Transport

Increasing Command

New Port of Corozal

Despite billion dollar expansion projects underway in the country's existing ports, the inauguration of the Panama Canal expansion in 2016 to allow for the passage of larger container vessels is expected to double its capacity and has prompted the Panama Canal Authority (PCA) to give the go-ahead and initiate the prequalification and public tender process for the design, construction, and operation of a new container port in the Western district of Corozal.

The concession for Panama’s latest high-impact strategic project, the Port of Corozal, includes the construction of a wharf, container yard, and warehouses, as well as other supporting infrastructure within a 120ha area under the jurisdiction of the PCA. The construction, expected to begin in 2016, will be split into two phases and last until 2018. Once completed, the new transhipment container terminal will have the capacity to handle more than five million TEUs. The contract is set to consist of a renewable 20-year concession.

Immediately following the initiation of the prequalification process in November 2015, the project attracted interest from 13 international companies, including Panama Ports Company (PPC), which had initially opposed the project. PPC had previously expressed concerns about the implications of the new Port of Corazol on the safety and efficiency in the canal, saying that it would reduce business for existing ports, such as Balboa and Cristobal, which it has operated since 1997. However, the PCA has emphasized that the Port of Corazol will operate under the same rules and legal framework as the existing ports on both the Pacific and Atlantic side. Evergreen International (Taiwan), Hyundai Engineering & Construction (Korea), and APM Terminals (the Netherlands) have also expressed interest in the project.

A bill ensuring that the future port concessionaire enjoys the same tax benefits as the other port operators has yet to be passed by the National Assembly. Port operators in Panama are exempt from paying all import tax on the machinery, raw materials, vehicles, or other supplies related to the construction and management of their ports. It is hoped that an official legislation could be passed in January 2016, and the tender process finalized by June 2016 so that the work on the terminal can begin.

According to the PCA, the new port will allow Panama to exploit new commercial opportunities brought about by the canal expansion. In addition, the authority has estimated that the project will provide 1,300 direct jobs during its two years of construction, and a further 2,600 to manage the project during the first phase. It is estimated that approximately 3,800 additional direct jobs will be created upon commencement of the second phase.

The Corozal project will be the first of its kind in the region, with a guiding design principle being the creation of a sustainable ‘green port.’ According to the PCA, this will entail using the most efficient technology to reduce the impact on the environment during construction, and limiting emissions of greenhouse gases from its long-term operation. This includes the use of electrically operated cranes and terminals. Furthermore, measures will be taken to control air quality, water, noise, and waste in order to protect the surrounding community from harmful environmental impacts.

The new port of Corozal will increase the contribution made by the Panama Canal to the economy, which amounted to $9.6 billion between 2000 and 2014. The new port is set to further consolidate Panama’s position as an international logistics hub.

WIDE HORIZONS

Panama has for many years been conscious of the need to upgrade its canal in order to remain competitive. The call to expand it dates back to 1939, but efforts had been suspended due to the Second World War and later by the US invasion.
The project, carried out by the consortium Grupo Unidos por el Canal (GUPC) made up of Sacyr (Spain),Impregilo (Italy), Jan De Nu (Belgium), and Constructora Urbana (Panama), began in 2009 following approval by 77% of Panamanian citizens in a 2006 referendum. The project’s initial estimate was $5.250 billion and was scheduled for completion in October 2014. However, disputes with the contractors, cost overruns, and leaks discovered during testing have led to its inauguration being repeatedly delayed, initially to the end of 2015, and most recently from April to June 2016. Construction of the new third set of locks is now set to be finished by May, following which testing will be carried out before the inauguration takes place.The expanded canal will allow the passing of much larger “Post-Panamax“ vessels and has wider implications for international trade, allowing ships from Asia to reach the US two weeks faster than through the alternative Suez Canal route. It also allows Panama to take advantage of new opportunities created by the recent entry of the US into the LNG export market. Jorge L. Quijano, Administrator of the Panama Canal Authority, said “We are looking at progressively processing up to three Post Panamax LNG vessels a day by 2020.“ A record 340.8 million tons were processed during FY2015, and shipments through the canal could rise to 360 million tons in 2017.A number of projects to provide the necessary additional capacity, including port expansions and the new port of Corozal, have been spurred by the canal enlargement, with positive spillover effects for foreign investment and employment. The expansion also called for a new third bridge over the canal.
The Panama Canal, which was handed back to Panama in 1999 following the signing of the Torrijos-Carter treaties, today accounts for a third of the country’s GDP, when taking into account the entire maritime and logistics industry.

You may also be interested in...

Landscape,From,Bird,View,Of,Cargo,Ships,Entering,One,Of

Transport

Maritime Chokepoints in 2022

Global shipping limits

View More

Finance

Fintech in Panama 2020

Growth of Financial Inclusion

View More

Energy & Mining

Not Easy Being Green

Renewable Energy in Panama

View More
Beautiful,Lonely,Beach,In,Caribbean,San,Blas,Island,,Kuna,Yala,

Tourism

Holiday Fund

International Tourism Promotion Fund

View More
Darien,Province,,Panama.,07-18-2019.,Indigenous,Female,Adolescents,With,School,Uniform

Health & Education

Building a Foundation

National Pact for Education

View More
The Right Prescription

Health & Education

The Right Prescription

Health pact

View More
Channeling the Population

Real Estate & Construction

Channeling the Population

Urbanization

View More
A Momentous Crossing

Transport

A Momentous Crossing

Fourth bridge

View More
View All Articles