The Panama Canal: Comparing the Engineering & Construction Programming Activities to the Port of

Gulfport Restoration Program

Brian Varnado brian.varnado@tlwallace.com

0 - ABSTRACT

This case study explores the similarities and differences in programming activities of the Panama Canal Expansion and the Port of Gulfport Restoration Program (PGRP). The Panama Canal Expansion has been dubbed the most critical construction project in global transportation and is critical to the economic growth and development of Panama. Panama has become an emerging pillar of economic stability in Central America since acquiring canal operations and control from the United States in January, 2000. Although not as important to global transportation, the Port of Gulfport Restoration Program is equally as important to the State of Mississippi and the Northern Gulf of Mexico. Each program faces its share of programming difficulties as well as accomplishments and milestones as they progress towards a 2015 substantial completion date. The primary focus of this paper is to compare different aspects of program management for each program. Programming activities evaluated include: funding/economic development, master planning, scheduling, design, construction, and sustainability. Research for this case study was obtained through examining peer-reviewed journals, interviewing port officials and program directors, and gathering information by visiting the Panama Canal Expansion Program and the Port of Gulfport Restoration Program. A supplemental case study of this report explores how the Panama Canal, to include the expansion project, has affected the Panamanian government and economy. Finally, this report will explore any implications of economic performance and non-performance associated with each programs funding sources and specific mandates. The summary of this study provides a detailed comparison of each entitys programming approach and implementations thereof. The results of this research could facilitate an understanding of the similarities and differences in programming approaches between two separate geographic regions and cultural barriers.

1 - INTRODUCTION

Programming

Programming, or program management, is a term used in the engineering and construction industry that encompasses the level of effort for a team of professional consultants who manage all aspects of large projects or programs. A program can be further defined as a series of

interrelated projects that achieve a common goal. Different aspects of program management include, but are not limited to: feasibility studies, funding acquisition, concept-level planning, economic development, master planning, budgeting, scheduling, document control, engineering, construction/construction management, commissioning and sustainability. For the purpose of this paper, specific attention was given to each of these six functions: funding/economic development, master planning, design, construction, sustainability and scheduling.

History & Economic Overview of the Port of Gulfport

Since the 2008 recession of the US economy, several programs and private corporations have received federal funding to assist in the economic resurgence and development of the economy. Many opponents of this process refer to it as bailouts. In many cases, the public investment served its purpose and worked well. In other cases, the assistance was never recovered. The specific case study mentioned in this report explores a publically funded program (Port of Gulfport Restoration Program). The intent of the program is to help revitalize the economy and lower the unemployment rate in South Mississippi.

In 2007 Mississippi State Port Authority received $570 million dollars in public assistance funding from the Department of Housing and Urban Development (HUD) to rebuild the port from damages incurred from Hurricane Katrina. The intent of the grant was to secure the long-term operating capacity of the port that would serve as a premise for job creation and economic development for South Mississippi. The grant funding came with a caveat, however. The port must double its 1,200 full-time equivalent jobs to 2,400 jobs within five years after the restoration program is complete.

As mentioned earlier, economic development is a vital component of the programming process. Mississippi Development Authority (MDA) will lead the programming efforts to ensure that the successful delivery of the PGRP meets any and all funding stipulations and mandates.

History & Economic Overview of the Panama Canal

The Panama Canal has been an integral part of International Trade and Commerce since its commissioning in 1914. The United States Army Corps of Engineers stepped in and salvaged a failed French attempt to properly design and construct the canal, which occurred between 1881 and 1889. It took over a decade of overcoming political upheaval and a threatening Columbian revolution, but the US gained control and took over the original canal project in 1904. After opening the canal, President Theodore Roosevelt called its completion, the greatest achievement of his administration. (Hawkins, 2006) The primary objectives of Roosevelts administration were to provide a faster, safer route for cargo traffic from the Atlantic and Pacific Oceans and to promote a stronger, more secure, and more stable Panamanian Government. (Mann, 2007) The new canal consisted of a series of channels, lakes, locks, and dams which enabled vessels to cross the 80km wide Isthmus of Panama. (CE News, 2007) The United States maintained operations of the Canal until December 31, 1999. The new millennium ushered in a paradigm shift and transition in administering canal operations. For the first time ever, the

Panamanian Government had full jurisdiction and control over one of the worlds most important water corridors. Since taking control, the Panamanian Government has facilitated growth in every measurable facet of canal operations. In fact, their leadership was praised by the Organization of American States (OAS) in 2004. The OAS expressed its praise for Panamas efficient administration of the inter-oceanic waterway and for the countrys efforts to modernize it. (OAS, 2004)

In October 2006, seventy-seven percent of Panamas citizens voted to adopt a resolution that would allow the Panamanian Government and the Autoridad del Canal de Panama (ACP), also known as the Panama Canal Authority, to seek funding to design and construct a major expansion to the Panama Canal. (CE News, 2007) The resolution moved swiftly through the bureaucratic process. By April of 2007, the Panama Canal Authority had finalized their plan and presented it to then President Martin Torrijos Espino. He fully supported and endorsed the plan. Subsequently, the National Assembly approved the expansion project on July 17, 2007. This megaproject would become the largest undertaking since the canal was originally constructed. Conceptual estimates for the project topped $5.5 billion US dollars.

The intent of the canal expansion was to serve a three-fold purpose: 1) to create a new water transit lane by constructing two new locks one at each entry; 2) provide widening and deepening at each entrance; 3) widen and deepen the navigation channel at Gatun Lake. These three objectives would facilitate more traffic and accommodations for larger vessels, thus increasing the overall revenue of the canal.

Not only did the Panamanian citizens and government see and hope for the benefits, the rest of the international community did also. The international community saw this as a chance for Panamanian economic growth and for expansion in global trade. US Ambassador Eaton commented: This is important to the US. Its important to our economy The transit costs will be cheaper and that will have an effect on the world market We welcome the expansion. (AP, 2006) Furthermore, former Secretary of State Condoleezza Rice called Panamanian Foreign Minister Lewis Navarro to congratulate and commend the people of Panama on their decision to expand the canal.

Major international relations were also solidified in December 2006 between the US and Panama when the US-Panama Free Trade Act was signed. The Act secured the investments that the US had made in Panama since 1904. The agreement ensured that all US investments would be protected and that US firms would have the opportunity to participate, on a competitive basis, to provide products and services on the expansion project. (USTR, 2006)

Approximately thirty-seven percent of the worlds container fleet is post-Panamax sized vessels. Panamax is a term used to describe a ship that was designed to travel within parameters of the current Panama Canal. Post-Panamax describes vessels that are too large to traverse the current canal. With the size of container ships growing ever so larger, the demand and need to accommodate these ships became more apparent. As Figure 1.1 indicates, Panamax vessels can

carry up to 4,000 TEUs. The more modern vessels, or New Panamax vessels, can carry up to 14,500 TEUs. (Container Transportation)

Figure 1.1 Vessel Sizes

US Perspective on the Panama Canal Expansion

The ten top customers, in terms of countries, of the Panama Canal are as follows: United States, China, Japan, Chile, South Korea, Peru, Canada, Ecuador, Colombia, and Mexico. (ACP, 2007) As a result of the US-Panama Free Trade Agreement and our mass imports, the US is the Canals number one customer. The expansion will further promote US commerce and investment throughout Panama and Central America. In regards to trade, the ability to accommodate larger vessels in a shorter timeframe will further increase the amount of imports to the eastern and southern United States, at lower unit prices. This will ultimately reduce the end-users cost for such commodities. (Mann, 2007) This is a paradigm shift of ironic proportions from what President Roosevelts intentions were when he built the canal. His administration built the canal in hopes that the United States would be the world leader in exports to Asia. He wanted to be the number one customer for different reasons. As is turns out, the United States ended up as the worlds leader in imports; it is still the canals number one customer, though. (Hawkins, 2006) The canal, just as it was in 1914, is still an extremely valuable thoroughfare for US imports and exports. Other motives/strategic aims for the United States to fully support the canal expansion was to ensure the ability to transverse the canal with larger aircraft carriers during military deployment operations.

As the potential for additional imports to arrive on the eastern seaboard and in the Gulf of Mexico region, many United States ports are preparing their ports in expectations of receiving such additional cargo. South and East Coast ports are extremely keen on the expansion. It will allow them to receive and handle larger container throughputs. (Munn, 2007) Ports along the Atlantic and Gulf Coasts have been scrambling to procure funding to upgrade their facilities. An estimated $6 billion US dollars has been allocated to ports from New York to Savannah, GA to

make the necessary preparations. (CE News, 2007) The primary issue at all ports is the depth of their channels. Post Panamax vessels have draft depths up to 15 meters (49 feet). Most US ports must deepen their channels to accommodate the Post-Panamax vessels. Obtaining authorization for channel deepening is a painstaking process that could take years, even decades to achieve. The US Army Corps of Engineers oversee all applications for authorization. Funding for such activities is usually sought at federal, state, local, and even private levels. The secondary issue is the need to upgrade ship-to-shore crane systems and inland storage/transit facilities. Sujit CangaRetna, Senior Fiscal Analyst for the Council of State Governments Southern Office, stated: Obviously, the impetus is that ports are trying to get a piece of the action because they see this incredible expansion in trade and exports. They feel this is one way we can really stimulate growth, not just at the port, but across the southeast region. (Capitol Ideas, 2012) While the Atlantic and Gulf Coast ports are expanding and preparing, West Coast ports arent conceding any business. (Capitol Ideas, 2012) They are also upgrading facilities in efforts to preserve and maintain current contracts and clients. See Figure 1.2 for North and South America port locations and sizes, based upon 2010 TEU throughput. This map provides a visual indication and proximity relationship of major port locations to the Panama isthmus.

Figure 1.2 North & South Americas Coastal Port Locations

Some southern ports are very optimistic about the potential increases in cargo. Ted Houghton, former Texas Transportation Commissioner stated: The Panama Canal expansion will have profound impacts on job opportunities and economic development for Texas, as well as solidify Texas as the trade corridor of this hemisphere for decades to come. (Texas, 2006) As depicted in Figure 1.2, the Port of Houston is the largest US port in the Gulf of Mexico.

In addition to the potential for additional trade, several US firms have already become beneficiaries of the canal expansion project. Under provisions of the 2006 US-Panama Free Trade Agreement, US corporations were ensured the opportunity to compete for design, engineering and construction contracts on the expansion program. Design, engineering and construction management firms have already procured several large contracts to provide services on the canal expansion. New York based Parsons Brinkerhoff, was contracted to write ACPs

Master Plan that recommended the installation of the new corridor and lock system. Aon Corporation, based in Chicago, landed the contract become ACPs insurance broker and risk management advisor. In 2007, URS, a Texas-based engineering firm, lead a consortium group that procured the expansions Environmental Assessment. (Munn, 2007) CH2MHILL, a Denver-based corporation, was awarded a contract to augment the ACP with their Program Management responsibilities.

2- INFORMATION/DATA COLLECTION APPROACH

Research for this paper culminated from a vast array of sources. A series of peer-reviewed journal entries were obtained from the Online USM Library and EBSCOhost databases. Keyword searches for the Panama Canal Expansion, Panama Economy, and Panama Canal Authority were conducted at both sites. Several periodical publications on the same search parameters subjects were obtained by utilizing Google Search Engine. All references found on the reference page came from the below sources:

Table 2.1

Internet Searches Database URL Information/Keyword Search USM Library www.encore.lib.usm.ed "Panama Canal Expansion" USM Library www.encore.lib.usm.ed "Panama Economy" EBSCOhost www.ehis.ebsohost.com "Panama Canal Authority" EBSCOhost www.ehis.ebsohost.com "Panama Canal Expansion" Google www.google.com "Panama Canal Expansion"

Furthermore, interviews were conducted with key personnel from various organizations, to include the Panama Canal Authority and Mississippi State Port Authority. The information collected was used as a premise of organization, structure, and continuity for the compilation of this paper. A key representative from the ACP was interviewed on both the operations and expansion aspects of the Panama Canal. Representatives from the Mississippi State Port Authority were interviewed to establish the methods and programming approaches on the PGRP. Finally, interviews were conducted on CH2MHILL Project Managers at both the Panama Expansion and the Port of Gulfport Restoration Programs.

Table 2.1 Scheduled Interviewees Interviews

Company

Person Panama Canal Authority (ACP) Larry Belkin, PM (ACP Augmenter)

Panama Chamber of Commerce Dr. Albert White, Director of Transportation & Logistics

Mississippi State Port Authority (MSPA)

Jonathan Daniels, Executive Director Van Grundmann, Chief Marketing Director

CH2MHILL Lon Elledge, Program Manager (PGRP)

Figure 2.1 2013 USM Study Abroad Program with Dr. Albert White, Director of

Transportation & Logistics for the Panama Chamber of Commerce

3 - CASE STUDIES

Case Study 1

Impact of the Canal Expansion on the Panamanian Economy

A study conducted in 1972 indicated that there were 15,348 transits through the canal. This produced nearly $100 million in revenue from tolls. The average vessel paid approximately $6,500 in passage fares. The canal payroll alone that year totaled over $120 million and was divided equally between US and Panamanian workers. Payroll alone was more than the revenue. Although transportation companies benefited from the canal, it was not paying dividends for the local economy. This process was the norm for decades and the local economy continued to struggle as a result. Panama wasnt able to overcome the negative economical impacts that the canal burdened the country with.

As noted previously, one of the US primary reasons for constructing the canal and eventually handing it over to the Panamanian Government, was to promote the stability and independence of their country. For decades, the Panamanian people struggled for economic growth and free trade independence. As late as 2001, up to thirty-seven percent of the population lived under the poverty line. Seventeen percent lived on an income of less than $2 US dollars per day. (Gonzalez, 2006) These statistics are a prime indication of a potential social reformation, which by all means promoted regional instability. However, since then, the canal has proved to be an

invaluable source of substantial revenue for the country. When appropriated correctly, these revenue figures can sustain and promote economic growth of the entire country.

Since the handover in 2000, the ACP has shifted its business approach from not-for-profit to a market-oriented business model. Their model is focused on service and reliability. This model has served the local economy well. The future economic outlook for Panama is tremendous. The canal serves as a sustainable resource for revenue, far better than any diminishable commodity. (LuvPanama) According to the ACP, the $5.25 Billion dollar expansion price tag will be picked up directly by the canals customers and will not negatively affect the Panamanian economy. In fact, it will have the adverse affectpositive growth.

The Panama Canal has five strategic marketing points that are irrefutable to international oceanic transportation:

1) Fuel costs are expensive and will continue to rise. 2) It is an extra 7,900 miles of wear and tear on vessels to traverse around the southern

tip of South America, Cape Hope. 3) The route around Cape Hope is perilous. It is one of the most dangerous sea routes in

the world. Maritime insurance providers frown upon writing policies for vessels traveling that route; when carriers issue policies, they are too expensive.

4) Travel time is shorter. It takes an additional 22 days to sail from San Francisco to New York via Cape Hope as opposed to traversing the Panama Canal.

5) The environmental public relations image of companies sailing around the Cape will have a negative effect. They leave a larger carbon footprint. Mitigation and remediation costs of any accident in the treacherous waters would be insurmountable to overcome.

Figure 3.1 Trade Route Options

As long as canal tolls remain under the cumulative cost of these five conditions, it will forever remain the only viable and reasonable option. The current rate for using the canal is upwards of $350,000 per transit. Recall that in 1972, it was $6,500. Researchers have indicated that the canal could potentially double that fee and it would still be less expensive to use the canal over sailing around Cape Hope. (LuvPanama)

ACP has turned the tide so much, that in 2010 the canal operations earned nearly $300 billion USD in revenue, of which $800 million was profit. Upon the expansion completion in 2015, yearly profits are projected to top $2 billion. No other country in Central America has that bright of an economic future. It is projected that Panamas Gross Domestic Product will double within eight years of the expansion completion; triple within twenty years. (LuvPanama)

An onsite interview was conducted with Dr. Albert White, Director of Transportation & Logistics for the Panama Chamber of Commerce. Dr. White emphasized that the revenue from the canal contributes to approximately thirty percent of the annual Panamanian Gross Domestic Product. Dr. White further commented, The canal is a cherished, non-depleting commodity to our country.

Case Study 2

Programming Comparisons

A. Funding/Economic Development In 2009, Mississippi State Port Authority adopted a vision plan to not only restore the port, but build a better, a more suitable venue that would provide transit space and facilities for current and future tenants. In order to meet the stipulation of the HUD grant, MSPAs market strategies are twofold: 1) maintain and support the growth and development of its current tenants 2) provide marketable area(s) that would attract new tenants. Whichever approach is taken, the overall approach is to increase container throughput and/or bulk cargo tonnage. Increase in either operation would produce new jobs. The current annual container throughput is 212,000 TEUs. According to the current master plan, the port will be able to facilitate up to 1 million TEUs by 2018 to help meet the job creation mandate. This throughput will be comparable to the Port of Cristobals 750,000 annual TEU throughput. Cristobal is located in the Colon Free Trade Zone, just outside the Atlantic Lock of the Panama Canal.

The current marketing approach for attracting a new maritime tenant is to provide a 50-acre site located on the southern end of the West Pier with dedicated wharf frontage for birthing and an intermodal facility, complete with road and rail access. These accommodations would easily attract a high-capacity container tenant or large-tonnage bulk operator. Another non-maritime site is being developed on the North Harbor. This 23-acre site could be utilized as a public retail area, warehouse distribution facility, or even an entertainment venue. Any jobs created by these

non-maritime operations would also count toward the jobs creation mandate. The only exclusion for jobs creation is through the development of gaming operations and revenues.

As mentioned earlier, the Panama Canal Expansion is financed through a public referendum to publically finance the program. In its simplest form, financing has to be repaid with interest. A consortium of global banks served as lenders to the Panamanian government. The Panama Canal Authority compiled a stable business plan that was accepted as financially feasible and stable to the lending consortium. The canal revenues are projected to cover the debt as well as support the Panamanian economy. This is in contrast to the publically funded PGRP. The public funds were made available and allocated by HUD with the stipulation of job creation, not payback.

B. Master Planning The master planning process for both programs began with a conceptual vision plan. Each plan was intended to be dynamic and continually updated as economic, engineering, and political environments change. Parsons Brinkerhoff developed the master plan for the canal expansion, which included doubling the transit capacity and accommodating larger vessels. The premise of the plan was to establish new traffic lanes and new lock systems (referred to as Third Set of Locks) positioned at each end of the canal. The new Pacific Locks will be located just southwest of the current Miraflores Locks and the new Atlantic Locks will be located east of the Gatun Locks. Furthermore, extensive dredging will be required at each entry and at various locations along the canal to allow for deeper draft vessels. Another major consideration of the master plan was to ensure that current canal operations were not interrupted during the expansion program. The Master Plan was adopted and implemented through a government referendum and accepted proposal in April, 2006 (ACP).

Figure 3.2 depicts conceptual renderings of the Third Set of Locks Project. This arrangement will be constructed at each end of the canal.

Figure 3.2 Renderings of New Locks

The Ports and Maritime Group at CH2MHILL, a Denver-based design firm, developed the Master Plan for the Port of Gulfport Restoration Program. The initial plan was submitted as a 10-Year Work Plan that provided for a high-capacity stacked container terminal, capable of handling up to two million TEUs per year. It included provisions for remediating the Port from damages incurred by Hurricane Katrina in 2005 and completing an already active fill project that was destroyed by the storm. It also entailed performing environmental assessments, permitting, and design and construction of a 160 acre expansion directly south of the existing ports west pier. Additional activities of the master plan included design and construction of an intermodal facility, new tenant transit facilities, and reinforcing the current wharf structure to accommodate new rail-mounted gantry cranes. The final aspect of the original plan was to deepen the ports navigational channel to 45 feet. The Master Plan was adopted by MSPA and Mississippi Development Authority in April, 2009. The Executive Summary of the Master Plan is as follows:

To facilitate the restoration of the Port and related public infrastructure and facilities, to mitigate future storm damages, and to provide long-term recovery of the Port operating capacity, while providing a platform for a sustainable recovery of the Mississippi Gulf Coast. The direct goals are to position the Port as the leading container port on the Gulf of Mexico for the next 100 years and to create well-paying jobs for South Mississippi residents.

The plan was developed to be adaptable to the changing market conditions and port tenant requirements. The 10-Year Work Plan had a program budget of $1.6 billion dollars. Currently, only the $570 million HUD funding has been allocated, subsequently scaling back the Master Plan. Concessions included dropping the design and construction of the future expansion, deepening the channel, and scaling back the TEU capacity. Environmental assessments and permitting for those activities remain tasks under the current plan. The Master Plan was officially amended and renamed the PGRP Implementation Plan in August, 2010. The Implementation Plan reflected only activities that could be supported with the respective funding. Activities were limited to the ports west pier and portions of the north harbor. The current plan is shown below in Figure 3.2 and allows for approximately 73 acres of terminal space for new tenant development, or in payback termsjob creation. A conceptual rendering is shown in Figure 3.3.

Figure 3.3 West Pier Tenant Layout

C. Engineering Both programs are faced with major engineering challenges, which in return could produce major engineering accomplishments. After each master plan was adopted, each respective owner contracted some of the worlds best engineering firms to lead design and engineering efforts.

Panama used a design-build model to tackle the Third Set of Locks at each end of the canal. The design-build contract was awarded to a consortuim, or joint-venture, of four construction and engineering firms in July, 2009 in the amount of $3.2 billion dollars. The consortium consists of Sacyr Vallehermoso, Impregilo, Jan De Nul, and CUSA. The notice to proceed was issued on on August 25, 2009. The main purpose for adopting the design-build model was to fast-track the various construction packages that each lock entails. This format allows the engineering teams to complete a certain design package and instantly turn it over to their construction counterparts, without any procurement delays. It also provides for continual continuity and communication between design and construction. This approach also minized the amount of entities contracted directly with the ACP. (ACP)

One of the many engineering feats on the canal expansion was to utilize sliding gates in lieu of the traditional hinged gates that are being used on the current locks. The sliding gates allow for a faster operation of the lock systems and provide a more water-tight seal. Extensive mechanical engineering and hydraulic analyses were required to design the sliding gates. Figure 3.5 shows the sliding gates being manufactured by Cimolai, a metal fabrication company in Italy. Refer back to Figure 3.2 for a conceptual depction of the operable sliding gates.

Figure 3.4 West Pier Rendering

Figure 3.5 New Gates under Construction

The PGRP program is taking a more traditional approach to the engineering model, design-bid-build. MSPA has contracted more than a dozen engineering consulting firms to design the various aspects of the program. Speciality designers include coastal, geotechnical, civil, electrical, marine, structural, and mechanical engineers. Other consultants were contracted to perform environmental and permitting assessments. Because of this model, time allocation is built into the program schedule to allow for procurement of construction contracts.

One of the main hurdles in engineering the port restoration was to protect port assests from future storm damage. The decided approach was to elevate the entire west pier from an average elevation of +8 mean sea level (MSL) to +13 MSL and extensively protect the shorelines with armor stone. Other major engineering hurdles included retrofitting an antiquated wharf structure to adequately hold new rail-mounted gantry cranes. Extensive research was undertaken to deternime the existing conditions below the wharf.

Finally, there were significant geotechnical investigations and engineering on an open-water fill project that added 24 acres of new land to the west pier. The design included marine dredging operations to create a fill prism that vertexed at -20 MSL. The intent of the design was to place sand fill in lifts as to not displace the underlying soft clays. The initial geotech report showed soft clays as deep as -40MSL. Significant efforts were made in both design and construction as to limit the amount of mud displacement, while creating a suitabale foundation for future structures. The left side of Figure 3.6 shows the fill and shoreline protection being applied on 24 Acre Project.

D. Construction As stated earlier, the majority of construction at the canal expansion was directly tied in with the design-build contract for both lock systems. However, other construction only contracts were awarded for large excavation and fill projects. A deepening and widening project to the Pacific

Figure 3.6 Aerial Photo of Port of Gulfport (June 2013)

entrance of the canal was awarded to Dredging International in April, 2008 for $178 million. The contract stipulated that 8.7 million cubic meters of material be dredged and removed from the project site. There are roughly ten other similar stand-alone construction projects throughout the program.

An important aspect of publically funded/financed construction projects is jobs creation. The table below, Table 3.1, shows that as of September, 2012, over 27,000 direct construction jobs have been created due to the canal expansion.

Table 3.1 - Job Creation Log (Panama Canal Expansion)

In contrast to the design-build approach taken by the ACP all construction contracts on the PGRP have been awarded via the design-bid-build delivery method. The current programming forecast requires seventeen independent construction projects to complete the program. An independent construction manager was hired by MSPA to oversee all field construction activities and coordinate logistics with the respective engineer of record. Table 3.2 lists each of the seventeen construction projects associated with the port program.

Table 3.2 PGRP Construction Projects

1 North Harbor Demolition 10 Infrastructure Phase 12 60 Acre Fill 11 Infrastructure Phase 23 24 Acre Dredge 12 Infrastructure Phase 34 24 Acre Fill 13 Crowley - North Harbor5 Plus 25 Fill, Phase 1 14 North Harbor Clean Up6 West Pier PVD Completion 15 Port Equipment7 IDIQ Fill Projects 16 Tenant Facilities8 Wharf Crane Rail Upgrades 17 Port Operations Building9 West Pier Shore Protection

PGRP Construction Projects

To date, the PGRP has generated 204 construction related jobs. These jobs are independent of and do not could toward the 1,200 permanent jobs that must be created due to funding stipulations.

E. Sustainability Both programs are actively pursing ways to eliminate construction and operational waste, reduce the carbon footprint, and construct facilities with low operational overheads. The canal expansion has adopted every environmental standard and best practice imaginable, from reforestation, to an extensive archaeological rescue policy, to water efficient lock designs. In keeping with sustainable development principles, the canal will use unique water-saving basins to help mitigate the loss of water due to lock operations. Figure 3.7 is a conceptual rendering of how the new locks will generate a 7% water savings over the existing locks. Although outside the canal expansion scope, it is of interest to note that the entire Panamanian community has adopted various sustainable practices. The City of Knowledge, located next to the Miraflores Locks, recently commissioned a Leadership in Energy & Environmental Design (LEED) Platinum dormitory facility.

The PGRP is also taking steps to promote green construction. MSPA will implement a series of photovoltaic cell arrays on the roof structures of the tenant transit facilities that provides power to site lighting and various other electrical components, therefore reducing the energy demand from the local power authority. Also, MSPA is exploring the feasibility of registering their new Port Operations building as a LEED Silver/Gold project. F. Scheduling Both programs track the schedule progress and budgeted costs using a Critical Path Method scheduling method. A cost-loaded schedule is kept and maintained on all program activities and checked against an Earned Value Measurement. Both programs utilize a combination of MS

Figure 3.7 - Cross Section of New Lock

Project and Primavera P6 software. All critical activities should be complete on the canal expansion by the second quarter of 2015. See Figure 3.8 for a Gantt chart showing the expansion critical path. Figure 3.9 reflects a work breakdown structure, level 2 of the PGRP and shows the program obtaining final completion by the third quarter of 2016.

Figure 3.8 - Panama Canal Master Program Schedule

Figure 3.9 - PGRP Master Program Schedule

4 RESULTS & RESULTS IMPACTS

The only distinct difference observed in programming activities was the project delivery method. The Panama Canal Authority was able to utilize a design-build delivery method to fast track the individual projects, therefore the overall program. Mississippi State Port Authority delivers its projects in more of a linear, or traditional, delivery method. Mississippi contract procurement laws have impeded the Ports ability to procure and award design-build contracts. Three notable impacts were identified from studying and observing the different programming functions.

1. Regardless of language, cultural, and geographic barriers, basic programming techniques were applied similarly.

2. Always explore the various options for a project delivery method that best suits the needs of the program.

3. Economic development, especially as it relates to job creation is equally important in each region.

Table 4.1 shows the major differences and comparable similarities between the two programs.

Comparison Category ACP (Panama Canal Expansion)

MSPA (Port of Gulfport Restoration Program)

Funding/Economic Development

Financed; Pay Back with Interest

Funded; Jobs Creation Stipulation

Master Planning Third Set of Locks & Dredging Projects West Pier Development; 73 Acres for New Development

Design Design-Build for Locks;

Typical Design Delivery for Dredging & Excavation

Independent Design Consultants

Construction 1 Large DB Contract and Various DBB Contracts;

27,000 Jobs Created

17 Independent DBB Contracts; 204 Jobs Created

Sustainability Water Efficient Locks,

Reforestation, Archaeological Preservation

PV Cell Array, LEED Ops Building

Scheduling CPM; 2015 Completion CPM; 2015 Substantial Completion

Table 4.1 Comparison Chart

5 SUMMARY Despite of the differing geographical locations and cultural differences, each of the six programming aspects measured proved to have comparable means and methods and comparable results. Each program has to repay the funding, one way or another. Each has a feasible plan to do so. Job creation is a major concern for each. Both programs have adopted sustainable design and construction practices. Both programs rely on CPM scheduling for progress and budget tracking.

It was a pleasure exploring the different programming functions at each location. By comparing the two against each other, it helped identify common practices in global engineering and construction industry. It also brought to light that each regions public policy may hinder the ability to procure projects through a certain delivery method. The design-build delivery method is accepted exclusively in Panama and is working well on each of the new locks. Design-build is also common in the United States, but could have different restrictions in each state.

Finally, the implications and impacts of programs of this magnitude reach far beyond the engineering and construction industry. The whole premise and purpose of each program was to ensure economic development and growth in the global transportation market, while facilitating invaluable employment opportunities both interim and long-term.

6 -REFERENCES (ACP, 2007) ACP. The Panama Canal An Overview. Available at http://www.panacanal.com/eng/plan/documentsos/propuesta/acp-panama-canal-an-overview.pdf (Capitol Ideas, 2012) Capitol Ideas, March/April 2012, Hot Topics: Ports in Transportation. http://www.csg.org/pubs/capitolideas/Mar_Apr_2012/Mar_Apr_2012_images/CIMarApr12.pdf (CE News, 2007) Civil Engineering News, January 2007

(Hawkins, 2006) William R. Hawkins, Panama as a Bellweather of U.S. Fortunes: The Storm Gathers, American Economic Alert, 4 November 2006, available at http://www.americaneconomicalert.org/view_art.asp?Prod_ID=25923

(LuvPanama) #38. Economic Impact of the 2014 Canal Expansion on Panama's Future, available at http://www.luvpanama.com/economic-impact-of-the-2014-canal-expansion.html

(Mann, 2007) Carlos G. Mann, The Panama Canal Expansion Project: US Interests and Other Considerations, ISA, Chicago, 28 February 2007

(OAS, 2004) Organization of America States, Permanent Council, Commemoration of the Twenty-Fifth Anniversary of the Entry Into Force of the Torrijos-Carter Treaties on the Panama Canal, CP/DEC. 27 (1446/04), 29 September 2004, available at http://www.oas.org/council/resolutions/dec27.asp

(Texas, 2006) New Study Looks at Panama Canal Expansions Effect on Texas Transportation. Texas Department of Transportation press release, 28 November 2006, available at http://www.dot.texas.tx.us/news/029-2006.htm

(USTR, 2006) Office of the United States Trade Representative, Trade Facts Free Trade with Panama, 19 December 2006, available at http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2006/asset_upload_file138_10233.pdf