Unblocking Panama canal’s bottleneck

by Dave

Business | The Guardian

Panama has steamed ahead with a massive expansion of its canal to keep trade between Asia and North America flowing through the waterway.

It has revealed bids for the main contract in a $5.25bn plan to widen the canal, clearing the way for one of the world’s largest and most lucrative infrastructure projects. The Panama Canal Authority, an autonomous government agency, ended months of speculation by determining the “best-value” bid from three rival consortiums, signalling the almost certain winner.

The consortium, led by Spain’s Sacyr Vallehermoso and Italy’s Impregilo, significantly undercut its rivals with a $3.12bn bid to build new locks that will double the canal’s capacity and accommodate a new generation of super-size container ships.

The new locks, one on the Atlantic entrance, the other on the Pacific Ocean, will consolidate central America’s isthmus as a gateway for global trade.

“As far as shipping is concerned this is massively important,” said Mark Page of Drewry Shipping Consultants in London. “It is the single biggest shipping infrastructure project since they built the original canal.”

The project, which needs 5,000 workers, is due for completion in 2014 to coincide with the 100th anniversary of the original inauguration of the canal, an engineering feat considered one of the modern wonders of the world that cost more than £600m to build.

The biggest losers from the canal’s expansion are expected to be US west-coast ports and railways. Another casualty will be Nicaragua’s dream of building a rival canal, always a long shot for Central America’s poorest country.

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