Panama Canal Expansion - Part 1

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Panama Canal Expansion - Part 1

Sep-05, 2017

What is Expansion Program of Panama Canal?

The Panama Canal expansion is the largest project at the Canal since its original building; it is also known as “The Third Set of Locks Project”.  This project will create a new lane of traffic along the Canal through its construction process of a new set of locks, by doubling the waterway’s capacity. This will add a new lane to clear of traffic allowing the bigger number of ships, and increase the width and depth of the lanes and locks allowing larger ships to pass. However the existing locks allow only the passage of vessels that can carry up to 5,000 TEUs.  Whereas, the new larger size of ships called New Panamax are about one and a half times the Post- Panamax size and be able to carry over thrice as much cargo; which means up to .15,000 – 14,000 TEUs.

The project consists of several components such as:

  • New Locks — Third Set of Locks Project

  • Direct Impact on Economies of Scale and International Marine Trade

  • Access to Pacific Channel

  • Widened and deepened existing channels

  • The maximum operating water level of Gatun Lake raised

  • Improvements to water supply

  • Good Navigational Channels (Dredging)


The Panama Canal Expansion project is formally proposed on April 2, 2006, by then Panamanian President Martin Torrijos;  saying that it would transform Panama into a first World country. This proposal was approved by National Referendum with 76.8 majorities on October 22, and the Cabinet and National assembly followed suit. Then the project formally began in 2007.

It was primarily announced that the Canal expansion would be finished by August 2014 to match with the 100th anniversary of the opening of the Panama Canal. However, due to various setbacks, strikes and disputes with the construction group over cost over runs dragged the completion date to several times. Above to then the additional difficulties like seepage from the new locks was also one reason to the due.  The Panama Canal expansion was opened on June 26, 2016. The expansion doubled the Canal’s capacity and has a direct impact on economies of scale and international naval trade.

The program is also expected to create demand for ports to handle big ships with heavy capacity.  Several Unites states Eastern seaboard ports will be ready for this heavy capacity and large ships, other considerations for renovations include dredging, bridge raising and blasting. While the UK port of Southampton can handle post-Panamax Vessels and is expanding the capacity of the port to handle larger ships, the Port of Liverpool was anticipated to be capable by the end of 2015, but it was delayed until mid of 2016; while the others are considering such expansion.

Let us look at some key points which will help you understand more about Panama Canal and it's Expansion program.

The capacity of the expanded Panama Canal

While the existing locks allow the capacity up to 5,000 TEUs of the passage of vessels; thus after the extension program, the shipment capacity with the Post-Panamax Vessels along the Canal is up to 13,000-15,000 TEUs.

What is the main purpose of this Expansion Program?

The main idea behind the Expansion Program is to amplify the current capacity and to let bigger ships. As per the survey, the expansion also allows the demand growth of enhanced customer service and helps to double the new Canal’s capacity. This will also add an impact on economies of scale and international marine trade; and help maintain the Canal’s competitiveness and value the marine route through Panama’s extension.

What is the estimated price of this Expansion Program?

Till now it is estimated to US$5.25 billion.

How was it Financed?

To obtain the estimated finance and to complete this extension program of the waterway, the Panama Canal Authority has signed multiple contracts with a group of bilateral and multilateral credit institutions.

What was the actual date it began?

The actual expansion work was officially begun in September 2007. This extension has helped many people with different roles and created plenty number of job opportunities since its implementation along with the training programs for the professionals in different roles.

How does the program deal with Archaeological findings?

In every project the Archaeological findings add a significant role, thus happened with this extension program also. The Panama Canal Authority took great efforts to protect the cultural heritage, and valuable archaeological items that were found such as; the 16th-century Spanish dagger, bottles dated from last century, and pre-Colombian arrowheads have also been recovered from the excavation sites, all the findings were restored and preserved safely.

The Paleontological Findings

The PC Authority has signed a contract with the paleontological research center — STRI Smithsonian Tropical Research Institute in 2012. As a result of the work; the STRI has found 8,862 items; and all these items were collected and then cataloged. Among them, 5,377 items were made up of rock and sediments and remaining 3,485 items are of fossils.

About the Environmental Impact

The activities under the Panama Canal expansion Program bear by strict environmental values. The Canal also conducts wildlife rescue and relocation actions to protect the environment. By doing such activities the authority has rescued many mammals, birds, and reptiles and relocated to safe areas.

We will come up with the next version on this blog soon with more details on the expansion program. Until then keep reading.