Case 15: Panama Canal Expansion

The Panama Canal was opened in the year 1914. The project was instrumental in linking ship traffic between the Pacific and Atlantic Oceans. This man made canal consists of a system of artificial lakes, channels and locks and measures 50 miles long. More than 14,000 ships pass through the canal with 275 million tons of cargo in a given year. US is the final destination of approximately more than 70% of the canal’s containerized cargo. The American Society of Civil Engineers had ranked the Panama Canal as one of the seven wonders of the modern world. It often takes ships an average of 11.38 h to pass between the canal’s two locks. The expansion project involved the construction of two lock complexes—one on the Atlantic side and the other on the Pacific side. The expansion project involved the construction of a new shipping lane with three chambers which included three water saving basins. The Panama Canal expansion aims to effectively double the canal’s capacity by adding a new set of locks to accommodate larger container ships. The length of the canal was approximately 80.5 km. The expansion was expected to cost approximately $5.5 billion and the financing means was through a toll system along with foreign credit.