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  HOME | Central America

Panama Canal Faces Continuing Challenges Heading into Future

PANAMA CITY – On Dec. 31, 1999, Panama took control of the canal built by the United States and run by that country since its inauguration in 1914, and its big challenge, overcome in the new period begun 20 years ago, was the expansion of the route through which 6 percent of the world’s trade passes, but now the water needed for its operation poses a new challenge.

“No sooner had we Panamanians received it that we realized that the future of the canal depended on the largest ships being able to sail through it,” former President Aristides Royo, who now serves as canal affairs minister, told EFE.

“Seven years after the canal was handed over to us the enlargement works were begun. That, I would say, saved the canal” and helped make it “a good business,” said Royo, who served as president from 1978 to 1982.

In April 2006, the board of directors of the Panama Canal Authority (ACP) presented to Panama’s then-President Martin Torrijos, who was in office from 2004 to 2009, the proposal for the first and up to now the only expansion of the interoceanic waterway.

Two months later, in June 2006, the government approved it, and in October of that year it was ratified by popular vote.

Getting the canal’s enlargement started was not easy, Efe was told by Jorge Quijano, ACP administrator from 2012 until last September, when he passed the position on to Ricaurte Vasquez, former economy and finance minister and who had been the deputy administrator of the canal at the start of the 2000s.

“We were not like the United States, which could start a construction project for $5 billion or $6 billion without thinking twice. We had to go launder money abroad, with the only guarantee being the good work we had done” since the year 2000, said Quijano, an engineer with 40 years of ACP experience.

The expansion was “very complex – not even the Americans attempted it during their time. They started to try it in 1939 but had to stop because of World War II. They continued studies for a larger canal between 1966 and 1969, but aborted it in the midst of negotiating treaties,” Quijano recalled.

The negotiations that led to what are known as the Torrijos-Carter Treaties began to take shape after Panama rejected an accord reached in 1967 on three suggested pacts (The Panama Canal Treaty, The Treaty for the Defense of the Panama Canal and its Neutrality, and The Sea-Level Canal Treaty).

The Torrijos-Carter Treaties were signed in Washington on Sept. 7, 1977, and took effect on Oct. 1, 1979.

In September 2007 the expansion works began, whose main project, the new locks of Cocoli on the Pacific side and Agua Clara on the Atlantic, built by the GUPC consortium led by Spain’s Sacyr construction company and including Italy’s Impregilo, the Belgian Jan de Nul and the Panamanian CUSA company.

This new third lane, which allows that passing of New Panamax ships with triple the cargo capacity of the Panamax vessels that travel the original centenary route, was inaugurated on June 26, 2016, two years later than planned and amid economic demands by GUPC that are still being resolved in international courts.

“In the first year of the Panamanian administration, in the year 2000, we invested $167 million. During the fiscal year that closed on Sept. 30 we invested $1.78 billion, almost 11 times more,” Quijano said.

“Climate change in the Panama Canal is very much in evidence” and affects the availability of water, the administrator Vasquez said last October, upon announcing that the option of desalination is being studied because it would mean “long-term sustainability and control” of the resource, indispensable for keeping the canal functioning.

The Panama Canal is fed by the Gatun and Alajuela artificial lakes, but their water also supplies the Panama City metropolitan area with its population of close to 1.5 million.

“We’ve been using water from Lake Gatun for 106 years and water from Lake Alajuela for another 84 years, and we’re straining them to the maximum,” Quijano told Efe.

Royo, for his part, said it was necessary this year “to reduce the tonnage” carried by ships on “three occasions,” because the canal was below the sufficient water level due to the lack of rain, which was some 27 percent below the historic average, according to ACP data.

 

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