More than 20 years after planning started, the enlarged Panama Canal has finally been opened to international shipping, two years behind schedule. A detailed feature published in the New York Times on June 22, 2016, suggests that the difficulties encountered in performing the monumental works contract could leave a legacy of heavy maintenance and repair costs.
The Malta-flagged ship Baroque enters the lowest of the three Agua Clara locks on the Atlantic side of the Panama Canal during a first test run on June 9, 2016 (image removed April 19, 2021)
IWI has already mentioned the difficulties faced by the Spanish-led consortium, which bid for the works at a rock-bottom price of $3.1 billion in 2009. Works were interrupted in 2013 after the consortium appealed for an increase in the total contract value. The appeal was rejected.
The new canal needs enough water, durable concrete and locks big enough to safely accommodate the largest ships. According to NYT assistant business editor Walt Bogdanich, the canal has already failed to meet expectations on all three accounts. His research is based on interviews with contractors, canal workers, maritime experts and diplomats, as well as a review of public and internal records.
The low winning bid, a billion dollars less than the nearest competitor’s, made ‘a technically complex mega-project’ precarious from the outset, according to a confidential analysis commissioned by the consortium’s insurer. ‘There is little room in the budget for execution errors or significant inefficiencies’, the analysts wrote in 2010, adding, ‘This is a high-risk situation.’
Among the biggest risks is the concrete that lines the walls of the six mammoth locks. In summer 2015 water began gushing through concrete that was supposed to last 100 years but could not make it to the first ship. The Hill analysts had warned that the consortium’s budget for concrete was 71% smaller than that of the next lowest bidder. The budget also allotted roughly 25% less for steel to reinforce that concrete.
On lock design, tugboat captains say they cannot safely escort the larger ships because the locks are too small with too little margin for error, especially in windy conditions and tricky currents. In fact, in a feasibility study obtained by The Times, the Panama Canal Authority had earlier concluded that the tugs needed significantly more room.
The Panama Canal Authority will be represented at the upcoming World Canals Conference in Inverness, Scotland (September 19-22), and hopefully the concerns expressed in this feature article will be addressed, and maybe some reassurances given.
IWI was consulted by the USA consultancy consortium back in 1995 to assist them in setting up meetings with French waterways (VNF), to visit the now redundant water slopes at Montech and Fonserannes. The technology was – unsurprisingly – ruled out.