New Panama Locks Opening Faces Three-Month Delay

The Panama Canal’s new locks will probably not be ready for their scheduled opening in October 2014, but will be ready for a trial run by a vessel in December, said Jorge Quijano, the engineer in charge of building the canal’s third set of locks.

The change in the opening date of the new locks is caused by the inability of the consortium that is building the new locks, Grupo Unidos por el Canal, to meet its contractual requirements for the concrete mix for the locks, which delayed the laying of the concrete from January until July of last year. The concrete has to last at least 100 years, but GUPC could not make concrete that met that standard until the canal authority brought in an outside expert to show them how to make it.

The Panama Canal Authority received a letter Tuesday from GUPC with a new schedule for completing the work specified in its $3.2 billion contract for the locks. The schedule indicated that it will not be able to complete all the work required by its contract until April 2015, six months behind the target date for the opening of the new locks in October 2014. But the new schedule includes work on such elements as parking lots and building that are not essential to the new locks, said Quijano, who will become the canal authority’s new administrator on Sept. 4, succeeding Alberto Aleman Zubieta.

Most industry observers had not expected the new locks to be in full commercial operation until 2015, but the three-month postponement of the target date for their opening is necessarily a disappointment for Zubieta, who has been saying all along that the locks would be ready in October 2014.

They will be ready for testing in October, but not for full operation. “The pre-commissioning tests of the locks will actually start taking place in February 2014, so that says that by that time the lock structure is complete,” Quijano said. This is a three-month delay from the previous scheduled date for lock completion of December 2013. 

Starting in February 2014, the canal authority will test the gates and all of their electro-mechanical capabilities. The flooding of the locks is now scheduled for Sept. 15. “After that we will begin testing with water, which can take up to three months,” Quijano said. “Those are the tests that determine whether we take money out of the payment (to GUPC).”

The canal authority has some leverage to make sure the locks are completed on schedule. Under its contract with the canal authority, GUPC faces contractual penalties of $300,000 per day if it cannot complete the locks on time, up to a maximum of $54 million. The GUPC consortium consists of Sacyr Vallehermoso of Spain, Impregilo of Italy, Jan De Nul of Luxembourg, and Constructora Urbana of Panama, which is known as CUSA.

In addition to penalties for not completing the locks on time, Quijano said, GUPC could also face penalties of up to $200 million if the locks fail to meet two tests. The first test involves the time needed for water to rise to the required levels, which is supposed to take either 10 or 17 minutes, depending on whether or not it uses the water-saving basins. “For every minute they don’t meet that we start deducting up to $100 million,” he said.

The second test involves the movement of the lock gates, which are supposed to be able to open and close within four and five minutes. “For every minute beyond five minutes, we start deducting up to $100 million.” 

Source: Journal of Commerce