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ACP extends Panama Canal lock design deadline

Rainbow Nelson - Monday 7 July 2008

THE Panama Canal Authority (ACP) has extended the deadline for the submission of proposals for a new set of locks, which is the centrepiece of a $5.3bn expansion project. 

Four pre-qualified consortia will now have until December 10, 2008, to submit their ‘design-build’ proposals for the $2.7bn design and build contract. 

ACP said the four-month delay would not have any notable impact on the completion date for the entire project and that the step was made in response to requests from the consortia to extend the due date. 

The extra time, the authority said, would give them time to draw up more fully developed bids on both the technical and price proposals. ACP said the delay would “ultimately benefit the expansion project”. 

“The extension falls within our Expansion Program execution timeline, which has a projected completion date of 2014,” said ACP executive vice-president of engineering and program management Jorge Quijano. The ACP has already planned for such contingencies and other similar scenarios. 

Ten months into the project to widen the Canal, Mr Quijano said the expansion “remains on track”. Work started on the project in September last year. 

The ACP will evaluate bids for the locks on the ‘best value’ concept with emphasis on technical components (60%) and price (40%). 

The winner of this contract will design and build two lock complexes, which include water-saving basins that will allow the ACP to reuse 60% of the water of each lock transit when they enter service in 2014. 

The new locks - 427 m long, 55 m wide and 18.3 m deep - will allow 12,500 teu vessels, suezmax tankers and capesize bulkers to transit the waterway while using less water than the existing panamax-sized locks. 

Four major groups have been formed to battle it out for the meat in the sandwich of the expansion project. 

Consorcio C.A.N.A.L.; Consorcio Atlántico-Pacífico de Panamá; Consortia Bechtel, Taisei, Mitsubishi Corporation; and Consorcio Grupo Unidos por el Canal are comprised of companies from 13 countries.
With the lock proposal in place the ACP will then finalise the $2.3bn debt package required to cover the most capital-intensive years of the project, which are 2009-2011. 

Last week, the Panamanian National Assembly approved the ACP’s budget for fiscal year 2009. ACP has forecast revenues of $2.1bn next year, up 3.8% on the figures projected for 2008. 

ACP expects to earn $1.46bn in tolls, $432.6m in other maritime services and $179.2m in other incomes, including the sale of water and energy in fiscal year 2009. Another $37.7m is forecast in interest earned. 

Capital expenditure of $765.6m has been allocated for the expansion program for the same period and another $152m for improvements of the existing waterway. 

ACP’s contribution to the government coffers is set to rise by $86.5m in 2009. 

A total of $748.8m will be paid to the government, the owner of the waterway, with $398.3m in profits and $348.5m as part of the royalties paid per tonne of cargo handled.