Nine years after a project to expand the Panama Canal began construction, it’s done. And a couple of Denver-area CEOs are among the few personally invited to on the isthmus Sunday.
“We had 400 people involved in the project in seven offices in five continents,” said Alan J. Krause, CEO of in Broomfield, the lead technical design and engineering firm for the massive $5.25 billion project. “But of course you can’t have 400 people there. I am very honored to be invited to attend.”
Jacqueline Hinman, CEO of CH2M Hill is also planning to attend Sunday’s dedication. The Douglas County firm was Authority to manage the project.
Panama began construction on this third traffic lane, also referred to as the “Third Set of Locks,” in 2007. The two existing lanes, built 102 years ago, still work. But this new, wider canal enables massive ships known as post-Panamax to cut through the Americas instead of steering 10,000 miles past the southern tip of Chile.
For those just tuning in, Panama realized nearly two decades ago that it would lose business because the larger ships were too big to squeeze through the sea-vessel friendly, 50-mile, two-lane shortcut between the Pacific and Atlantic oceans.
The wider third lane will move cargo ships carrying up to 14,000 20-foot containers, compared to the previous limit of 4,600. But just like the original canal, this isn’t a simple passageway ships can sail. The canal consists of uneven waterways, including the man-made Gatun Lake. Ships move one at a time through a series of basins that must be filled with water or drained before a gate opens, and they can move to the next lock and back out to sea.
The expansion was the largest project MWH has ever worked on, Krause said. The enormity forced the company to innovate and create, for example, a system that uses less fresh water than the original. It also conserves 60 percent of the water. MWH designed a series of underground valves to get water to the basins quickly, but smoothly.
“We built the bathtub to fill very quickly but there can be no turbulence in the lock. These are big ships and they’re heavy. If there is turbulence, they would damage the canal,” Krause explained.
Panama also decided to go with one new lane instead of two and relied on MWH to figure out how to avoid delays when, for example, a gate needed repair. Fixing a gate in the old canal meant the lane was out of commission. MWH designed gates that act like pocket doors and slide out. Redundant gates were also added so if one needed repair, the backup would still function.The repair area is also built into where the gate retracts, allowing engineers to fix issues without impacting canal traffic flow.
“We see this as an iconic project,” Krause said. “It’s probably one of the largest heavy engineering projects in the water space.”
Krause said that MWH delivered on schedule. But completion of the overall project took nearly two years longer than expected. There is also debate on the budget, which was set at $5.25 billion. A New York Times report says that the main contracting consortium Grupo Unidos por el Canal is in disputed costs.
The delays inadvertently helped U.S. ports on the Atlantic Ocean gain business faster, said David Egan, real-estate firm CBRE’s head of industrial and logistics research for Americas. Before the expansion, West Coast ports received about 60 percent of the nation’s cargo business. But today, its share has declined to about 52 percent.
That’s because ports from Houston to New York invested in their facilities to accommodate larger ships. They were ready when a West Coast labor dispute in 2014 had cargo owners diverting goods to the East. Plus, American consumers now expect fast online delivery, which is forcing suppliers to get products closer to customers — “The eastern part of the county just has more people,” Egan said.
“It’s pretty clear the East Coast ports have captured a larger share. We expected this to happen because of the canal, but then it happened for other reasons,” Egan said. “The canal (expansion) is the cherry on top.”
Regardless, the canal expansion is a boon to Panama’s economy. Cargo en route to the East Coast has had to travel either in smaller ships, over land or air. “Surely much of that cargo will make the trip via the Panama Canal,” he said .
The third lock was just one of 35 projects CH2M managed for Panama authorities. It was also the largest, with a budget of $3.2 billion.
“The issues surrounding the major locks was always the project that gained the most attention,” said Terry Ruhl, CH2M’s transportation president, who also said CH2M’s role was to be an expert adviser to the canal authorities. “But some of the smaller projects — the building of dams, making sure the elevation of different lakes and rivers were managed — there really had to be coordination because you had to control the water in all 35 projects. For all the projects, you had to make sure there wasn’t an unplanned event (that would impact) a change in water levels elsewhere.”
Other canal projects CH2M managed included environmental mediation, relocating utilities, reforestation, clearing and, of course, dam construction.
CH2M had about 40 employees on site at one time. Ruhl himself would visit quarterly. But since most of the work wrapped up long ago, the company has eight employees in Panama today. Ruhl doesn’t plan to travel to Panama Sunday but he’ll .
“We see this as an opportunity for the (Panama Canal Authority) and the citizens of Panama to celebrate such a tremendous accomplishment,” Ruhl said. “This is a primary driver of their economy. This is something they’re proud of, and it’s so important to them. We’re not looking to take that spotlight. We’re just proud we were able to support them.”
As the new route opens for business, it can handle 95 percent of cargo ships out there. The other 5 percent, however, are too big. Krause said he thinks Panama authorities made the decision to exclude the largest ships because of cost and time. But next to the third lock, there is real estate for a future fourth lock.
“When they think about the next set of locks, we hope they think of us,” said Krause, whose “It’s already been in discussions. Just like the set of locks that open on Sunday. They started thinking about this some 20 years ago.”
