The long-delayed expansion of Panama's century-old canal is now projected to be completed by May of this year, President Juan Carlos Varela announced this past weekend. The major expansion project has long been behind schedule. Work began in 2007 and was expected to be finished by 2014, the centennial year of the original canal, notes the International Business Times.
The reconstruction of the canal has been plagued by legal disputes involving the Panama Canal Authority (PCA) and the Spanish company contracted to do the work, Grupo Unidos por el Canal de Panama, over budget overruns. A recent hearing of the Dispute Adjudication Board directed the PCA to pay Grupo Unidos $17 million for additional labor expenditures as well as for a recent construction workers' strike.
With this and other overruns, the expansion project has well exceeded its original projected cost of $5.3 billion, according to GlobalPost.
Referring to the dilemmas, Agence France-Presse reports that President Varela declared, "With respect, I am calling on the contractors for the expansion project to hold dialogue with the Panama Canal Authority, to allow work to be completed, to leave legal disputes in the hands of the competent authorities and to avoid mediatized differences that in no way help the image of the contractors, the Canal Authority and the Republic of Panama."
The expansion of the canal includes creating a third set of locks, a new access route via the Pacific Ocean and deeper waterways which will ultimately permit larger ships carrying more than twice the cargo to pass through the 50-mile channel, The Globe and Mail explains.
The canal's expansion could have an impact on shifting trade routes, with the flow of goods transferring from U.S. West Coast ports to the East Coast, reports The Globe and Mail. Although the East Coast ports are still struggling to adjust to larger ships, needing to deepen and widen their marine depots, one benefit of the construction delays is that they have allowed for U.S. East Coast ports and businesses to prepare for the canal's "historic transformation," according to the Miami Herald.
