfo Sabonage said at an event.

Many of the gains are expected to come from increased transit fees. In January, the Authority reported that toll revenue had increased in the previous three months by about 8 percent to $300 million, despite a drop in transits resulting from high oil prices and slower growth in U.S. demand.

The Panama Canal accounts for about 20 percent of Panamanian gross domestic product and its toll revenue accounts for a sizable chunk of the national budget.

any pictures of panama canal to be posted in this tread, please?

Panama Canal revenues seen rising 19 pct

PANAMA CITY, June 20 (Reuters) - Panama expects income from the Panama Canal to increase 19 percent over the next fiscal year to $2.1 billion, according to figures approved by legislators on Friday.

The figures, which will form part of the 2009 budget, would allow transfers to the Panamanian government to rise next year to $748 million, up 13 percent from the previous fiscal period. The figures were presented by the Panama Canal Authority.

Much of the increased income will come from a rise in toll revenue, which is expected to swell to $1.45 billion from $1.18 billion in the 2007-08 period as a result of higher prices paid by shipping firms and continued high volumes of traffic.

Lawmakers on Friday approved the canal's operating budget for 2008-09, which includes $152 million for canal improvements and $765 million for work to expand the increasingly choked waterway -- part of a $5.25 billion project to double its capacity.

IADB agrees terms of $400 mln loan for Panama Canal

WASHINGTON, Sept 17 (Reuters) - The Inter-American Development Bank said on Wednesday it had agreed in principle on the terms for a nonsovereign guarantee loan of up to $400 million for the expansion of the Panama Canal.

The proposal will be considered by the IADB board in early October, the head of the Washington-based regional bank, Luis Alberto Moreno, said in a statement.

The proposed terms were fleshed out in a meeting between Moreno and Panama's President Martin Torrijos on Wednesday.

"The IADB could not be absent from the biggest infrastructure project in our region, a venture that will undoubtedly increase our competitiveness on a global scale," Moreno added.

The $5.25 billion expansion plan for the canal will allow larger vessels to use the waterway without interfering with normal operations, the IADB said.

Does anybody know what are the actual state of the works at the Panama Canal (if are there any already)?

IDB loan for Panama Canal expansion

Written by Richard High - 09 Oct 2008

The Inter-American Development Bank (IDB) has approved a US$ 400 million loan for the Panama Canal expansion, the largest infrastructure project underway in Latin America.

The loan is for Autoridad del Canal de Panamá (ACP), the autonomous government-owned entity that manages and operates the 77 km canal linking the Atlantic and the Pacific oceans.

ACP plans to raise about US$ 2.3 billion in loans to finance the expansion program, which has an estimated cost of US$ 5.25 billion. The remainder will be covered with cash flow generated by the operation of the canal, through which about 5% of the world's seaborne freight passes annually.

The Panama Canal, which has been in operation since 1914, is approaching its maximum capacity. The expansion program, scheduled to be completed by 2014, will ensure the long-term competitiveness of the canal, which plays a crucial role in global maritime transportation, serving trade among economies around the world.

The program has four main components:

* the construction of a third set of locks, including two lock complexes and water-saving basins at each end of the canal,
* the dredging of the canal entrances on the Atlantic and the Pacific,
* the deepening and widening of the existing navigation channels,
* the raising to the maximum operational level of the Gatun Lake, which provides fresh water for the waterway.

The Panama Canal's current lock chambers are sized for container ships with a maximum capacity of 4500 TEU (20-foot equivalent units). The new lock chambers, roughly the length of four football or soccer fields, will fit 12600 TEU container ships. These locks will also use less water, as large volumes will be recycled through the adjacent basins.

During the construction phase, which started in 2007, the expansion program is expected to create up to 7000 direct jobs and around 35000 indirect jobs.

Commenting on the loan agreement, IDB president Luis Alberto Moreno, said, "The IDB has been a steadfast partner for Panama for nearly 50 years. We are proud to assist in this key investment in the future of Panama's greatest national asset, especially when conditions in international financial markets are so uncertain."

The IDB has been an integral partner for Panama since before the country took over control of the canal in 1999. The IDB supported the Panamanian government in the evaluation of expansion alternatives and in the preparation of a sustainable development strategy for the canal watershed. It also helped finance studies to quantify the benefits of the expansion program.

From October's issue of International Construction (http://www.khl.com/magazines/international-construction/detail/item27997/).

Does this project really comprise of simply the addition of a third set of locks and the overall expansion of the canal or is there more?

Panama Canal temporarily reduces rates to counter economic slowdown
1 May 2009

PANAMA CITY (AP) - The Panama Canal Authority has announced a temporary reduction in the rates it charges ships moving through the waterway, in response to international economic problems.

Starting June 1 container ships carrying less than 30 percent of cargo capacity will pay the reduced rate normally offered to empty ships, equivalent to about $57.60 per container.

The discount is scheduled to run until Sept. 30.

That is lower than the new, $72 per container rate scheduled to go into effect Friday.

Canal authorities did not offer any estimates Thursday on how much the discount would cost in lost revenues.

The canal had planned a series of rate increases to finance the $5.25 billion expansion of the waterway to handle larger ships.

Panama chooses new president amid canal expansion
3 May 2009

PANAMA CITY (AP) - A conservative supermarket magnate is favored to win presidential elections Sunday that will determine who oversees expansion of the Panama Canal, the nation's economic engine.

Ricardo Martinelli, 57, of the opposition Alliance for Change has a double-digit lead in the polls over former Housing Minister Balbina Herrera of Panama's governing coalition, which is led by the Democratic Revolutionary Party.

The winner, whose term ends in 2014, will have to guide Panama through the world economic crisis and the $5.25 billion expansion of the Panama Canal to increase its capacity and accommodate larger ships.

Both Martinelli and Herrera, 54, supported the project, but recent world economic woes have generated uncertainty over the project, which is receiving $2.3 billion in international financing.

The canal project, which was approved in a 2006 referendum, is expected to generate about 5,000 direct jobs in the small Central American nation between 2010 and 2011, when construction is at its peak, according to authorities.

The project would be "one of the points most closely attended to" by a Martinelli government, said Roberto Henriquez, vice president of Martinelli's political party.

Herrera has promised to "expand the canal satisfactorily in the programmed amount of time" and spread the capital's wealth to the rest of the country.

"My responsibility is to make the growth generated by the capital through the inter-oceanic canal reach the provinces and indigenous peoples," she said.

Panama's economy grew by an annual average of 8.7 percent over the past five years, and unemployment fell from 12 percent to 5.6 percent. The growth was fueled by foreign and state investment by the outgoing government of President Martin Torrijos. Growth this year is projected to be 3-4 percent.

In an April poll, about 50 percent of likely voters surveyed said they planned to vote for Martinelli, owner of Panama's largest supermarket chain, Super 99. Herrera earned 38 percent support.

The poll, conducted by Unimer Research International and published by Panama City's La Prensa newspaper, surveyed 1,600 Panamanians and had a sampling error margin of 2.5 percentage points. Earlier polls also suggested an advantage for Martinelli.

Also running is Guillermo Endara, a longshot candidate who served as president from 1989-1994.

Panamanians also are electing a vice president, members of Congress, mayors and other local officials. More than 2.2 million people are eligible to vote, and the country's Elections Tribunal said it expects turnout of more than 75 percent.

Panama canal sees contract by July
5 May 2009

PANAMA CITY (Reuters) - The Panama Canal Authority expects to award the biggest contract for its $5.25 billion expansion project in June or July, the head of the authority said Tuesday.

Experts are reviewing the technical aspects of the bids of three consortia received in April before the bid prices are formally unsealed, Authority President Alberto Aleman said at the Reuters Latin American Investment Summit.

"The bids are in a vault in a bank and we expect that some time in June or July when we are finished with all the technical analysis we will have a public opening of the bids," said Aleman.

"By the end of the year we should have around 96 percent of the contracts awarded and working. The expansion is proceeding very well, very much in the time that we intended."

Impreglio SpA, one of the companies participating in the tender, told investors last month it expected the contract to be awarded in May.

The Authority had previously delayed the reception of bids on the contract but Aleman insisted it would not affect plans to complete the expansion by 2014, the centenary of the waterway's opening in 1914.

The expansion project, which will allow much larger ships to transit the canal, is being funded by canal's cash flow and $2.3 billion in loans raised from multilateral lenders.

The canal expects shipping volumes to decline by 5 percent this year due to the global economic slowdown but an increase in transit fees imposed on May 1 should keep revenue flat at $2 billion compared with 2008, Aleman said.

In addition to Impreglio, other companies involved in bidding for the expansion contract include Spanish firms Sacyr Vallehermoso SA, Acciona SA, Germany's Hochtief AG and a US-Japanese group led by closely held Bechtel Corp.

FEES CUT

Canal officials are optimistic that economic stimulus packages unveiled by governments around the world will help global trade recover, but Aleman was cautious when asked how quickly shipping patterns would rebound.

The Authority last week reached out to the troubled container shipment sector, charging ships carrying cargoes of 30 percent or less than their rated capacity as if they were empty, and relaxing reservation system penalties.

"We understand if there is no market, nobody wants to be coming (through the canal) with a very low (used) capacity," said Aleman, adding the relaxed fees would be re-evaluated at the end of the canal's fiscal year in September.

Aleman said grain traffic is up this year, thanks to more shipments from the Mississippi basin to Asian markets. Auto carrier and container traffic has fallen, forcing shippers to consolidate routes.

Cruise ship traffic, which is a small percentage of canal revenue, is up slightly as cruise ships begin spending more time in Panama on a general trend of increased tourism.

"The canal is a very exciting place to come see," he said, noting one cruise line is using Panama as a seasonal home port. "I am sure that other companies will follow."

Panama Canal forecasts 5 pct drop in cargo this year as crisis slows global trade
20 May 2009

PANAMA CITY (AP) - The Panama Canal Authority expects 5 percent less cargo to pass through its locks in 2009 as the world economic crisis slows global trade.

A report from the Authority's office of research and analysis says that cargo shipments have already dipped 2.4 percent to 179.3 million tons since October 2008.

The slowdown comes just as the canal is undergoing a $5.3 billion expansion project, due for completion in 2014.

Wednesday's report says that recession in the U.S., the canal's top customer, is slashing transit, and will likely keep cargo shipments down through 2010.

The Authority says it expects transit to rebound in 2011 as the world economy recovers. Some 5 percent of global trade passes through the canal.

Panama says canal contract winner not chosen yet

PANAMA CITY, June 12 (Reuters) - Panama said on Friday it has not picked yet the winner of the largest contract in the Panama Canal's $5.25 billion expansion, playing down comments from a company claiming it was charging ahead in the tender.

Massimo Ponzellini, chairman of Impregilo SpA , said earlier on Friday that a consortium including the Italian company had obtained top marks in the technical appraisal of bids to expand the Panama Canal.

Ponzellini also said tenders from the three consortia bidding on the project would be opened June 29.

"The ACP categorically denies the statements by Ponzellini," the Panama Canal Authority, or ACP, said in a statement referring to both the choosing of a winner and a date for making the announcement.

Technical evaluations of three consortia's proposals to build locks and water-saving basins have not concluded, the ACP said. Bids for the project are locked in a Panama bank vault and will be opened in public when evaluations finish.

Impregilo has said the whole Panama expansion project is worth $3.7 billion and it has a potential 37 percent stake in any contract.

The ACP has $3.35 billion budgeted for the locks and water-saving basins. It has said the expansion project, due to conclude in 2014, is on time and on budget.

Panama Canal board to open expansion bids July 8

PANAMA CITY, July 2 (Reuters) - The Panama Canal Authority said on Thursday it will open bids for the largest contract in the canal's $5.25 billion expansion on Wednesday, July 8.

The technical evaluations of the proposals by the three consortia seeking the lucrative contract will also be revealed on Wednesday. These will combined with the bids to calculate the "best value" proposal for the canal expansion.

A winner will not be immediately announced as the authority intends to vet the bids for several weeks after opening them.

The canal has $3.3 billion budgeted for the contract, which will include construction of new locks.

The three bidding groups include the CANAL consortium, led by Spanish companies Actividades de Construccion y Servicios SA and Acciona SA and Germany's Hochtief AG ; a Japanese-U.S. group led by privately held Bechtel; and a third made up of Spain's Sacyr Vallehermoso SA and Italy's Impreglio .

Bechtel financially fittest in Panama bid-analysts

MILAN/PANAMA CITY, July 7 (Reuters) - A team led by U.S. group Bechtel is financially best placed to win the race for an estimated $3.3 billion contract to expand the Panama Canal, analysts said.

The Panama Canal Authority (ACP) overseeing the bidding will open price bids on Wednesday but may take several weeks before announcing a winner. This $3.3 billion contract is the largest chunk of a $5.25 billion project to expand the canal.

Bids were placed months before a presidential election brought into power millionaire supermarket magnate Ricardo Martinelli, bucking a trend of left-wing leadership victories in Latin America. The new president took office last Wednesday.

The other two bidders are a consortium including Spanish giants ACS, FCC and Acciona, and a smaller group led by Sacyr of Spain and Impregilo of Italy.

The closely watched decision was initially expected before Martinelli took office. There has been speculation that bids could exceed Panama's budget and that the project could incur cost overruns.

The expansion of the canal, the biggest contract in Latin America, is to be completed by 2014 which is the 100th anniverary of the first transit.

"Such a complex project must have very solid balance sheet guarantees. The Americans have these guarantees and their project is technically as good as the one of Sacyr-Impregilo," a Milan-based analyst said on condition of anonymity.

The analyst said if the project incurred cost overruns a contractor with high equity and low debt like Bechtel could get financing more easily than an indebted one, making sure that works continued even if problems arose.

Although Sacyr sold its road toll business in a cash deal worth about 2.9 billion euros ($4 billion) in May, the building-to-services firm will still close the year with debts of 11 billion euros.

A contract as big as the Canal project would be a welcome shot in the arm. Sacyr leads the consortium with a 49 percent stake and Impregilo has 48 percent.

NICE BOOST

Sacyr has an order and service portfolio of 35 billion euros and assuming it took 49 percent of the value of the contract, in line with its stake in the consortium, a bid priced in line with ACP's budget would boost its portfolio by slightly more than 3 percent.

Impregilo has an order book of 19 billion euros and on a similar basis the impact would be about 6 percent.

The Sacyr-Impregilo group is the only one to have a local partner, Cusa, on board. Having work force and equipment on hand makes it easier for authorisations and could be an edge for the group. Its experience in doing work requiring technology needed for the Canal expansion, such as the 800-metre-long Yacyreta dam between Argentina and Paraguay, is also seen as a plus.

The other consortium led by ACS comes to the bid in a stronger financial position than Sacyr-Impregilo, particularly after Acciona sold its stake in power generator Endesa to Italy's Enel for 11.1 billion euros.

Net debt at ACS, one of Spain's least indebted construction companies, fell 4 percent to about 8.9 billion euros at the end of March from end-December. An analyst in Spain said the impact on his target prices for ACS, which has experience in terms of hydraulic works, would be below 5 percent.

Privately owned Bechtel, which has teamed up with Japan's Taisei Corporation and Mitsubishi Corporation, had booked $35 billion in new work in 2008.

KEY FACTOR PRICE

Will Gabrielski, a U.S.-based engineering analyst at equity research firm Broadpoint AmTech, said price was a key factor.

"I think they're looking at it pretty closely on price," Gabrielski said.

A report in May by Spanish newspaper Cinco Dias said the bids would be considerably higher that the ACP hopes -- a scenario observers said could complicate awarding the contract.

Expansion-related work is under way and the ACP insists expansion is on time and on budget.

Panamanian engineer Jorge Sanchiz, who has experience in canal-related projects, said he expected considerable cost overruns in the final project, due to rising cement prices and other unforeseen costs.

Sanchiz wants the new Martinelli administration to intervene in favour of an independent review of the bidding process.

Martinelli's canal minister, Romulo Roux, was unavailable for comment. But Martinelli said a change in government would not affect normal operation at the canal, which is considered largely free of government interference.

($1=.7154 Euro)

^^ :? the group led by Sacyr and Impeglio has already won the bid

edit: oh I see, the article is dated 7th July... the announcement was made yesterday

:)

Sacyr Shrs Indicated To Open +8% After Panama Canal Contract
9 July 2009

MADRID (Dow Jones)--Shares of Sacyr Vallehermoso SA (SYV.MC) soared Thursday after a group led by the Spanish infrastructure company and Italy's Impregilo SpA (IPG.MI) Wednesday won a $3.12 billion contract to build new locks for the Panama Canal.

At 0754 GMT, the stock traded up EUR1.22, or 13%, at EUR10.90, after rising as much as 18% in the first trades of the day. The stock has a very limited free float, and traders said news of the contract was causing some short sellers to cover positions, which squeezed the stock price higher.

The group also includes the Netherlands' Jan de Nul NV and Panama's Constructora Urbana SA.

The new locks will double the canal's traffic capacity and allow wider and longer ships to move between the Atlantic and Pacific oceans. The contract is the most significant work on the canal expansion, which is estimated to be worth a total of $5.25 billion.

The consortium led by Sacyr and Impregilo beat a group led by Bechtel Group Inc., which offered to build the new set of locks for $4.19 billion, and another group, which included Actividades de Construccion y Servicios SA (ACS.MC), Acciona SA (ANA.MC), Fomento de Construcciones y Contratos SA (FCC.MC) and Germany's Hochtief AG (HOT.XE), and which planned to charge $5.98 billion.

Spanish brokerage Banesto Bolsa estimates the contract secures Sacyr's construction division revenue of EUR173 million a year for a five-year period, assuming a 40% stake for Sacyr. The amount is roughly equivalent to 3.1% of group sales, it added. Sacyr hasn't disclosed what stake of the consortium it has.

The Canal Authority will finance the expansion with $2.3 billion worth of loans from five international lenders - the European Investment Bank, the Japan Bank for International Cooperation, the Inter-American Development Bank, the Andean Development Corp. and the World Bank's financial arm, the International Finance Corp.

The authority plans to finance the remainder of the project through canal-generated cash flow.

Largest part of Panama Canal expansion contract awarded to Spanish-led consortium
15 July 2009

PANAMA CITY (AP) - The Panama Canal Authority has awarded the largest contract in its canal expansion project to Grupos Unidos por el Canal, a consortium led by Spanish construction firm Sacyr-Vallehermoso SA.

The winning bid for the design and construction of the new lock system intended to widen the canal was $3.02 billion, well below the maximum allowable price of $3.48 billion.

The canal authority is spending $5.25 billion to widen the 50-mile (80-kilometer) canal by 2014. The canal opened in 1914 and is too narrow for today's larger freighters.

The announcement was made Wednesday. The consortium also includes Italy's Impregilo S.p.A., Belgian contractor Jan de Nul, and Panama's Constructora Urbana, S.A., among others.

Panama ambition kicking off at last
17 July 2009
Tradewinds

The deal is done - but will a $5.25bn expansion project see the world's most famous canal triumph over adversity?

The world's most important maritime-infrastructure project should finally begin its descent down the slipway with the awarding of a $3bn-plus building contract any day now.

Confirmation that an Italian/Spanish construction consortium can proceed with the expansion of the Panama Canal will bring relief to Beijing and Athens as much as it will to Panama City.

The canal, linking the Atlantic and Pacific oceans, handles 5% of world waterborne cargoes but cannot cope with the new generation of post-panamax vessels.

The widening programme would allow the mixture of canals and natural inland waterways to take ships of over 1,200 feet (365 metres) long.

Impregilo and Sacyr Vallehermoso have won the $3.1bn contract to construct the new locks that are needed for the grander $5.25bn scheme to widen the waterway.

New Panamanian president Ricardo Martinelli needed the contracts in place as soon as possible if he is to stand a chance of meeting the symbolic deadline of 2014.

That is when this vital artery of global trade will celebrate its 100th anniversary, a major triumph of engineering but also - like the grandiose inland-waterway projects of Russia under Stalin - one tinged with sadness.

There was no Russian dictator forcing prisoners to build until they dropped but malaria cut through the workforce as they slashed their way through the jungles of Central America - 25,000 workers are estimated to have died on the Panama project over the course of 10 years. Some critics still question whether a new scheme is really worth it. Due to the credit crunch and recession, trade transiting the canal is expected to drop 5% this year and there are longer-term threats from the opening up of the Northwest Passage.

Global warming is causing the Arctic ice to melt and the current flurry of political - and military - activity in northern waters reflects expectations of new mineral exploitation and shipping routes.

A general estimate of the distance between Europe and Asia through the Panama Canal is 12,600 nautical miles. That could be reduced to less than 8,000 via the fabled Northwest Passage.

The Panamanians have not always shown themselves sensitive to the prevailing commercial environment, either. They raised transit fees on 1 May, believing this would safeguard their $2bn-worth of annual revenues despite the fall-off in traffic.

They have since had to make concessions to the hard-pressed container-shipping industry but this is a sensitive area given that the income provides a huge part of the country's wealth.

And the decision to reward Impregilo and Sacyr is a brave one, as it ditches the bid put forward by US engineering group Bechtel.

The US Senate is currently considering whether to proceed with a Free Trade Agreement with Panama. It has been held up due to political concerns in the US about the country's archaic labour laws and the territory allegedly being used for tax evasion.

Panama would like foreign investment from its wealthy near-neighbour, which originally built the canal and controlled it until the beginning of this decade.

And while US companies would like to be involved in the construction process, railways that send containers from coast to coast across the US will be one of the losers from the canal's expansion.

Another loser will be Nicaragua, which has long fantasised about building its own link between the Atlantic and Pacific. That was unlikely to happen, so the only question now is whether modern-day engineering can match that of earlier in the century when it comes to deadlines.

The original work was completed two years early, while the new scheme was approved in a Panamanian referendum of 2006. There have been endless delays since, leaving the Spanish and Italians in a race against time to complete a job that will influence the shape of world trade.

Perdue set to visit Panama to discuss Panama Canal expansion
19 September 2009

ATLANTA (AP) - Gov. Sonny Perdue plans to lead a state delegation to Panama to discuss Panama Canal expansion and the proposed Savannah Harbor expansion project.

Senior leaders from the Georgia Port Authority and the Georgia Department of Economic Development will accompany Perdue on the Sept. 23-26 trip. The trip is set to include a meeting with the Panama Canal Authority and with Maersk, the Georgia Port Authority's biggest customer.

A new set of locks in the Panama Canal set to open in 2014 will double capacity and allow bigger ships to pass through.

The Georgia Port Authority is trying to get approval to deepen the Savannah River to handle the larger ships that will be going through the canal.

Panama may build bridge or tunnel across Canal

PANAMA CITY, Nov. 18 (Xinhua) -- The Panamanian government is planning to build a bridge or a tunnel across the Panama Canal near the Atlantic coast, the Panama Canal Authority (ACP) said on Wednesday.

The authorities will invite bidders for a contract in January. The winning company must analyze and present the feasibility of building a bridge over the Canal or a tunnel across the Canal.

Both alternatives will be studied independently, the ACP said.

"It is estimated that the presentation of the studies will last seven months," and a committee formed by engineers will be in charge of evaluating the proposals, and it is possible to hire external advisors to guarantee efficiency, the ACP said.

Panama began to modernize the Canal in 2007 and is scheduled to finish the work in 2014 at the latest, to celebrate the 100th anniversary of the Canal. The project will cost about 5.25 billion U.S. dollars.

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http://www.1h2o.org/images/uploads/Panama_Canal_aerial_view.jpg

http://www.canal-cruise-panama.com/New-Canal-Locks-01.jpg

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more info: http://en.wikipedia.org/wiki/Panama_Canal_expansion_project





The new possibilities with the new canal:

New Panamax
Plans to build bigger locks have led to the creation of "New Panamax", with maximum length overall of 1,200 ft (365.76 m), beam 160 ft (48.77 m) and draft in tropical freshwater 50 ft (15.24 m).[7] Naval architects and civil engineers are already taking into account these dimensions for container ships.[8] The world's largest cruise ship Oasis of the Seas has almost New Panamax dimensions with height difficult to pass under the Bridge of the Americas even at low tide.

However, even before the revised dimensions were announced, the Maersk E-class - like the Emma Maersk; as well as many large tankers - ULCCs; and some bulk carriers, VLOCs - will not be able to pass through even the new, much larger locks.

http://www.derindusunce.org/wp-content/uploads/2007/07/panamax1.jpg

FEATURE-Houston eyes Asia trade as Panama Canal expands

LA PORTE, Texas, Dec 14 (Reuters) - Warehouses holding everything from beer kegs to frozen chickens crowd the roadside along Highway 146 south of Houston, and a ferocious building boom is adding acres more, thanks to an even bigger project 1,800 miles (2,900 km) away in Panama.

A $5.25 billion plan to triple the Panama Canal's capacity finishes in 2014, opening the way to Houston for mega-sized cargo vessels that can't squeeze through the canal's current locks and don't want to steam around South America.

The prospect of bigger ships, and more of them, could be a boon for the Port of Houston, which already handles more foreign tonnage than any other U.S. port.

With an eye toward feeding the U.S. consumer's insatiable demand for Asian-made goods, U.S. retailers like Wal-Mart Stores Inc and Home Depot have built millions of square feet (hundreds of thousands of square meters) of warehouse space around Houston ports.

"They're popping up every place," said Jimmy Jamison, director of operations at the Port of Houston Authority, referring to the warehouses. "If they wait until the Panama Canal expansion, that property won't be there."

Many such warehouses were built on "spec," or without a dedicated tenant, and many are vacant.

Port officials expect spare capacity to disappear once the Panama Canal opens two new sets of locks -- the first major expansion since the canal opened in 1914. The locks will give massive container cargo ships from giant Asian exporters like China an all-water route to Gulf Coast ports like Houston.

At present the biggest cargo ships from Asia must unload their goods onto trucks or rail cars on the U.S. West Coast, or travel via the Suez Canal to the East Coast.

After the expansion, shipping containers unloaded onto Houston's docks -- which now go mainly to other Texas cities like Dallas and San Antonio -- could end up in U.S. Midwestern cities like Chicago. Houston is the closest U.S. port to the Panama Canal.

The canal widening could spark a shift in global shipping patterns and could lessen the reliance on West Coast ports like Los Angeles and Long Beach, which have long dominated the U.S. market for unloading cargo containers.

'A GAME-CHANGER'

Other ports on the Gulf Coast and East Coast -- including New Orleans, New York, New Jersey, Georgia and South Carolina -- are weighing expansion plans to lure the super-sized ships.

"It's really a game-changer," said Chris Bonura, spokesman for the Port of New Orleans, referring to the canal expansion.

U.S. imports from East Asian nations like China and Japan are valued at about $410 billion a year, and about half of that is handled by ports in California, Oregon and Washington, according to the Greater Houston Partnership business group.

But about 70 percent of cargo unloaded on the West Coast is sent via trucks and railways to markets east of the Rocky Mountains. That creates an opening for ports like Houston to extend their reach into the Midwest.

"The expansion that is going on in Panama has got the Port of Houston written all over it," said Jeff Moseley, president of the group.

THE KING OF LOGISTICS

To the east of Houston lies Cedar Crossing Business Park in Baytown, the largest industrial park in Texas, which houses warehouses owned by Walmart, Home Depot and others.

Walmart's 4 million-square-foot (370,000-square-meter) facility at Cedar Crossing, opened in 2005, is one of the largest such facilities in the world. A Walmart spokesman declined to comment.

"We can all agree that they are kind of the king of logistics," Moseley said of Walmart, calling its decision to locate in Houston "a loud resounding validation of this strategic location."

Home Depot operates a 750,000 square-foot (70,000 square-meter) distribution center in Cedar Crossing, but most of the cargo housed there currently arrives via railroads from the West Coast, said Jeff Siewert, Home Depot's director of international logistics.

Home Depot, which imports goods from about 30 Asian countries including China, Vietnam and Thailand, would consider a water-borne route to Houston if its shippers offered one, Siewert said. "As we think about our opportunities to ship all-water into Houston, that has always been on our radar screen," Siewert said.

UP FOR GRABS

Some U.S. analysts have predicted that about 20 percent of cargo ships now serving West Coast ports could divert to Houston once the canal is widened to handle a huge new breed of container vessel known as post-Panamax ships.

"There is going to be some marketshare gain," said Paul Bingham, managing director at IHS Global Insight, an economic forecaster, who pegged the diversion rate at 5-10 percent.

About 14 percent of container traffic handled by the Port of Houston comes through the Panama Canal, a percentage that port officials say could grow to about 25 percent by 2020.

The port will spend about $1.2 billion to expand its Bayport Container Terminal to enable it to handle about 1.4 million containers per year. The port is buying giant cranes capable of unloading post-Panamax cargo ships, which can carry up to 12,600 containers, almost three times the current number.

Canal expansion sets off race among Gulf ports
Tue Dec 29, 2:47 pm ET
By ALAN SAYRE, AP Business Writer Alan Sayre

NEW ORLEANS – With the recession showing signs of ebbing, Gulf of Mexico ports hope hundreds of millions of dollars in expansion projects proposed before the downturn will help them capture more trade as the world economy recovers.

A $5.25 billion project to expand the Panama Canal will allow the largest container ships to cut through to the eastern side of North America — and perhaps cut into the dominance of West Coast ports handling freight from Asia.

Even though the downturn has clouded future trade patterns, port officials said now is the time to be getting ready. Expansions pegged to the Panama Canal project, which is due for completion in 2014, had largely been on the drawing board before the recession began.

"There are some ports throughout North America and that have said, 'Let's wait and see how long-term this economic environment is going to last,'" said Don Allee, chief executive of the Mississippi State Port Authority at Gulfport. "But if a port decides to wait, it could be a costly decision."

The Panama Canal project, approved by Panamanian voters in a 2006 referendum, involves construction of two larger locks expected to double the 50-mile canal's capacity within 20 years. The project includes $2.3 billion in institutional financing.

The waterway now moves about 5 percent of the world's cargo.

The largest container vessel that can now use the canal has a capacity of about 5,000 TEUs — or 20-foot-equivalent units, generally the standard container size that can be transferred easily from ship to rail or truck. The expanded canal will be able to handle giant ships that can carry more than 14,000 TEUs.

Since the 1950s, containers — basically enclosed trailers without wheels — have moved to dominate the shipping industry. Containers can be quickly transferred to rail cars or put on flatbed trucks.

The largest Gulf Coast container port is the Port of Houston, which, according to the American Association of Port Authorities, handled nearly 1.8 million TEUs in 2008. New Orleans was a distant second with 235,324, followed by Gulfport with 214,074.

Los Angeles handled 7.8 million TEUs last year, while Long Beach took in nearly another 6.4 million, much of both totals coming from Asia. Long Beach has run out of room for expansion and is concentrating on improving efficiency. During booming times, both ports have congestion problems with ships waiting at anchor for days before being unloaded.

Jimmy Lyons, head of the Alabama State Port Authority, which operates the Mobile port, believes the Gulf Coast will eventually be a lower-cost alternative to the West, despite the additional 4,500 miles ships from Asia have to travel to reach the Gulf of Mexico.

"Instead of bringing a container into Long Beach, and dragging it by rail all the way to Memphis, they'll be able to bring it into Mobile, then send it to Memphis," Lyons said.

Gulf Coast port expansion projects being developed and proposed total over $1 billion.

The Port of New Orleans is looking for private investors for a $237 million expansion of its container terminal. Tampa, which opened its container terminal a couple of years ago, is expanding berths and storage space and adding two cranes at a cost of $17 million. Mobile, which opened its second container terminal last year at a cost of $300 million, is working on a $75 million facility to transfer container cargo to five railroad outlets and a turning basin to handle larger ships. Gulfport is in line for $570 million in federal funds to elevate the port to 25 feet above sea level.

Tampa's new container terminal, which handled about 44,000 TEUs last year, hopes to attract freight that would otherwise have to be brought by rail from West Coast ports to Atlanta or St. Louis and put on trucks before coming to Florida, said Richard Wainio, the port's chief executive.

But a trade expert warns that predictions of more trade coming into Gulf Coast ports may come up short. Marc Levinson, an economist and author of "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger," said there are numerous post-recession unknowns that could affect shipping.

For example, there is congestion in the U.S. freight system.

"Shippers are just not as confident that cargoes are going to arrive on time like they used to," he said. "That's one factor that's going to reduce the growth in international trade."

And the federal government is imposing new environmental standards — such as limits on diesel emissions — on U.S. ports.

Levinson said that after the recession ends, foreign companies could decide it's cheaper to build plants in the United States — rather than pay expected higher shipping costs with less delivery reliability.

Since the Gulf ports don't have channels deep enough to handle the largest container vessels, almost all plans call for the initial transfer of cargo into smaller ships. Such facilities already exist in the Caribbean. But the state of Louisiana is trying to attract enough private investors to build a $1 billion-plus transfer point off the mouth of the Mississippi River in the Gulf.

The project's legislative sponsor, state Sen. A.G. Crowe, said the largest ships would be able to transfer cargo to smaller ships for calls all along the Gulf Coast and up the Mississippi River.

Although port officials agree that the competition won't be a winner-take-all affair and likely result in more deliveries to regional markets from ships that call at several ports, the competition is steep.

"Could there be a case for overbuild of infrastructure? Absolutely," said Gary LaGrance, executive director of the Port of New Orleans. "When is the time to build? Absolutely now, even with a global downturn in the economy. When it gets good again, it's really going to get good."

Panama marks 10 years since canal handover, cites revenues of $4.75 billion in decade
30 December 2009

PANAMA CITY (AP) - Panama has made $4.75 billion from the Panama Canal since taking over operations a decade ago, more than twice what it received in the 85 years the United States operated the waterway, the operating authority said Wednesday.

Thursday marks the 10th anniversary of the handover of the canal by the U.S., which opened the waterway linking the Atlantic and Pacific oceans in 1914. It is now run by an autonomous government agency, the Panama Canal Authority.

"We have demonstrated to the world that we are not only able to operate the canal, but we can do it efficiently and with big benefits for the country," said the authority's head, Alberto Aleman Zubieta. "Today, we serve customers better."

The canal charges ships fees for using the waterway, and income from those fees grew from $201 million in 2000 to $780 million in 2009.

Panama received a total of $1.83 billion from the canal in the 85 years it was run by the U.S., according to the authority's report.

The canal authority is spending $5.25 billion to widen the 50-mile-long (80-kilometer) canal by 2014, because the waterway is too narrow for today's larger freighters.

Precisely when shall the expanded canal open for traffic?

What precisely are the sizes of the ships allowed?

Old Panama canal locks are 1050 feet long, 110 feet wide and 41,2 feet deep.

Safety margin is required in all directions. Panama canal normally requires 85 feet free length - allowing 965 foot long ships, 4 feet free width - allowing 106 feet free width, and 1,7 feet free depth - allowing 39,5 feet draught. There have been exceptions. The longest ship to pass was 973 feet long (77 feet free length), the widest to pass were 108 feet 4 inches wide (leaving 1 foot 8 inches free width).

The new lock sizes are supposed to be 1400 feet long, 180 feet wide, 60 feet deep. What shall the required clearances and allowed ship dimensions be?

Precisely when shall the expanded canal open for traffic?

What precisely are the sizes of the ships allowed?

Old Panama canal locks are 1050 feet long, 110 feet wide and 41,2 feet deep.

Safety margin is required in all directions. Panama canal normally requires 85 feet free length - allowing 965 foot long ships, 4 feet free width - allowing 106 feet free width, and 1,7 feet free depth - allowing 39,5 feet draught. There have been exceptions. The longest ship to pass was 973 feet long (77 feet free length), the widest to pass were 108 feet 4 inches wide (leaving 1 foot 8 inches free width).

The new lock sizes are supposed to be 1400 feet long, 180 feet wide, 60 feet deep. What shall the required clearances and allowed ship dimensions be?

It is estimated that the project will be completed by 2014 and will cost $5.3 billion; this sum is expected to be recovered within 11 years.

After this expansion, the Panama Canal will be able to handle vessels of cargo capacity up to 13,000 twenty-foot equivalent units (TEU)[5]; currently, it can only handle vessels up to about 5,000 TEU.[6] A third set of locks – 1,400 ft (426.72 m) long, 180 ft (54.86 m) wide, with a draft of 60 ft (18.29 m) – will supplement the two existing sets.

[edit] Comparison of sizes
Class Panamax-------------------------Panamax II
Length 1,050 ft (320.04 m)------------- 1,400 ft (426.72 m)
Width 110 ft (33.53 m) -----------------180 ft (54.86 m)
Draft 41 ft (12.50 m) -------------------60 ft (18.29 m)
TEU 5000 ------------------------------12000

New Panamax
Plans to build bigger locks have led to the creation of "New Panamax", with maximum length overall of 1,200 ft (365.76 m), beam 160 ft (48.77 m) and draft in tropical freshwater 50 ft (15.24 m).[7] Naval architects and civil engineers are already taking into account these dimensions for container ships.[8] The world's largest cruise ship Oasis of the Seas has almost New Panamax dimensions with height difficult to pass under the Bridge of the Americas even at low tide.

However, even before the revised dimensions were announced, the Maersk E-class - like the Emma Maersk; as well as many large tankers - ULCCs; and some bulk carriers, VLOCs - will not be able to pass through even the new, much larger locks.

Link: http://en.wikipedia.org/wiki/Panamax

I thought the term Panamax meant it could pass through the canal!

A third set of locks – 1,400 ft (426.72 m) long, 180 ft (54.86 m) wide, with a draft of 60 ft (18.29 m) – will supplement the two existing sets.

[edit] Comparison of sizes
Class Panamax-------------------------Panamax II
Length 1,050 ft (320.04 m)------------- 1,400 ft (426.72 m)
Width 110 ft (33.53 m) -----------------180 ft (54.86 m)
Draft 41 ft (12.50 m) -------------------60 ft (18.29 m)
TEU 5000 ------------------------------12000

New Panamax
Plans to build bigger locks have led to the creation of "New Panamax", with maximum length overall of 1,200 ft (365.76 m), beam 160 ft (48.77 m) and draft in tropical freshwater 50 ft (15.24 m).[7] http://en.wikipedia.org/wiki/Panamax

Er, I read it. This is what inspired my question.

Known clearances for Panamax:
Length 85 feet
Width 4 feet
Draught 1,7 feet

Supposed clearances for new Panamax:
Length 200 feet
Width 20 feet
Draught 10 feet.

Can someone verify that so much clearance shall be required?

http://www.wired.com/wired/archive/15.03/images/ST_36_panama2_f.jpg

http://www.canal-cruise-panama.com/New-Canal-Locks-01.jpg

http://www.canal-cruise-panama.com/New-Canal-Locks-02.jpg



ALL INFO: http://www.pancanal.com/eng/expansion/index.html

Shipping’s Big Shadow
11 January 2010
Journal of Commerce

If there’s a constant theme in freight transportation’s evolution in recent times, it’s that bigger is better. More than other operators across the shipping spectrum, container ship lines have been at the forefront of the drive for economies of scale, continually stretching the envelope on ship design by ordering larger vessels designed to keep unit operating costs down while matching capacity to forecasts for soaring demand.

Today’s largest container ships have nominal capacities exceeding 14,000 TEUs, nearly twice that of the biggest ships a decade ago. They’re nearly a quarter-mile long, wider than a football field, and ride as high in the water as a 15-story building — big enough to cast a shadow over the industry for years to come.

In an industry stacking up losses faster than at any time in its 50-year history, the carriers’ huge orders for more of them are a second wave of the financial tsunami that hit carriers with the downturn in global shipping demand.

Carriers ordered scores of the big ships just before global trade went into reverse. Now, reeling from a one-two punch of increased capacity and lower volume, they’re regretting those ill-timed decisions. Even worse for carriers, many of the ships ordered as late as 2007 are still being launched into a depressed, oversupplied market.

Vessel deliveries will dry up after current contracts are completed in two or three years, but the megaship is here to stay. London-based shipping consultant and analyst AXS-Alphaliner reported at the end of November that 267 vessels with capacities of at least 7,500 TEUs were in service. These new vessels are built to operate for 20 years or more, and when carriers eventually resume buying, analysts predict they’ll opt for a new wave of super-sized vessels.

The economics of the megaships are too compelling to ignore. A 12,000-TEU ship can be operated with the same 13 or 14 crewmembers required by a ship with half the capacity. Per-unit costs of capital investment and fuel consumption are substantially less than for two vessels of half the size.

“They definitely provide economies of scale when full,” said Mark Page, director of Drewry Shipping Consultants in London. “In the long term, when more cargo is available, we will see the big ships justify themselves, but it’s going to be several years before they appear to be something that’s the right size for the trade instead of too big.”

This isn’t the first time carriers have bought transportation equipment a size or two larger than they immediately need. Carriers in all transportation modes use the largest vessels possible to gain economies of scale — bigger trailers for truckers, longer trains and larger railcars for railroads, and jumbo cargo and passenger aircraft for air transport providers. More shippers are paying close attention to economies, as well, holding back orders to consolidate partial loads into full containers on the water and from less-than-truckload to cheaper truckload for domestic shipments.

But seldom have carriers moved as quickly and emphatically as container lines did in super-sizing their fleets in response to the sustained boom in trade accompanying China’s 2001 admission to the World Trade Organization and a credit-fueled buying binge by U.S. and European consumers.

At the market peak two years ago, when there were predictions a “tsunami of containers” would hit U.S. shores, container ship orders totaled nearly 50 percent of existing capacity, and most of the ships on order comprised 7,500-TEU-plus vessels. With global container trade having risen at a compound rate of more than 9 percent a year since the early 1990s, it seemed a good investment — until nearly everyone had the same idea.

Now the ship orders have turned the economic principles of operating a few 12,500-TEU vessels in a different direction. “The thinking behind each of those large ships was sound, but the combined effect of everybody doing it was insane,” said Andrew Penfold, director of Ocean Shipping Consultants of London. “It was the madness of the crowd.”

Even amid the concerns about capacity, however, the ship orders remain largely intact. That’s in part because of the difficulty carriers, facing heavy financial penalties, have in extracting themselves from the orders, but it’s also a signal of the confidence the container ship companies have over the long term in the operating economics of the vessels. As of Jan. 1, there were 770 container ships on order worldwide, totaling 4.7 million TEUs and representing 36 percent of the existing fleet, according to AXS-Alphaliner.

When CMA CGM took delivery of what it called the world’s largest container ship in November, the 13,300-TEU CMA CGM Christoph Colomb, the carrier trumpeted the economies of scale and energy-saving technology. Perhaps even more important, when the troubled French carrier announced a financial overhaul in late December that included a new look at ship orders, CMA CGM said it hoped to cancel its orders for 15 smaller 3,600-TEU ships while keeping its orders for eight more ships of the CMA CGM Christoph Colomb scale in place.

Discussion of future orders of large container ships is academic in today’s market, but the consensus is the maximum size for container ships will stay about where it is for several years after vessel orders resume.

“We feel the ship size of around 14,000 TEUs is probably the maximum we will see for the foreseeable future,” Penfold said. “To make a worthwhile economic saving, carriers want a 10 to 12 percent improvement in slot-mile costs. Going from 6,000 TEUs to 9,000 produces that kind of savings. So does going from 9,000 to 14,000. But if you want to make another 10 to 12 percent savings beyond the 14,000-TEU ship, you’ve got to go out to about a 20,000-TEU ship, and that really is regarded as science fiction.”

That’s not to say some aren’t thinking about it. A decade ago, a professor at Delft University of Technology in the Netherlands floated the concept of an 18,000-TEU “Malaccamax” ship whose 69-foot loaded draft would barely squeeze through the Strait of Malacca. In 2008, South Korea’s STX Shipbuilding unveiled an even more eye-popping design for a 22,000-TEU ship.

Carriers aren’t lining up to order these behemoths. Such a ship would require huge volumes of cargo to achieve the desired per-slot savings. Such volumes would overwhelm many marine terminals and inland transportation facilities, requiring days-long port calls that would cancel out the savings at sea.

Even if the volume and port facilities were sufficient, such a large ship would increase costs for capital investment and operations. For example, these ships probably would require twin propellers, or screws, for propulsion.

“A twin-screw ship will cost something like $15 million more in capital costs. Fuel consumption will be about 3 percent higher than a single-screw ship, and manning and maintenance costs will increase by about 70 percent because you have to look after two big engines. The combined effect is to knock twin-screw out of court when considered on a slot-cost basis,” said David Tozer, business manager for container ships at Lloyd’s Register, the London-based ship classification society.

Today’s largest ships are limited to Asia-Europe routes that offer the optimum combination of high volumes, long voyages and deep, efficient ports. These routes use the lock-free Suez Canal, which has ample draft for the 50-plus feet that the largest container ships require.

The construction of wider locks at the Panama Canal will provide carriers with additional options for deploying their super-sized container ships. After 2014, the Panama Canal will accommodate “New Panamax” ships of about 12,500 TEUs, compared with the current Panamax capacity of about 5,000 TEUs.

After 2014, carriers will be able to concentrate their largest ships on Asia-Europe routes while deploying slightly smaller vessels on round-the-world services using the Panama Canal, linking those services with an expanded network of feeder services.

Ports are trying to get into the game by dredging channels and upgrading terminals. The crane of choice at container ports is the super-post-Panamax size that can reach across 22 or 23 rows of containers on a ship’s deck. That compares with 17 or 18 for a standard port-Panamax crane and a mere 13 for a Panamax model.

Experts said the expanded canal would affect future decisions on ship orders.

“If I am ordering ships, do I buy a series of 14,000-TEU ships which are slightly cheaper than the 12,000-TEU ship? Or do I go for 12,000-TEU ships which I can trade in the Asia-Europe, or the Pacific, or the round-the-world trade, which will come back?” Penfold said. “Our conclusion, and the market’s, seems to be that the focus will be on these 12,000-TEU ships; 14,500 TEUs will become the new post-Panamax.”

Most of the 10,000-TEU-plus ships ordered in recent years were designed to match the new locks’ dimensions, designed for ships up to 1,200 feet long and 161 feet wide. Germanischer Lloyd, the German ship classification society, recently unveiled a “New Panamax” design for a 14,000-TEU ship it said would fit the new locks.

Asaf Ashar, research professor at the National Ports & Waterways Institute of the University of New Orleans, said the expanded Panama Canal and the changing composition of the container ship fleet would alter shipping patterns. He predicts a revival of round-the-world services, and said East Coast ports off the megaships’ current path will be served by feeders — or even direct services — using 6,000- to 9,000-TEU ships, a size the Panama Canal Authority expects to be the workhorse of the waterway after 2014.

“The investment in huge ships will encourage more transshipment,” Ashar said. For shippers and consignees, that could mean longer transit times, something that’s already happening as carriers optimize their services around their largest vessels.

AXS-Alphaliner reported last month that although more than 10 percent of container ships were idle, that number included only two ships with greater than 7,500 TEUs of capacity, suggesting carriers are opting to idle smaller vessels while putting more containers on fewer ships.

Container ship lines are using every trick in the book to put their biggest ships to work while minimizing capacity. Major carriers now routinely engage in slow-steaming, running vessels at 17 to 19 knots instead of 20 to 22, or even “super slow-steaming” as slow as 14 knots on backhaul routes such as Europe to Asia.

Opinion is divided on whether carriers will return to faster speeds when trade volume recovers. Slow-steaming saves on fuel costs and reduces emissions, but a carrier operating a ship at half-speed is effectively using only half of an expensive asset. Many of the big ships cost $150 million or more apiece and were ordered in sets of eight or 10, making them too expensive to use as warehouses on water.

For the new generation of container ships to prove their worth, what’s really needed is a global economic recovery that brings container volume growth closer to its historic pattern of three times global GDP. “We’ve made the bed,” Penfold said. “Now it’s just a question of the economics playing out.”

Panama Canal Sees Slow Revenue Growth As Sea Trade Lags
10 March 2010

PANAMA CITY (Dow Jones)--After weathering the financial and economic crisis that crippled global trade, the Panama Canal expects to see a modest rise in revenue this year as the recovery takes time to filter through to the shipping industry.

"This year will be flat, it will be very similar in terms of volume," Alberto Aleman, the chief executive of the Panama Canal Authority said in an interview. "We are seeing the same tonnage."

The Canal's revenues fell to $1.96 billion in the fiscal year 2009--which ran from October 2008 to September 2009--down from $2.01 billion in 2008. The forecast for this year is $2.02 billion, Aleman said.

The canal's net profit will probably fall to around $960 million from $1.01 billion in 2009 and $1.03 billion in 2008.

Despite the world economy's recovery, the canal's business will take time to pick up, Aleman said. The shipping industry always lags the rest of the economy as orders take several weeks to reach ports, and it takes companies time to get enough confidence to increase inventories, Aleman said.

The canal's fiscal year also includes the fourth quarter of 2009, when a recovery wasn't obvious in countries trading through the canal.

Although the global crisis caused a sharp drop in overall trade, the Panama Canal suffered only modestly. About the same number of ships moved through the waterway in 2009 as in 2008, but tonnage fell 3%.

Transportation of bulk loads has already improved, while shipping of containers and vehicles is still low, Aleman said.

Canal revenue last year was affected by rebates the canal gave to its customers, included considering as empty container ships that were less than 30% full.

The rebate is scheduled to end in May, when a new fee structure is expected to be announced following discussions between the Canal Authority and industry players.

About 5% of all the world's seaborne goods pass through the Panama Canal, which joins the Atlantic and Pacific oceans.

The canal is expanding its capacity to allow more and wider ships to cross the Central American isthmus. The project includes the construction of two new sets of locks and two new short stretches of canal parallel to the existing one.

The expansion was initially estimated to cost $5.25 billion, but it's now likely to be about $380 million less than that because of competitive bids by private contractors, Aleman said.

Just over $1 billion of the investment is earmarked for unforeseen events, so it's likely at least a portion of this figure won't be spent.

The official said the expansion will be ready in 2014, as scheduled.

The Canal Authority has secured $2.3 billion in loans for the expansion from the European Investment Bank, the Japan Bank for International Cooperation, the Inter-American Development Bank, the Andean Development Corp. and the World Bank's International Finance Corp.

The rest of the money will come from the canal's own cash flow. In 2012, the most active year, the Canal Authority will transfer around $1 billion to the expansion contractors.

The largest of them is the group formed by Spanish construction firm Sacyr Vallehermoso (SYV.MC), Italian firm Impregilo (IPG.MI), Belgium's Jan de Nul Group NV and Panama's Constructura Urbana SA. The group has started construction of the new sets of locks, which will cost $3.12 billion.

http://img89.imageshack.us/img89/7826/20080526lgevm9.jpg

"The ACP categorically denies the statements by Ponzellini," the Panama Canal Authority, or ACP, said in a statement referring to both the choosing of a winner and a date for making the announcement.
Technical evaluations of three consortia's proposals to build locks and water-saving basins have not concluded, the ACP said. Bids for the project are locked in a Panama bank vault and will be opened in public when evaluations finish.

Upgrading ports might expand trade market
18 March 2010
Tampa Tribune

TALLAHASSEE - Expansion of the Panama Canal means that Florida is poised to seize on new trade opportunities, say state lawmakers who want to pour $85 million into Florida's 14 ports.

Rep. Lake Ray, a Jacksonville Republican, is working with Sen. Jeremy Ring, D-Margate, on an initiative to upgrade infrastructure and expedite improvements at the state's 14 ports, including the Port of Tampa.

"Our ports, while they're doing a great job, have an opportunity to catch an expanded market," Ray said.

One such opportunity, he said, is the expansion of the Panama Canal.

The Panama Canal Authority is modernizing and expanding the canal, including construction of a third lock to accommodate newer, larger ships. That project is expected to boost shipping through the isthmus substantially, providing new opportunities for U.S. port cities.

Other states are already beefing up their seaports, said Ray, warning that Florida will lose trade and jobs if it does not do the same. Already, more than half of the goods that arrive from outside of Florida for purchase here have travelled through some other state's port.

Ray proposes to pay for his initiative by selling tax credits to insurance companies, which have to pay annual premium taxes.

The Florida Seaport Transportation and Economic Development Council would decide how to divvy up the money among the ports. All told, the program is expected to raise about $85 million by July 2012, at a cost to the state of $100 million in tax credits.

That's a substantial drop from the $500 million cap that Ray proposed initially. The lawmakers changed his bill, he said, in response to House leaders' concerns about the financial impact and how it would balance against other economic stimulus proposals.

Ray said ports wouldn't have been able to make instant use of a much larger amount than the $85 million, because of regulatory hurdles.

To that end, Ray said, Ring's Senate plan to streamline permitting for port projects fits naturally with his proposal, which a House committee approved Wednesday. Both lawmakers intend to file companion legislation for one another's bills.

The package received a boost from Gov. Charlie Crist, who appeared with the sponsors to promote it. "We must capitalize on this economic opportunity in Florida," he said.

Panama Canal Picks Dredging International For $40 Mln Contract
9 June 2010
Dow Jones

The Panama Canal authority picked Belgian company Dredging International NV to dredge the Gatun Lake as the company offered to carry out the work for $40 million, the authority said Tuesday in a statement.

Dredging International beat out other companies including China Harbour Engineering Company, Netherlands-based Royal Boskalis Westminster (BOKA.AE), U.S.-based Great Lakes Dredge & Dock Corp. (GLDD) and Belgium's Van Oord Groep NV and Jan de Nul.

The losing bidders had offered between $58 million and $98 million to dredge the lake located between the canal's Pacific and Atlantic locks.

The Panama Canal Authority is in the process of doubling the canal's capacity. The project is expected to cost a total $5.25 billion and be ready in 2014.

Panama Canal hikes transit fees 8-10 pct for 2011

PANAMA CITY, June 16 (Reuters) - The Panama Canal Authority will raise transit tariffs for the waterway that connects the Atlantic and Pacific Oceans between 8 and 10 percent in 2011, the agency said on Wednesday.

Most types of shipping will pay a higher tariff starting Jan. 1 although the increase for refrigerated vessels will be postponed until April, the canal authority said in a statement.

Rates were frozen in 2010 due to the global financial crisis.

Panama is investing $5.25 billion to expand the canal to allow larger ships to pass through the transoceanic waterway.

The expansion of the canal, which currently handles about 4 percent of global trade, is set for completion in 2015.

July 6, 2010
Panama Canal
JUST STARTED, CONSTRUCTION SITES
Already shut down

Twelve hundred workers are on strike against Impregilo (italian build company) attempt to apply the "Law 30". Not the case in Italy, but in Panama, where the Italian company is a partner of the consortium won the main contract, from $ 3.2 billion for the expansion of historic canal linking the Atlantic and Pacific. 30 And the law referred to is obviously not Italian, commonly known as the Biagi law ", but a special law passed in special session last June by the Panamanian parliament. The union, which denounced the government's attempt to restrict trade union rights, has named Ley chorizo. Namely "the law-spicy sausage" why try to cover measures indigestible, such as a guarantee of police violence, mixing with others that would give a "taste" the best in text, such as protection of domestic airlines from foreign competition. Against the law 30, the local unions are protesting for several weeks. According to the Government of Panama, the agitation is only to defend the trade union contribution taken directly from wages, that the law abolishes. In recent days, the level of confrontation has been raised, after the inauguration of the enlargement of the canal, which was attended by 30 June Prime Minister Silvio Berlusconi, along with several Heads of State and Government of Latin America. "For the first time - said the president of Panama, Ricardo Martinelli - get a High Representative of Italy and he does participate in a work of global significance." Berlusconi was the guest of honor at the inauguration of dredging on Lake Gatun, where the canal passes. This work is entrusted to the consortium for the U.S. channel, which includes Impregilo (48%), Spain's Sacyr Vallehermoso (49%), the Belgian company Jan de Nul (1%) and the Panamanian Constructora Urbana (1%). "We are here - Berlusconi said - to welcome this great work and share the hope that is realized in time."

The hope has not achieved the desired effect. From Friday, just days after the visit of Italian Prime Minister, began the strikes. In recent days they crossed their arms about 1,500 workers in the city of Colon, who report wage starvation conditions (3.3 dollars an hour) and protesting against the will of the Consortium which is part Impregilo to apply the Law of 30 newborn. According Saúl Méndez, union Suntracs, contractors' want to force the workers to abandon the union and are no longer serving in salary the union dues. " According to the unions two protesters were arrested and then released during the protest. Ready replication of Labour Minister of Panama, Mrs. Alma Cortes, who said she was outraged accusations of union and appealed to workers on strike: "I recommend them to be careful to protect their jobs and not to follow the Game managers who earn their living union dues. " For the minister, in short, the protest was intended merely to provide privileges and not to help workers.

The construction of the third way of the Panama Canal, which is expected to be completed in 2014, is one of the largest infrastructure projects running worldwide. The idea to expand the channel is a consequence of increasingly stringent gigantic ships of last generation, in particular container. Until a few years ago had a greater ability to 5-6000 teu (unit of measure equivalent to a container 20 feet long), which could travel from Panama. But this measure over the past decade has grown progressively and now also moving ships from 13 or 14 thousand TEUs. Ships over 5,500 teu capacity are classified as "post-Panamax," just because they can not cross the channel. This limitation has had a significant impact on international shipping routes, which meanwhile have begun to absorb the booming Chinese production. From Asia have so many ships began heading towards the Suez Canal, larger than that of Panama, even to reach the east coast of the United States. In recent years there have been so favored transshipment ports in the Mediterranean, who have had rapid growth first on the north-west, from Gioia Tauro, Algeciras, and later on the south, where they grew Damietta and Tanger Med L ' Opening of the Panama Canal in 2014 will allow the passage of container ships of over 12,000 TEUs and will cause a new revolution in transport strategies of the major shipping companies.

source: http://shippingonline.ilsecoloxix.it/p/porti_e_logistica/2010/07/06/AM6ZReqD-partiti_cantieri_panama.shtml

Panama Canal Receives Bids on Pacific Access Channel
6 August 2010
Journal of Commerce Online

The Panama Canal Authority said it received three bids on Aug. 6 from international engineering and construction companies that are competing to dredge and excavate the Pacific Access Channel entrance.

This project represents the last major contract to be awarded in the canal's expansion program. Once completed, the project will allow larger ships to enter the new access channel and reach the new Pacific Locks. The access channel will link the new Pacific locks with the Gaillard Cut, which is the narrowest stretch of the Panama Canal.

The canal authority said it would award the contract to the firm with the lowest-priced bid that meets all of the terms and conditions stated by the tender in its request for proposals.

The contractor will then have a 90-day procurement and mobilization period before receiving the notice to proceed.

The companies that submitted bids and the corresponding bid prices were:

Jan de Nul, $54,550,647; International Underground Corp., $55,329,492; and BKI-MECO, $71,344,784.

The scope of work for the contract will include an estimated 4 million cubic meters of dredging and excavation of the PAC entrance.

The canal authority said it would ensure all of the work meets specific environmental requirements.

The expansion program will build a new lane of traffic along the Panama Canal through the construction of a new set of locks, which will double capacity and allow more traffic and longer, wider ships when completed in late 2014.

From September 2005 to September 2006, freight shipped through the waterway totaled 296.3 million tons compared to the previous fiscal year, and the number of ships crossing grew by 1 percent, to 14,194.

Of those, 1,610 were the larger Panamax ships, whose number grew 22.9 percent from the previous year.

Ten accidents occurred in fiscal year 2006, compared to 12 in the prior one, the Canal Authority reported.

Panamanians will vote in an Oct. 22 referendum on a project to add a third set of locks to the canal to allow larger container ships to pass through the waterway and reduce the long lines of ships waiting to cross.

The Canal Authority has estimated the project will cost roughly US$5.25 billion (€4.2 billion).

Panama has controlled the canal since Dec. 31, 1999, when the U.S. military presence in Panama ended. Approximately 4 percent to 5 percent of the world's maritime trade crosses through the Panama Canal.

Panama Canal reopens after closure from heavy rain

PANAMA CITY, Dec 9 (Reuters) - The Panama Canal, a major shipping waterway that connects the Atlantic and Pacific oceans, reopened early on Thursday after a rare shutdown due to heavy rains, the canal authority said.

"The Canal is operating now," canal authority administrator Alberto Aleman said in a statement, after the roughly 10-hour shutdown.

The canal was last closed during the 1989 U.S. invasion.

Between 13,000 and 14,000 ships pass through the canal every year -- about 36 per day -- representing roughly 5 percent of world trade, according to the canal authority.

Recent rains have caused havoc in nearby Venezuela and Colombia and the authority said rainfall had pushed surrounding rivers and reservoirs to historically high levels, which could affect ships in transit.

The waterway is undergoing an expansion project to accommodate larger ships that will cost more than $5 billion dollars.

In 2011 increased traffic in Panama Canal


The Panama Canal Authority expects for 2011 an increase of traffic, pending completion of the expansion project, the South American country has yet to complete by 2014. Currently, the canal can accommodate vessels up to 5,000 TEUs, but once finished, will secure the passage of units up to 12,600 teu.

The Authority estimates that the total transit of goods in the Channel for the fiscal year 2011 will be 305 million tonnes, an increase of four tonnes of the handling of last year. The Panama Canal moves approximately 4.4 million TEUs per year. In 2015, the figure should rise to eight million.


source: shippingonline.it

East Coast ports race to dig deeper for giant ships coming through expanded Panama Canal
8 February 2011

SAVANNAH, Ga. (AP) - When Savannah welcomed the largest cargo ship ever to call on its booming seaport, the visiting vessel barely fit. The Figaro had to sail in loaded at half capacity to avoid scraping the river bottom, and even then could only navigate the shallow channel at high tide.

East Coast ports from New York to Miami simply aren't deep enough to handle such mammoth vessels as the CMA CGM Figaro, which measures 1,100 feet long with space for 8,500 cargo containers a tractor-trailer can haul one at a time. With a major expansion of the Panama Canal projected to be finished by the end of 2014, these gargantuan vessels will be able to sail between Asia and the U.S. East Coast.

The canal expansion is pitting seaports up and down the Atlantic coast in a race to dig deeper harbors capable of handling the so-called post-Panamax ships.

"It's going to almost triple the size of the vessels that are going to be able to transit the canal," said Kurt J. Nagle, president of the American Association of Port Authorities. "I don't think it's overhyped to say it's a gamechanger."

The post-Panamax ships require depths of up to 50 feet of water to navigate when fully loaded. Only one East Coast seaport -- Norfolk, Va. -- is that deep. Other ports are scrambling for federal permits and hundreds of millions of taxpayer dollars to scrape and suck tons of sand and mud from their bays and river bottoms.

The port of New York/New Jersey, the busiest port on the eastern seaboard, already has a $2.3 billion project under way to deepen its harbor to 50 feet. But the Bayonne Bridge spanning the shipping channel is too low for the biggest ships, and port officials say at least $1.3 billion more is needed to raise the span.

Savannah, the nation's fourth busiest container port and No. 2 on the East Coast, wants $588 million to dredge 6 feet from the Savannah River along 35 miles between the ocean and the city's port. The federal government would pay about two-thirds of the bill, but first the Army Corps of Engineers needs approval to start the project, which is expected within the year.

"This is a project that has significance not just for this area of the state or the state itself, but for the entire Southeast," Georgia Gov. Nathan Deal said during a Jan. 28 visit to the Savannah port.

Dock workers at the Savannah port, 240 miles from Georgia's state Capitol, are doing their part to help push for deeper water. When the Army Corps held a recent workshop here to gather public comment on the project, the local chapter of the International Longshoremen's Association had 600 port workers show up to voice their support.

Christopher Johnson, a second-generation longshoreman and one of the union's 1,700 Savannah workers, said larger ships carrying more cargo should translate to more workers needed to unload them. But Savannah could lose jobs, he says, if it doesn't dredge and its competitors do in nearby Charleston, S.C., and Jacksonville, Fla.

"If we don't get the project done, we're afraid the ships may go to other areas," said Johnson, 46. "Our workload depends on the ships coming up the river. If the ships don't come, we don't eat."

Meanwhile, South Carolina officials are seeking $400,000 in federal money for a feasibility study by the Army Corps to determine if it can deepen the Charleston port from 45 to 50 feet. Charleston is the East Coast's fourth busiest container port, and No. 12 nationally.

Miami's port already has permission to dredge and is asking for $75 million to start the project's first phase. Studies are under way to deepen two other Florida ports in Ft. Lauderdale and Jacksonville.

"Certainly every port is counting on it having a big impact," said Bernard Groseclose, former chief executive of South Carolina's seaports who now works as a private consultant. "Everyone is telling the same story: We're getting ready for the Panama Canal expansion."

But getting funding may have just gotten tougher.

Federal dollars used for dredging projects and the studies required to approve them typically get added to congressional budget bills as "earmarks" -- line items requested by individual lawmakers to benefit their districts back home. Yet earmark spending was widely denounced as government waste in the 2010 elections that swept Republicans back in control of the U.S. House.

As a result, GOP lawmakers in both the House and Senate have sworn off earmarks for the time being. It's not clear how else port projects would obtain federal money.

"It has the potential to have a dramatic impact," said Nagle, who insists port projects aren't waste. "There clearly is a distinction between these types of projects and what is typically the target of the ban."

Both Nagle and Groseclose agree not all ports seeking to supersize their harbors will get approved -- and both don't think every U.S. port needs to be deep enough for the largest ships.

But some are questioning how the federal government decides which projects move forward.

In studies finished last November that recommend deepening Savannah's harbor, the Army Corps of Engineers concludes the project would have economic benefits for the nation as a whole -- the benchmark for the agency's approval.

But what the Army Corps hasn't done is take a comprehensive look at all East Coast ports to determine how many should be dredged to post-Panamax depths and which would reap the most benefits for the best price.

"The Corps is evaluating the cost and benefits of these individual proposals in a vacuum," said Chris DeScherer, an attorney for the Southern Environmental Law Center. "Where does it make the most sense on the East Coast to have a deep water port? Where does the American taxpayer get the most bang for his buck with the least environmental impact?"

The Army Corps said it hasn't done a broader study to compare ports, in part, because no one has asked.

The Corps doesn't have the authority to initiate port studies on its own.

"To date, there has been no request by the ports or Congress to undertake a comprehensive study," said Jim Walker, chief of the Navigation Program for the Army Corps of Engineers.

Panama Canal gets a revamp – and so does global trade
26 March 2011
The Globe and Mail

It has been almost 100 years since the completion of the Panama Canal, a project that took more than a decade and created one of the world's most important trade routes.

It was hailed as one of the greatest engineering works of all time. But it came at a hefty price: More than 22,000 workers died while chiselling the $336-million course through the yellow fever- and malaria-infested jungles of Panama.

The canal they created revolutionized global trade, shrinking a 22,500-kilometre voyage from New York to San Francisco to 9,600 kilometres.

Now, work is under way on an ambitious development that will add an extra lane and two sets of locks, a $5.25-billion expansion that will triple cargo capacity through the storied waterway, but also redraw global trade routes once more by deepening Asia's access to markets along the Atlantic ocean.

China, the world's fastest-growing major economy, will be able to use larger and more efficient cargo vessels to transport goods to consumers on America's east coast. It will also be more efficient for China to obtain raw materials from Latin America's northeast, such as Brazil's iron ore and Venezuela's oil – key ingredients in its drive to industrialize – and will afford Chinese exporters greater access to a rising middle class in Brazil.

China's imports surged nearly 40 per cent last year, making it the world's second-largest importer and a key engine of the global economy. But that growth is occurring at a time when soaring energy prices make it crucial for all trading nations to reduce transportation costs.

“China recognizes that if their trade is going to continue to grow with the Atlantic – the east coasts of North America and South America – … they've got to find better ways to get into the Atlantic,” said David Hummels, a professor of economics who specializes in global trade at Purdue University in Indiana. Freeing up east-west global trade routes will be a priority in the coming years, he said.

Another winner in the Panama expansion will be Chile, which will be able to more easily move goods such as copper and wine to the eastern U.S., said Mary Brooks, the William A. Black chair of commerce at Dalhousie University who specializes in trade and transport.

Canada is rarely mentioned in the debate over who wins and who loses in the canal's expansion. But Gary LeRoux, executive director of the Association of Canada Port Authorities, says Halifax could see more activity because its deep-water harbour can accommodate larger ships.

Currently, the U.S. is by far the biggest user of the Panama Canal, but China's share is growing rapidly – so much so that the country is investigating other east-west routes.

Last month, Colombian President Juan Manuel Santos said his country is in advanced talks with China to develop a “dry” Panama Canal. One proposal is a $7.6-billion project to build a 791-kilometre railway through Colombia and expand a port that would give China a gateway into Latin America.

Construction of Panama's expansion, which will enable vessels twice the size to navigate the passage, will likely finish in 2014. The new canal will allow the world's largest ships – called post-Panamax vessels, which are up to 366 metres long and 49 metres wide – to use the passage.

The new Panama project has had its setbacks, though far less dramatic than those of a century ago.

Landslides and mud have proved challenging. In December, heavy rains caused the waterway's first temporary closing in more than two decades, although the authority says construction remains on schedule.

An expanded canal will have ripple effects for global trade, boosting activity for east coast U.S. ports and reducing it in the west, where unloaded cargo has to continue by rail to the east. Increased trade between Asian markets and east coast ports could dislocate as much as 25 per cent of traffic from west coast ports, Fitch Ratings estimated in a report last month: “Significant traffic leakage is to be expected.”

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MORE CARGO

Larger locks will allow bigger ships to use the canal.

CURRENT PANAMAX SHIP

Capacity: 4,800 TEUs

FUTURE POST-PANAMAX SHIP

Capacity: 12,000 TEUs

TEU = Twenty-foot Equivalent Unit (6 m),a standard shipping-container size

The Panama Canal allows Asia to connect with Europe and the east coast of the Americas with relative ease.

It needs to accommodate larger ships in order to compete with the alternative Suez Canal route.

PANAMA CANAL USAGE

Note: Canada's total usage in 2010 was 9.5 million long tons.

Steel from Petersburg part of Panama Canal upgrades
17 May 2011

PETERSBURG, Va. (AP) - A Petersburg steel mill is playing a role in major upgrades to the Panama Canal.

Steel sheet piling produced by Gerdau Ameristeel's mills in Petersburg and Midlothian, Texas, is being used in the expansion of the one of the world's most vital shipping paths. The $5.25 billion project will double the capacity of the canal, allowing more ships and larger ships to traverse it.

"It is one of those projects that doesn't come along too often, to be able to participate in the expansion of such a notable feature on the globe," said David Maedgen, manager of piling sales at Gerdau Ameristeel. "There is so much international traffic that goes through that canal."

The Richmond-Times Dispatch reports that the Petersburg mill produced 1,200 tons of sheet piling the company manufactured for the Panama Canal expansion.

Steel sheet piling is a manufactured construction product with connections that interlock to form a continuous wall.

The materials will be used for the excavation of the canal's Pacific access channel and the construction of the Borinquen Dam, a key part of the expansion.

The process of moving the steel from the Virginia and Texas facilities to the site in Panama involved 161 rail cars, four oceangoing vessels and 880 truckloads.

The Petersburg mill has 415 employees and the capacity to produce 1 million tons of steel per year.

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Information from: Richmond Times-Dispatch, http://www.timesdispatch.com

FACTBOX-Panama Canal expansion effect on shipping

May 31 (Reuters) - The Panama Canal Authority expects to complete the canal expansion project by the end of 2014.

This will widen and deep the canal to accommodate larger vessels taking cargoes to the Pacific.

The expanded canal will mainly be used for container traffic and had been expected to open the door for increased Colombian and U.S. coal exports to the Pacific.

However, the expanded canal will not accommodate the capesize 150,000 tonne vessels, most often used for long-haul coal trade.

These will continue to go south around the tip of Latin America and on to the Pacific, while freight rates remain cheap.

DIMENSIONS

* The expanded canal will accommodate ships of up to 170,000 tonnes deadweight (dwt) beam, up to 49 metres length.

* The transit draft will increase from 12 to 15 metres.

* Modern capesize vessels of 170,000 dwt are generally 45 metres beam but when fully laden, the draft increases to 18 metres.

* This means that the expanded canal can only take partly laden capesize vessels, losing around 35,000 tonnes of cargo or offload and reload at each end of the canal. The cost of doing this makes the economics doubtful of using capes.

* New post panamaxes such as the Tana Sea, which has just been delivered, would be ideal ships to transit the expanded canal because they can load a full cargo.

The Tana sea is 92,500 dwt, has a 14.9 metres draft, 230 metres in length and beam 38 metres.

* Few panamax bulk carriers currently use the canal and even fewer carrying coal because the standard panamax size for coal cargoes is 75,000 tonnes, too large for the canal at present.

* Aframaxes will also be able to transit fully laden, a modern one being typically 115,000-dwt.

* The main shipping beneficiaries could be large boxships such as the MSC Luciana, which could transit with a full cargo.

* Larger container ships would also be able to transit either in ballast or with lighter volume-based rather than bulk.

* The expanded canal is not expected to have much effect on voyage rates when time charter rates are depressed but it could affect rates in a stronger market and decrease the volatility of rates on West to East voyages.