PMFORUM Breaking News

Reported by Antonello Bove in Washington, DC

The Panama Canal Authority (ACP) and the Inter American Development Bank (IDB) based in Washington DC, and four other international agencies have signed a US$2.3 billion loan for the expansion of the Panama Canal, the biggest ongoing infrastructure project in Latin America.

The event was presided over by Panamanian president Martín Torrijos and ACP manager Alberto Alemán (pictured). Representatives of the agencies participating in the financing are: Inter-American Development Bank (IDB), Andean Development Corporation (CAF),International Financial Corporation (ICF), the Japan Bank for International Cooperation (JBIC) and the European Investment Bank (EIB).

"Our loans to support the expansion of the canal are in line with our collective objectives of supporting economic growth, facilitate world trade, build infrastructure with a solid environmental focus and create employment opportunities," IDB president Luis Alberto Moreno said, speaking on behalf of all the lending agencies.

"It’s an uncommon opportunity to participate in a transaction that involves all these elements at the same time, and above all, with a scope that will bring benefits not only to Panama but to the entire region and beyond," Moreno added.

The IDB will contribute US$400 million of the US$2.3 million total financing of the expansion program.

The total cost of the expansion program has been estimated at approximately US$5.25 billion. The rest will be covered with resources generated by the operation of the canal, which annually serves around 5% of the global maritime freight.

"I am convinced that besides being a viable project from a necessary point of view to global trade and transcendental to Panama’s future, the expansion of the Canal will contribute to the economies in the region," Panamanian president Martín Torrejos said. "A more efficient Canal, capable of handling bigger ships and facilitate transits in less time will expedite the international trade that passes through it, especially from the Americas."

The Panama Canal, operative since 1914, is close to reaching its maximum capacity. The expansion works, scheduled to finish in 2014, will ensure its long-term competitiveness. The program has four principal components:

• Building a third set of floodgates, including two floodgates complexes and recycle tubs on both ends of the canal.


• Dredging the access channels in the Atlantic and the Pacific.


• Expansion and deepening of the existing navigation channels.


• Increase the maximum functioning level of the Gatún Lake that provides fresh water to the canal.

The current floodgates can accommodate container ships with a maximum capacity of 4,500 TEU (a metric unit of freight). The new floodgates, as big as four football fields, can be used for ships of up to 12,600 TEU. The new floodgates will use less water, since most of the flood will be recycled in the adjacent tubs.

During the construction phase, which started last year, the expansion program could create up to 7,000 direct jobs and 3,000 indirect ones. Once the works are concluded, the canal will generate more income for Panama and will maintain its status as a secure, efficient and trustworthy waterway for international maritime trade.

Panama's president stated that the Canal will generate enough wealth to transform Panama into a first world country. The president also announced that the canal will also help industrialize the country. The project is also expected to reduce poverty by about 30%, resulting in an 8% poverty rate in Panama afterwards. Two major contractors are the United States Army Corps of Engineers, an American federal agency specialized in public engineering, design and construction management and which built the existing Panama Canal, and a European consortium.

Antonello Bove International Correspondent Based in Washington, DC, USA   Antonello Bove is an International Correspondent for PMForum and PM World Today. Based in Washington, DC, Mr. Bove is also a Consultant for the Inter-American Investment Corporation (IIC), the private investment arm of the Inter-American Development Bank. At IIC, he is leader of the Italian Development Program, a program designed to strengthen European ties with Latin America and the Caribbean; he spends his time equally between Italy, Latin America and the USA. Antonello was previously CEO of Robur Corporation, a manufacturer and marketer of gas absorption air-conditioning technology based in Indiana. He was also previously a Partner at Proginvest in Rome, Italy, and a business development & government affairs manager at Iniziativa SpA (Milan-Rome, Italy), today Ernst & Young. He is a visiting professor at ABITA - Project Management University of Florence, Italy. Antonello is the author of the project management book, La metodologia dei 12 Step, published in Italy by Hoepli in 2008. Antonello has a degree in Economics and Business Administration from the University of Rome “La Sapienza” (1987) and is a graduate of the Executive Program on General Management from the University of Michigan (2002). A member of the “Italian Association of Journalists” since 1987, he is also a member of the Project Management Institute (PMI®sup>) and the American Management Association (AMA). Additional information about Antonello can be found at http://www.pmforum.org/pm%20forum%20team/index.htm. Antonello can be contacted at: antonellobove@aol.com.