IL Postcard

Panama Canal Expansion: Ready, Set, and…The Project of the Century Has Begun

Date: 07/09/2007

Panama is making history again-the nation's most exciting (and controversial) project has finally begun, according to Dani Kuzniecky, President of the Panama Canal Authority (ACP) Board of Directors.
Over eight months have passed since the people of Panama approved the Panama Canal expansion mega-project via referendum. The immense undertaking is easily the nation's biggest project since the Canal was completed in 1914. Among other things, the modernization will open the waterway to a host of new vessels-dubbed "Post-Panamax" size because they are too large to fit through the Canal.

Over the weekend, local media reported that a Panama-based company called Constructora Urbana, S.A. (CUSA) had offered the lowest bid-$41 million-to complete the first phase of dry excavation required for the project. Kuzniecky says that the bid not only marks the official beginning of the expansion, but also demonstrates "the complete transparency that was guaranteed to Panamanians."

CUSA was one of 10 groups to submit proposals to the ACP, but just because it has submitted the lowest bid doesn't mean that it's time to crack open the champagne. The Canal Authority must still examine CUSA's proposal and ensure that it complies with all the requirements listed in the public offer.

According to Panama's La Prensa, the ACP may rule in as little as 10 days. The ACP has announced that the Canal expansion will be completed in 2014-just in time to celebrate the Panama Canal's 100th Anniversary-so the clock's a ticking. If CUSA's proposal is found to be compliant and officially accepted, the company will then have 10 business days to post a fianza or bond equivalent to 30% of the value of the proposal-that's about $12.3 million to be held by the government as a sort of guarantee for the work.

CUSA's work for this first phase would include excavation of nearly 9.7 million cubic yards of material, as well as construction of a two-mile road and clean-up of 36,000 acres of land sprinkled with UXOs or undetonated explosives (still a sore-if tacit-subject between Panama and the U.S., as local sentiment is that the U.S. is responsible for the contamination and ought to play a larger role in clean-up).

Even though the project is controversial, it is generating a lot of excitement among Panamanians (and rightly so). ACP officials say the first phase will generate 230 jobs and the overall project will create at least 7,000 jobs…and 95% of the labor force will be Panamanian.

Foreseeing a lack of trained workers, Panama's Institute of Professional Training (INADEH) began training programs this year, with a group of 35,000 Panamanians spread throughout different learning centers across the country. The Institute says some 200,000 Panamanians will be trained in construction-related areas-including electrical work, soldering and carpentry-by the end of 2007.

Best Regards,

Jessica Ramesch
Editor, Panama Insider
International Living

P.S. For a full report on the Panama Canal expansion project-including what the expansion entails and what local and international media are saying (the good and the bad)-tune into this month's issue of Panama Insider. Not a subscriber? If you're serious about Panama, you owe yourself a look. Here's all the information you'll need.