The proposed $5.25-billion upgrade to the Panama Canal both Panama and Colombia racing to implement major seaport upgrades in an effort to capitalize on the expected surge in shipping.
�We stand to benefit enormously because our ports are adjacent to both ends of the canal,� said Colombia�s Transportation Minister Andres Uriel. �The impact to world commerce with the expansion of the canal will benefit the entire region of its direct influence.�
The proposed canal expansion will involve the construction of a third shipping lane to the 80-kilometer long waterway and the building of a new set of locks. When completed in 2014, the upgrades will double the canal�s capacity as well as allowing the passage of a new generation of mega-ships that currently are too large for the lock system.
The expansion plan still must be approved by the Panamanian congress and pass a public referendum.
The expansion plans for the canal were a major factor in Colombia�s decision to invest more than $156 million for port improvements over the next ten years. Studies by the Panama Canal Authority (PCA) show that a boost in throughput capacity at the canal will trigger an increase in shipping that will in turn drive an even greater need for port capacity in the region.
Currently, about 80 percent of the country�s international cargo is run through its seaports. The five largest ports � two on the Pacific and one on the Caribbean coast � see more than 135 million tons of cargo each year. All of them have become overwhelmed in recent years due to lack of upgrades and the upswing in trade as internal security has improved.
Expansion to the Port of Buenaventura and the Port of Santa Marta alone are pegged at $285 million, but since almost every one lacks space to expand, the construction of a new port is almost certain. Uriel said he expects improvements to raise that figure to 175 million tons but that is the bare minimum necessary to handle increased demand that a free trade agreement with the United States signed late last year would bring.
In addition, the country�s $770-million road refurbishing project prioritizes commercial transportation corridors particularly those from the interior to the coasts.
Panama has prioritized port development as well. The county has proposed building a new mega-port in the Palo Seco-Farfan area on the Pacific coast. Panamanian officials invited bids on the project this January and expect to award the job in June. Preliminary cost estimates put the first stage of the project between $850 million and $1 billion range
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Related Links: Currently Panama has three ports on the Caribbean and two on the Pacific. The Port of Balboa recently completed more than $260 million in infrastructure upgrades. In addition, the Manzanillo International Terminal on the Caribbean recently saw the completion of a $100-million expansion program.
Currently Panama has three ports on the Caribbean and two on the Pacific. The Port of Balboa recently completed more than $260 million in infrastructure upgrades. In addition, the Manzanillo International Terminal on the Caribbean recently saw the completion of a $100-million expansion program.
While the canal is expected to create a boom in port development, officials with the American Association of Port Authorities said that will be limited to facilities geographically close to the waterway for the time being. Longer term, the increased cargo traffic caused by the wider canal will require an upgrade of existing port facilities region-wide but other factors are necessary to create a boom in new port construction.
�I don�t believe there will be need to increase the number of ports in the region for some time,� said Juli�n Palacio, the association�s representative for South America. �The canal expansion will only increase port traffic so much. These countries need to build more interior infrastructure in order to create the need for building new ports.�
