Standing on a barge cruising through the Panama Canal's Gaillard Cut, Maximiliano DePuy beams proudly. The geotechnical engineer for the Panama Canal Authority points to the 539-ft-high Gold Hill promontory on one side of the waterway, from which 75 ft of rock has been cut out since 1986. On the opposite bank looms Contractor's Hill, already reduced to 370 ft in previous work. Stabilizing the canal's landslide-prone slopes metaphorically represents protecting a precious pathway for Panama, owner of the 51.2-mile-long construction landmark since 2000, when the U.S. turned it over to the locally run Panama Canal Authority.

THEN AND NOW Original widening in 1930s of canal's Gaillard Cut (top) will be expanded in new program (bottom). (Photo courtesy of Panama Canal Authority)

That "path between the seas," as historian David McCullough's epic book describes the Panama Canal, is headed for a new chapter in its colorful 88-year history as it strives to become a popular travel spot and maintain a pivotal role as a shipping and maritime nexus. A $1-billion infrastructure investment program may culminate with a final decision to build a new set of locks. Trains are set to run on a rebuilt railroad paralleling the canal, and design is under way for a second bridge over it. Private owners are overseeing expansion of major ports on either end, while Panama's public works ministry plans a light rail system to link planned real estate developments.

Opened to shipping in 1914, the canal now handles a daily average of 38 vessels that are raised and lowered on the Atlantic Ocean side by the massive 2-kilometer-long Gatun Locks and, at the Pacific, the Pedro Miguel and Miraflores Lock. Construction of the canal, first considered by the Spanish in 1534, then attempted in 1880 by France and finally undertaken by the U.S. in 1903 for 10 years, has been well-documented. Now the story continues.

FUTURE. Plans for the canal's future "keep growing and growing," notes Agustin Arias, canal capacity project manager. The canal can accommodate ships up to 106 ft wide, the so-called new generation of larger "post-Panamax" vessels. Spurred by growth in their use, the government has a $1-billion program to increase capacity from 14,000 vessels a year to 16,000. That includes buying $54 million of new lock locomotives, new tracks and tugboats, conversion of miter gate locks to hydraulics and a $30-million global positioning vessel tracking system.

The existing 8.5-mile Gaillard Cut is being widened from 500 ft to a maximum of 730 ft to allow two-way passage of the bigger ships and to decrease the average 30-hour total canal travel time, including waiting, by about six hours. The cut, which crosses the Continental Divide, is prone to landslides, notes Luis Alfaro, the authority's engineering director. A landslide control program in place since 1968 monitors slope movements. "There have been only two large slides since then," he says. "Hundreds of others were averted."

RAIL RENEWAL Rebuilt Panama Canal Railways stretches across length of country. (Photo courtesy of Panama Canal Railway Authority)

The $219-million widening, approved in 1991, consists of 18 contracts and should be complete by next year, says Alfaro. In 1996, the government decided to speed the program by 10 years by adding cutter section dredging to existing bucket dipping dredging. Contractors from Japan, Costa Rica, the U.S. and elsewhere excavated about 29.2 million cu yd of soft rock and drilled and blasted harder rock. Another 44 million cu yd was dredged. The Rialto M. Christensen, with a 15-cu-yd bucket, is the third-largest of its type in the world, says Alfaro. Besides the spoil, crews dredged up old locomotives from the Panama Canal Railway, as well as vehicles, bridge segments and remnants of towns now submerged by man-made Gatun Lake, he notes. Ten disposal sites are located along the canal section. When work is completed, the Gaillard Cut will measure 630 ft wide along the straightaways and 730 ft at the curves.

The next chapter in the canal's construction history could be equally momentous. Bidding will begin this summer for conceptual design of a new set of locks that would accommodate the next generation of post-Panamax ships, says Arias. Feasibility studies are to be completed by the end of next year. If all goes smoothly, he adds, the canal authority expects its post-Panamax locks to operate in 2010. Before that, however, the canal must be assured of adequate water resources to handle new locks. The most promising of six options is to increase Gatun Lake's minimum 44.5-ft depth by 3 ft. Now in final design, the plan would increase storage capacity by six lockages a day, each equaling 55 million gal, Arias says. The scheme could cost $190 million and take up to eight years to finish.

The decision on whether to build new locks will come after studies on benefits and risks, which include construction scope and market forecasts of canal traffic. Arias expects firm cost estimates when studies are completed by the end of next year.

RIDING THE RAILS. Attention is also being focused on the canal zone's little-used railway, transferred to Panamanian control in 1979. A rail link between the ports of Cristobal and Balboa preceded the canal by almost 60 years, built to accommodate California Gold Rush miners from the East Coast as a faster alternative to land travel across the U.S. or the long sail around the tip of South America. The railroad was moved in 1909 to avoid submersion by the new canal but it fell into disuse.

(Graphic Illustration by Nancy Soulliard for ENR)

A joint venture of Kansas City Southern and Mi-Jack Products, Hazelcrest, Ill., is now rebuilding the 47.6-mile route and plans to operate it under a contract with a 25-year renewal clause, says Dave Starling, president of the Panama Canal Railway Co. The $70-million reconstruction is just about complete, and is expected to carry 75,000 containers a year between Cristobal and Balboa. "We would not have been interested in this if not for the two ports," says Starling. The company hopes port development and the intermodal opportunities from the double-track railway will help it strike gold this time around. Eventually, 20 trains a day will run on new continuously welded track widened to the U.S. standard of 56.5 in. Starling concedes it will take more than a year for the line to be profitable. Future phases will include expanding up to three tracks on either side.

A design-build team led by Neosho Construction, Topeka, Kan., and including Wilson & Co., Albuquerque, N.M, and local firms, cleared jungle grass along the old line and dug up rotted ties in often marshy conditions, surrounded by jungle wildlife. Wilson's Mexican subsidiary, Wilson Aries Grupo Industrial, sent Spanish-speaking workers to the site. The contractor had to take utility lines often buried just inches below the surface and reinstall them several feet down, says Richard Long, Neosho project manager. "We anticipated there would be some utilities, but we found three to four times as much," he says. But the subgrade from the 1909 railroad proved to be in much better shape than expected, and crews were able to continue track work through the rainy season.

Rebuilding work includes some 20 grade crossings and a new 7.5-mile track section near Colon to support a new container facility. Change orders of about $10 million relating to terminal station additions were incorporated into the contract, says Long. The last phases, including the freight terminal in Balboa, should be done by August. One passenger tourist train is already using the route once a day.

Building in an area lacking local rail expertise or materials was a challenge, says Starling. Concrete ties were shipped from Colombia; ballast and 1,440 ft of rail came from Canada, and was welded on site. Retrofitted locomotives and cars came from Amtrak. Politics also played a role, when disgruntled residents of poverty-stricken Colon blocked crews for a few days as a protest against the Panamanian government. Long says the team hired a number of locals, but there weren't enough jobs for everyone. "The workers are excellent, efficient and want to work," he says.

PORTS CALL. Modernization of ocean ports is critical to canal plans. Hutchinson Port Holdings Group, Hong Kong, won a 25-year concession contract in 1997 to operate Balboa and Cristobal ports. Most of a $140-million expansion program is concentrated at Balboa on the Pacific side, since "there is literally no competition on this side of the canal," notes Neil Proud, project manager for Hutchinson's Panama Ports Co.

The first two phases of work at Balboa cost $110 million and involved dredging 1 million cu yd of earth to a 12.9-m depth to match the canal, he says. A new 8.4-hectare container storage area equipped with three post-Panamax cranes and six gantry cranes has nearly doubled port capacity to some 900,000 TEUs (units equivalent to 20-ft-long containers). Tough conditions, including soil migration and crocodiles, and problems with rock fractures during pile-driving, caused a year's delay for German contractor Billfinger+Berger, says Proud. "Driven piles were not the way to go," he says. "Now we have a preliminary design for bored piles" for the third phase, to be completed in 2003. Work will involve 270 lineal m of piers, six hectares of container storage area and dredging of canal approaches. Bids are due by the beginning of August.

On the Atlantic side, Colon Container Terminal SA, a subsidiary of Evergreen Marine Corp., Taiwan, is investing $110 million in developing a marine terminal at Cristobal. The first phase's 1,800-ft quay, four Panamax cranes and six acres of container yard will be followed by another quay and eventual capacity of 1 million TEUs a year. Manzanillo International Termina-Panama SA, the local operator of Manzanillo port, is looking at a possible second container terminal on the Pacific side, near Balboa.

Anticipating extra traffic, the Ministry of Public Works last December selected a joint venture of T.Y. Lin International, San Francisco, and The Louis Berger Group, East Orange, N.J., to design a concept for a cable-stayed bridge over the canal, 20 km north of the steel arch Bridge of the Americas at the Pacific portal. Final design is due for completion by the end of this year. Panama will finance the estimated $100-million span. "The [ministry] specifically requested a cable-stayed bridge," says Rafael Manzanarez, deputy technical director for T.Y. Lin. "Concrete materials are readily available and they have the expertise locally to do that kind of work." He adds that two main towers will be placed to accommodate up to 120 m of future canal widening. "We're considering cast-in-place, primarily because we cannot use the water to bring in precast segments," he says.

The construction schedule for the 420-m-long, six-lane bridge will be tight because of Panama's rainy season, but "it's important to finish the job within the next 30 months," adds Man-Chung Tang, T.Y. Lin technical group director. Preliminary design is expected next month, and "they are prequalifying contractors as we speak." The ministry also plans to spend $35 million on 22 km of highway at both ends of the new bridge. The new roadway will snake through a former shooting range used by the U.S. Army. "Unexploded shells are a possibility" to consider for the future roadway contractor, says Tang. The entire project should be completed by March 2004.

The bridge and accompanying roadwork will be handled as design-build projects, although any future light rail in the capital, Panama City, cannot be done through build-operate-transfer schemes because resulting fares would be too high, says Luis Blanco, public works minister. But the ministry plans to seek bids this year for final design and rolling stock for an initial $200-million "Blue Line." The operations and management contract would be awarded as a 30-year concession, but financing is not finalized. The initial 13-km-long line would be at-grade, with 15 stations.

CRUISING Panama looks to a bright economic future with shipping and tourism facalities. (Photo by Eliott Kaufman for ENR.)

Colon, at the opposite end of Panama City both economically and geographically, could benefit from a future intermodal facility that would link the old military airfield to the ports and rail, and spur tourist development from cruise ships. New York City-based DMJM + HARRIS is leading a team on a six-month study for Panama on the intermodal facility, says Senior Vice President Ed Schmeltz. After the study, "We plan to go forward and create a logistics platform for uniting the elements of what's there," says Ed Boatman, a company vice president. The work could help push Colon further into the canal's economic sphere and make it another beneficiary of the expansion.