BOYD	STEAMSHIP CORPORATION AGENTS AT THE PANAMA CANAL FOUNDED IN 1909

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PANAMA CANAL NEWS

July 2nd, 2007

TENTATIVE SCHEDULE OF LOCKS MAINTENANCE WORK FOR FY 2007.

PANAMA CANAL INFRASTRUCTURE INVESTMENTS AND SERVICE ENHANCEMENTS TO MOVE FORWARD

PANAMA CANAL EXPANSION AND THE ENVIRONMENT

TENTATIVE SCHEDULE OF LOCKS MAINTENANCE WORK FOR FY 2007.

PANAMA CANAL INFRASTRUCTURE INVESTMENTS AND SERVICE ENHANCEMENTS TO MOVE FORWARD

Numerous enhancements of and investments in the Panama Canal will move forward. On Saturday, June 30, 2007, the 2008 fiscal year budget for these projects, which includes investments in Canal service, reliability and efficiency, was approved by the Panamanian legislature. The ACP is an autonomous agency and its budgets are reviewed and given final approval by the legislature.

Enhancements include ongoing investments in technology, new equipment and capital improvements. Moreover, the Canal's 2008 funds to continue the expansion program were approved. Expansion appropriations include, among others: funding the second phase of dry excavation of the new lane on the Pacific side, the widening of the Gaillard Cut and the deepening of the navigational channel in Gatun Lake.

Expansion will build a new lane of traffic along the Panama Canal through the construction of a new set of locks, which will double capacity and allow more traffic and wider ships.

"These investments are the product of detailed analysis and evaluation to ensure that we continue funding the right projects to continuously improve and maintain Canal service. The business of the Canal is to ensure that we provide customers with a safe and reliable service. Consistently increasing the value of the Panama Canal remains our top priority," said ACP Board of Directors Chairman and Minister for Canal Affairs Dani Ariel Kuzniecky.

A market-oriented business model, steady growths in tonnage and income, reliable service and increased demand have yielded a higher value for the Canal. The ACP will continue its efforts to maximize Panama's strategic location as it becomes the logistics and transportation hub of the Americas.

PANAMA CANAL EXPANSION AND THE ENVIRONMENT

Lorne Matalon in Panama City
for National Geographic News

June 27, 2007

Engineers have begun working on an ambitious but controversial plan to add a third shipping lane to the Panama Canal. The planners claim that the 5.25-billion-U.S.-dollar expansion, which will add two new three-chamber locks at either end of the canal, will have little impact on the surrounding environment. But local residents, mindful of the thousands forcibly evacuated during the original canal's construction, remain wary of such promises.

The project commenced with reforestation of a buffer zone that hugs either side of the 51-mile (82-kilometer) waterway. Together with more efficient water pumps, the new forests are designed to keep the canal's locks full and flowing without the need for new reservoirs—even in the driest of years, according to designers.

That's important because the canal watershed is Panama City's source of drinking water . Keeping the area's forests healthy is also vital, because of Panama's geographical importance as an isthmus linking North and South America.

As a corridor for migrating species of birds and animals, Panama's habitats are vital for species such as jaguars and eagles that depend on such pathways for survival.

Monster Ships

The new locks, expected to be completed by 2014—the canal's 100th anniversary—will allow so-called post-Panamax ships to transit the canal. Panamax is a maritime shipping standard that refers to ships that can fit through the canal's existing locks. But since the explosion of trade between Asia and the Americas, many carriers are using ships as much as 50 percent wider than Panamax vessels. These giant ships can carry 8,000 cargo containers each. Allowing such behemoths through the canal could double its annual capacity to more than 60 billion cubic feet (1.7 billion cubic meters) of cargo.

Post-Panamax vessels traveling from Asia must currently offload cargo at ports on the West Coast of the United States, such as Long Beach in California.

Goods such as Japanese cars and Korean televisions are then transported by rail across the U.S. and Canada. But by building a third lane, goods will arrive at East Coast ports in North America directly, lowering retail prices. Brazil and Venezuela—which are both increasing shipments of oil, grain, and other raw materials to China—are also banking on the expansion.

Technological Breakthrough

The canal's current locks dump about 50 million gallons (190 million liters) of water into the sea each time a boat passes through, said Jorge de la Guardia, who is supervising the construction of the expansion.

The centerpiece of the planned locks, however, will be new water-saving basins. According to de la Guardia, the basins will fill the lock chambers each time a post-Panamax vessel moves through using state-of-the art water-pumps.

"Sixty percent of the water used on each transit through the new locks will be reused," de la Guardia said. "We will actually use about 7 percent less water than we do with the locks today." "The remainder will eventually return to the sea, which will allow us to maintain more predictable water levels on the canal," he added. "This is a method using technology that's already been proven to work in Europe."

Low-Impact Plan

Panama's President, Martin Torrijos, has said the technology being added in the expansion means no reservoirs will be excavated to supply the new locks with water.

That announcement has calmed the fears of some farmers living near the canal, who have said they don't want to move. Today the area immediately beside the canal is a high-security area where no one is allowed to live. But 186,000 people reside on islands within the canal's wider expanses or on the banks of the surrounding basins, which contain two lakes, Gatun and Alhajuela, created by a dam farther north. Only a small number of people living in 20 buildings on the canal's property will have to move, said expansion overseer de la Guardia. That's because the level of Gatun Lake—a body of water that takes up about half of the canal's transit distance—will rise by a few feet after the widening is completed.

But many farmers and others, remembering that 50,000 people were evacuated during the building of the original canal, are more dubious about the benign effects of the construction project.

According to an article in the online newspaper Panama News, the Panamanian government has downplayed serious risks of saltwater contamination to Gatun Lake. And with construction still to begin, many officials are worried that budgetary mismanagement and government corruption will further complicate plans.

Helpful Forest

The new forest, meanwhile, will act as a sponge, storing rainfall during Panama's rainy season and slowly releasing it into the canal during the dry season, according to canal engineer Ilya Espino de Marotta. Smaller vegetation is also being planted along the canal's banks, Marotta said. "You need that vegetation because it holds the soil in place," she said. "If that soil gets washed away by rain, then you're going to have sedimentation flowing into the water and the amount of water in the canal is going to diminish," she added. "Deforestation has been a problem not just near the canal but countrywide. But we are monitoring the issue closely to keep both the water quantity and quality in check."

Working as Intended

Jefferson Hall, a forest ecologist at the Smithsonian Tropical Research Institute (STRI) in Panama, said engineers and hydrologists with the Panama Canal Authority "have done their homework." "There's plenty of water flowing through the canal watershed over the course of a year. The big issue is the dry season, especially during 'El Niño' years," Hall said. "In the past they've have had to impose draft restrictions where boat captains knew before they arrived in Panama that they had to carry less cargo."

Using projections and data already collected, Hall is now looking at how forests on the canal's banks might function once the new locks and a deeper Gatun Lake become reality.

"The question revolves around the so-called sponge effect. Do forests retain water in the soil, and do their roots and biodiversity in the soil improve filtration? And does that profile mean that water is slowly released into the canal during the dry season?" Hall asked. "Our evidence suggests that it does, but we need further study to be certain."

Hall's STRI colleague, Robert Stallard of the U.S. Geological Survey, studies a related issue. "Some researchers say areas that have been deforested should remain so—that the current hydrological function of the forest and adjacent grasslands and pastures should remain as it is," Stallard said. "While that issue is debated, we're recommending that cattle farmers working near the canal consider a switch to traditional agriculture as the canal expansion moves ahead." That would likely permit the soil to retain more water for both canal operations and Panama City's drinking water, Stallard said.

Pride of Panama

Max Newman heads the Canal Authority's tugboat operations. It's his job to ease ships through the canal's existing locks, often with mere inches to spare. He says the billion U.S. dollars of revenue generated each year will grow exponentially once "post-Panamax" ships—and their higher tolls—arrive.

After years of control by the U.S. leading up to Panama's assumption of full control of the waterway in 1999, Newman said, Panama has shown it can operate the canal efficiently and profitably. "We are more than capable of completing this project," Newman said. "If we don't move forward, we Panamanians will miss out on the revenue the new, bigger ships will bring into the country."

And what about the environmental impact of not widening the Panama Canal, he asked. "If we don't expand," he said, "imagine how many more gallons of gasoline will send out greenhouse gases as post-Panamax ships navigate around the entire landmass of South America."