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Panama Canal Lane Opening Delayed

Panama
File photo

Published Dec 21, 2015 9:25 PM by The Maritime Executive

The opening of the Panama Canal's new expanded lock system has been postponed, consistent with expectations that recently discovered cracks in the Pacific-side locks would take some time to repair. But the contractors for the project suggest that delays have more to do with timely payments.

The head of the Panama Canal Authority (ACP), Jorge Quijano, said that the inauguration was still on for the second quarter of 2016, with navigation tests beginning in April.

But the contractor consortium GUPC raised allegations on Sunday that the ACP had not fully paid for its services, and that delays in funding were the reason for pushing back the canal completion date.

“The conclusion of the work largely depends on the ACP . . . [it] should prioritize the solution of the administrative and financial issues . . . under the contract," GUPC said in a statement. “As it has been from the beginning of the project, ACP continues to delay any payment awarded under the contract, limiting the progress of the project.”

ACP responded that contractually it has 56 days to pay after receiving written documentation of milestone completion, but has routinely made payments within 30 days.

GUPC has begun the installation of new steel reinforcements for the leaking lock heads. Repairs should be complete by mid-January. Once commissioned, the locks will accommodate a new class of “post-Panamax” ships, and are expected to double the canal's annual carrying capacity to 600 million tons every year.

Ports on the eastern seaboard of North America have been working overtime to build out container terminal capacity for larger vessels, expecting to gain traffic from their competitors on the West Coast when the new canal lane opens.

“We are very close—only four percent remains to complete the project,” Quijano said. “An expansion of the Panama Canal has never been done and we should all feel very good about where we are today.”  

“After a successful year, we look forward to being able to provide the benefits of the new Canal to our customers and the people of Panama.”