Expansion of the Panama Canal Brings Opportunities and Dangers

On August 15th, the Panama Canal celebrates its 100th birthday with a ceremony at its Miraflores lock, followed by a Centennial Gala for 2,000 guests including representatives of the international shipping industry, owners, builders, insurers, operators and the like.

This event marks the culmination of more than a year’s worth of celebrations worthy of a feat of engineering that took 35 years to complete, and that still holds its own as the oldest of the “seven modern wonders of the world”, rubbing shoulders with the Channel Tunnel and the Golden Gate Bridge.

Regrettably, the intended centrepiece of the centennial – the unveiling of the expanded locks of the canal that will herald a new era for Panama – is not yet ready, nor is expected to be ready until June 2015.

The expansion of the canal was proposed in 2006, and began in September 2007, and was meant to be completed in time for the centenary. It has so far cost in the region of $6.5 billion, although the true final cost may never be known. The delay to this long-awaited project is due to suspiciously massive “cost over-runs” of up to 50% on cement contracts that have led to ugly stand-offs between the Panamanian government and contractors, with allegations of the “c” word flying about.

Doubtless the Panamanian authorities can dismiss such snags as ships passing in the night. And Panama has seen a few of those. From super-charged container ships via luxury yachts down to Richard Halliburton who swam the canal in 1928, Panama has borne more than one million transits in its time. The 48-mile passage across the Panamanian isthmus takes in two locks, a series of artificial lakes and the narrow Culebra Cut. The scenery either side of the canal represents some of the greatest biodiversity in the world.

Seeing images of container ships loaded up to the bridge nosing through dense primary jungle, one cannot help but be struck by the sheer precariousness of this tableau. What if a ship were to run aground and sink? What if terrorists were to blow up the dam holding back the man-made Gatun Lake that feeds fresh water into the canal’s locks? If this is the upside, what does the downside look like, and how bad could it get? What if someone simultaneously blew up a ship as it passed through Suez?

Presently, the largest ship that the locks of Panama can accommodate is 106 feet wide by 950 feet long. As of next June, the expanded locks will take ships up to 160 feet wide and 1,200 feet long. In terms of the sheer volumes of cargo that will be able to pass through Panama, this expansion represents a quantum leap. At present, the greatest number of containers that a ship can carry through is 4,600; any greater than that and the ship risks either getting stuck or running aground. Post-expansion, ships bearing 12,800 containers will be admitted, a near threefold increase.

The effect of this increased tonnage is already rippling across the Caribbean economies and being felt along the eastern seaboard of the US. The ports of Miami, New York, New Jersey, Norfolk and Baltimore are being dredged, expanded and upgraded. Real estate agents are preparing for a knock-on effect on local prices. Amazingly, even the normally sclerotic Cuban government has managed to galvanise itself to join with the Brazilian government to develop Mariel, Cuba’s main deep-water port, which will be operated by the Singaporean Port Authority.

However, the increase in tonnage that Panama will bear brings heightened security risks. If a ship were to run aground in the Canal, there is little anyone could do about it, other than loot the containers of iPads, smart phones and television sets, while weeping at the eco-devastation.

The job of threading these super-vessels harmlessly through the canal falls to the Panamanian Pilots Union. There are 285 pilots on the Panama Canal. Average age: 48. They’re responsible for ensuring safe passage of all vessels. As one pilot told me, “We are tasked with a job that requires us to be independent. We are solely responsible for the navigation of the ship, and we take precedence over the captain. We call the shots in every situation, and we keep the canal safe. Our job goes beyond that of an employer. If we see a dangerous situation that puts life or the environment in danger, we take action.”

The hours are long, and when pilots have to be lowered from a hovering helicopter aboard a container ship in rolling seas at the dead of night, we realise that the work is not without its physical challenges, bruises and occasional broken bone. Each transit of the canal takes between 20 and 30 hours. Each pilot will spend 10 hours on board before handing over.

“On a small ship, I’m on the bridge throughout the transit,” says one pilot, “It gets exhausting. But there are highlights. The other day, I took a luxury yacht through. I was sipping cappuccinos all night.”

Once the canal has expanded, the pilots will be plying ships twice the size and considerably heavier and less manipulable than at present. This presents certain challenges. “As the Costa Concordia has shown, a $500 million ship is so fragile that if it runs aground, it sinks,” says one pilot. If a pilot nods off at the wheel in Panama, the risks of environmental Armageddon are incalculable, never mind the potential effects that a stuck ship and concomitant congestion would have on the global supply chain. “So in order to take on bigger ship post-expansion, we decided we needed to retrain.”

At a glance, Port Revel in France is the least likely spot you’d expect to find Panama Canal pilots practising manoeuvres. This picturesque lake located high in the Alps lies 41 miles from Grenoble and nearly 200 miles from the nearest sea. It could hardly be more unlike Panama. Exxon founded Port Revel in the 1960s as a place to train captains how to navigate supertankers without ruining either the tanker or the environment. Conditions at Revel are almost entirely wind-free, thereby allowing accurate and controlled manoeuvring of 1:25 scale model ships.

Today, with its 11 model ships and its machines that generate artificial “challenges”, waves, currents and winds, Port Revel has evolved into one of the world’s centres for pilot training. It can replicate in miniature all the conditions that Mother Nature can throw at a ship, and is a place where pilots can hone their handling techniques and try out manoeuvres that would be impossible on real ships due to the risks and costs involved.

This is where the pilots of the Panama Canal came to do their training. They then identified the seven largest locks in the world, in Holland, Belgium, Bristol and France, which in their proportions are similar to the new locks at Panama, and ran computer simulations of navigations.

Meticulous and thorough as their profession demands, the pilots made a video of their training and took it to the Panamanian authorities, with a proposal for a schedule of training. The response: two fingers and a derisory $300,000 offer, peanuts when you consider that the fees for a single large ship to pass through the widened canal will be between $800,000 and $1million.

“The authorities basically told us to eff off,’” says one pilot. “$300,000 is a joke, compared to the $6.5 billion cost of expanding the canal. It’s not as if the canal authorities cannot afford it. The canal makes $1 billion profit a year, but no one knows where it goes. The ordinary people of Panama see nothing."

*Original story: Newsweek via Google News (search term: luxury yacht)
* Photo credits: Flickr/Lyn Gateley  Flickr/Lyn Gateley