By: BN Americas
The Panama Canal expansion will boost the inter-oceanic corridor's capacity by 40% and consolidate the country's position as a north-south connection hub for the Western Hemisphere.
However, to fully exploit the expanded canal, scheduled to begin commercial operations in April 2016, Panama needs to invest in new port infrastructure and improve operations at its container terminals, according to the latest BNamericas Infrastructure Intelligence Series report.
"Moreover, Panama must continue to revamp its institutional framework to improve its position as a logistics center, which is highlighted by a lack of integration between the country's maritime infrastructure and land connectivity," the report says.
When construction finishes on its third set of locks, the canal will be able transport up to 550Mt of cargo annually, versus its present maximum capacity of 350Mt.
It will also be able to handle modern container ships of up to 14,000 TEUs, compared to the canal's current size limit of 5,000 TEUs, and provide passage for liquefied natural gas (LNG) carriers, most of which are too large for the canal at present.
In anticipation of the increased traffic, private port operators in Panama are increasing the capacity of their container terminals, while canal operator ACP is promoting the development of a transshipment container port on the Atlantic coast.
When all of these projects are complete, Panama should have capacity to handle 16.6mn TEUs per year, according to the report.
The administration of President Juan Carlos Varela is also putting together an institutional and legal framework for a master logistics development plan and has allocated US$109mn for public port infrastructure investments through 2019.
Faster-than-expected demand growth and reduced costs have led Panama to start evaluating the construction of a fourth set of locks, the report says.
"Obviously, the starting point will be what the demand studies tell us, and those will take us a year," said Oscar Bazán, VP of planning and business development for ACP.
The canal authority expects to re-evaluate its forecasts next year.
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