Engineering Giants Vie
for $5 Billion Panama
Canal Deal
Teddy Roosevelt called
the construction of the
Panama Canal "by far the
most important action I
took in foreign affairs
during the time I was
president." Yet it was
also one of the most
bruising. His detractors
derided the massive
project as the worst
brand of America's
buccaneering, gun-boat,
diplomacy. The New York
Times labelled it "an
act of sordid conquest."
Yet nearly a century
after it stirred such
controversy, the 50-mile
passage cut through the
isthmus of Panama to
connect the Pacific and
Atlantic oceans – one of
the world's most
ambitious engineering
feats ever undertaken –
is is need of a
makeover.
A clutch of European and
Asian construction and
engineering giants,
including Ferrovial, the
owner of Heathrow
airport, are putting the
finishing touches on
proposals to be
submitted this week to
the Panama Canal
Authority (ACP) to cut a
new third lane running
alongside the two
existing channels that
are now too narrow to
accommodate the world's
largest ships.
Interested bidders must
provide detailed
information proving
their financial and
technical capabilities
by tomorrow to be able
to enter the formal
auction process for the
$5.25bn (£2.54bn)
project. The proposals
are the first stage of
the bidding process.
Because of its sheer
magnitude, companies are
required to partner up
in consortia.
The Spanish construction
giants FCC and ACS have
teamed up to put
together a bid, while
Italy's Impregilo has
joined with Sacyr
Vallehermoso of Spain,
the Dutch giant Jan de
Nul, and the Panamanian
group Cusa to form a
rival group. Ferrovial
is examining the
project, as is the
domestic rival Acciona,
but is still undecided
whether it will enter
the auction.
The project will be paid
back through an increase
in the fees paid by
ships passing through
the channel, which last
year generated a total
of $1.7bn for the ACP.
Today, the canal handles
5 per cent of global
shipping traffic with
more than 14,000 ships
passing through its
locks, but it is rapidly
reaching capacity. Fed
by increasing demand
from the east coast of
the United States for
cheap Asian goods, it
will reach its maximum
traffic load, on current
trends, by 2012, raising
the spectre of a
bottleneck of freighters
queuing up on either
side of the isthmus.
The canal is no longer
able to handle the
newest generation of
super-freighters, which
have become too wide and
heavy to pass through
its locks. Under the
project, a third lane
will be dredged up
alongside the two now in
operation, doubling
capacity. There will be
a new set of locks
fitted on either end to
accommodate today's
larger ships.
Freighters were once
built especially to fit
through the canal.
Called "Panamax" ships,
they were designed to
fit within the
dimensions of the locks
– 33.5 metres wide and
320 metres long. In
recent years, however,
an increasing number of
super-freighters, not
surprisingly labelled
"post-Panamax", have
been built. The new
locks will be 55 metres
wide and have a length
of 427 metres.
"World commerce is
dependent on the canal.
And as we continue to
stay the course on our
expansion plans, we
foresee the new lane of
traffic along the
waterway influencing the
future of shipping,"
Dani Kuzniecky, chairman
of the ACP, told the
Panama state news
agency. "We are fully
committed to this
project and believe that
expansion will fuel
growth in the logistics
and transportation
sectors throughout the
region – and the
benefits will be felt
all over the world."
Companies and port
authorities are already
gearing up for the
increase in traffic that
the expansion will
allow, especially in
Florida, which is where
many ships from Asia
unload their goods.
Yet as demand for
commodities and other
goods being fed by China
and India continues to
grow, even larger ships
are now being built that
are already beyond the
canal's new spruced-up
dimensions.
The expansion is slated
to be completed by 2014,
marking 100 years since
the French crane boat
Alexander La Valley,
tiny by today's
standards, became the
first vessel to sputter
through the newly cut
passageway. |
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