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Panama Canal Expansion - Third Locks 2006-2015

On 24 April 2006 the Chairman of the Panama Canal Authority's (ACP) Board of Directors announced its recommendation to build a new lane along the Panama Canal that will double capacity and allow more traffic. This is the result of comprehensive analyses and studies by the ACP. The project is estimated to cost $5.25 billion and will be paid entirely by users of the Canal through a graduated toll system.

The third set of locks project is a plan to expand the Canal's capacity composed of three integrated components: (1) the construction of two lock facilities - one on the Atlantic side and another on the Pacific side - each with three chambers, each which include three water reutilization basins; (2) the excavation of new access channels to the new locks and the widening of existing navigational channels; and, (3) the deepening of the navigation channels and the elevation of Gatun Lake's maximum operating level.

Objectives of the expansion of the Canal's capacity through the construction of the third set of locks The objectives of the Canal expansion are to: (1) achieve long-term sustainability and growth for the Canal's contributions to Panamanian society through the payments it makes to the National Treasury; (2) maintain the Canal's competitiveness as well as the value added by Panama's maritime route to the national economy; (3) increase the Canal's capacity to capture the growing tonnage demand with the appropriate levels of service for each market segment; and, (4) make the Canal more productive, safe and efficient.

The proponed canal expansion was justified by the cargo volume that will be able to transit through the Canal, and not just by the vessels sizes it will be able to handle. Given the intention to build new locks, it is advantageous for Panama that they be able to handle the most appropriate vessel size for the routes that the Canal will serve. Moreover, a larger lock will allow the Canal to handle more tonnage while using less water at lower costs.

The Canal, expanded with larger locks, besides allowing post-Panamax containerships to transit, will facilitate the transit of post- Panamax liquid bulk vessels (Suezmax), dry bulk vessels (Capesize), vessels for transporting liquefied natural gas and passenger vessels. Typical Capesize y Suezmax vessels have a deadweight of 130,000 - 140,000 tons; a 270 - 280 m length, and a 40 - 45 m width. Consequently, it will open the Panama route to new markets that, due to the present size of Canal locks, have not been able to develop. Among these new markets is the transport of coal from the U.S. and Colombia to East Asia, oil from Venezuela to East Asia, natural gas from Peru to the U.S. East and South Coasts, as well as post-Panamax cruise ships.

The Canal today has two lock lanes. Each of these two lanes uses three chambers or steps to allow the transit of vessels between sea level and Gatun Lake's level. The locks on the Pacific end of the Canal are separated in two complexes: one is located in Miraflores, with two steps, and the other is in Pedro Miguel, with a single step. The locks on the Atlantic end consist of a single complex in Gatun, which has three steps. The existing locks will continue to operate after the third set of locks is incorporated in the Canal. With the appropriate maintenance, the existing locks will continue to operate indefinitely.

The proposal consists of adding a third lane, through the construction of two lock facilities, one at each end of the Canal. Each of the new lock facilities will have three consecutive chambers, designed to move vessels from sea level to the level of Gatun Lake and back down again. Each chamber will have 3 lateral water reutilization basins, for a total of 9 basins per lock and 18 basins in total. Just like in the existing locks, the new locks and their basins will be filled and emptied by gravity, without the use of pumps. Both lock facilities will be located within the patrimonial area of the ACP, adjacent to the existing locks. The new locks and their channels will form a navigation system which will be integrated into the existing locks and channels system. A lock facility will be located at the Atlantic end of the Canal, on the east side of Gatun locks. The other facility will be located at the Pacific end of the Canal, to the southwest of Miraflores Locks.

The location of the new locks uses a significant portion of the excavations of the third set of locks project started by the U.S. in 1939 and suspended in 1942 when the U.S. entered World War II. The new locks will be connected to the existing channel system through new navigational channels.

The new lock's chambers will be 427 m (1,400') long, by 55 m (180') wide, and 18.3 m (60') deep7. They will use rolling gates instead of the miter gates used by the existing locks. Rolling gates are used in almost all existing locks with dimensions similar to those being proposed8 and are a well-proven technology. The new locks will use tugboats to position the vessels instead of locomotives. As in the case of the rolling gates, tugs are successfully and widely utilized for these purposes in locks of similar dimensions.

The construction of the third set of locks project will take between seven to eight years. The new locks would begin operations between fiscal years 2014 and 2015, assuming the project was approved in the required national referendum during calendar year 2006. In a national referendum 22 October 2006, Panamanians voted to expand the Canal. A ceremony celebrated the groundbreaking for the beginning of the expansion of the nearly 100-year-old waterway on 03 September 2007.

The construction cost of the third set of locks is estimated at approximately $5,250 million. This estimate includes design, administrative, construction, testing, environmental mitigation and commissioning costs. Additionally, this cost includes contingencies to cover risks and unforeseen events such as those that might be caused by accidents, design changes, price increases, and possible delays, among others.

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