Panama Canal DelayStudents:

Carolina MirandaGabriela LarreaRosa RamirezErika VillaltaLizeth Jaen

Teacher: MSc Max Galarza

IntroductionThe Panama Canal is a 77.1-kilometre ship

canal in Panama that connects the Atlantic Ocean to the Pacific Ocean.

Is a key conduit for international maritime trade.The current locks are 33.5 metres (110 ft) wide. A third, wider lane of locks is currently under

construction and is due to open in 2015.

CapacityThe canal is currently

handling more vessel traffic than had ever been envisioned by its builders.

In 1934 it was estimated that the maximum capacity of the canal would be around 80 million tons per year

Canal traffic in 2009 reached 299.1 million tons of shipping.

To improve capacity, a number of improvements have been imposed on the current canal system. These improvements aim to maximize the possible use of current locking system:Improvements to the tugboat fleetDeepening of Gatun Lake navigational channels from

10.4 to 11.3 metres (34 to 37 ft) PLD;Modification of all locks structures to allow an

additional draft of about 0.30 metres (0.98 ft);Deepening of the Pacific and Atlantic entrances;Construction of a new spillway in Gatun, for flood

control.

Panama Canal ExpansionThe Panama Canal expansion project (also called the

Third Set of Locks Project) is intended to double the capacity of the Panama Canal by 2015 by creating a new lane of traffic and allowing more and larger ships to transit.

The Panama ProjectThe project will:Build two new locks, one each on the Atlantic and Pacific

sides. Each will have three chambers with water-saving basins.

Excavate new channels to the new locks.Widen and deepen existing channels.Raise the maximum operating level of Gatun Lake

In 2006, ACP ( Canal Panama Authority) estimated the cost of the third set of locks project at US$5.25 billion.This figure includes design, administrative, construction, testing, environmental mitigation, and commissioning costs, as well as contingencies to cover risks and unforeseen events, such as accidents, design changes, price increases, and possible delays.

Then-Panamanian President Martín Torrijos formally proposed the project on 24 April 2006.

A national referendum approved the proposal by 76.8 percent of the vote on 22 October.

The project formally began on 3 September 2007.

The project is expected to create demand for ports to handle post-Panamax ships.

ProblemAn initial attempt by the

Panama Canal Authority to continue expansion works on the canal has been rejected by contractors asking for payment of $1.6 billion of cost overruns.

According to the Financial Times , the Panama Canal Authority (ACP) offered $100 million.

Spain positionSacyr broke down the

negotiation with Panama for how to finance a $1.6 billion cost overrun and warning that 10.000 jobs are at risk as a result.

Spanish Minister for Development Ana Pastor said the stoppage of the work was the worst possible outcome in the dispute.

Panama PositionThe Panama Canal Authority, or ACP, said Wednesday

5th Febraury, it will not yield to "blackmail" and is looking for ways to restart work on a third set of locks for the inter-oceanic waterway, accusing the consortium tasked with the expansion of breaching its contract by making a unilateral decision to halt construction.

The GUPC has agreed to contribute $100 million, but asked the ACP to increase their contribution to $400 million in a counter offer.

Up to Friday 9th, they try to revive conversations, but it did not succeed.

DELAY AND ITS CONSEQUENCESThe breakdown in negotiations between GUPC and the

Panama Canal Authority (ACP) over cost overruns has threatened the project and raised the possibility of years of court battles.

One hundred years after its inauguration, the Canal, which handles 5 percent of world trade, is faced with delays in the construction of the third set of locks.

"The breakdown in negotiations put the expansion of the Canal of Panama and up to 10,000 jobs in imminent risk," said consortium member Sacyr, whose shares fell 5.73 percent in trading today.

The consortium estimates that the work will be delayed three to five years if there is no agreement.

Canal still open

Expansion of the canal is important, but the construction has not stopped operation of the canal as noted by the U.S. Grains Council with its export destinations of U.S. grain, including soybeans, corn, sorghum, wheat, rice and other products transited through the Panama Canal following the 2013 U.S. harvest season.

According to the Panama Canal Authority, this is a record year for U.S. grain cargoes passing through the canal, with more than 20.4 million metric tons shipped October through January. That's a 36 percent increase over the same time period last year.

U.S. corn cargoes shipped through the canal have increased more than 78 percent compared to 2012 volumes. This is partly reflective of the higher corn production in 2013.

NETGRAPHYhttp://www.cruisecritic.com/news/news.cfm?ID=5670http://en.wikipedia.org/wiki/Panama_Canalhttp://

www.npr.org/templates/story/story.php?storyId=263469286

http://foros.prensa.com/uhora/locales/sacyr-consorcio-fracaso-negociaciones/271513?en

http://www.laprensasa.com/309_america-in-english/2401817_panama-canal-looks-to-get-stalled-expansion-project-restarted.html

http://www.prensa.com/uhora/locales/negociaciones-amenazan-ampliacion-canal/271487?en

http://www.agprofessional.com/news/244336081.html