Pratik Bijlani –
The Panama Canal is about to embark on a major infrastructural project to secure its future water supply and shipping capacity. Ricaurte Vasquez, Administrator of the Panama Canal Authority (ACP), has revealed plans to build a new $1.6 billion water reservoir near the Indio River basin, which is scheduled to be completed in six years. This new reservoir will allow up to 40 ships to pass through each day, addressing the current issues caused by insufficient rainfall.
The Panama Canal watershed is critical for both Canal operations and freshwater supply to Panama City, has seen shifting weather patterns, resulting in lower-than-average rainfall and harsh weather conditions. These changes have had a considerable impact on the water levels in Gatun and Alhajuela Lakes, which are critical to the Canal’s lock system. In recent years, the watershed has had six out of 10 years of below-average rainfall, including 2019, which was the sixth driest year in 70 years.
To address these issues, the ACP announced a number of water-saving measures in February 2020, including the imposition of a freshwater tax. These efforts have been critical in keeping operational water levels stable, allowing the Canal to maintain draft levels above 13.72 metres (45 feet) during the dry season and up to 15.24 metres (50 feet) in 2021, the maximum level permitted. These improvements have safeguarded the Canal’s resilience to future climatic variability while also maintaining its competitiveness and significance in global shipping.
The new reservoir project, which is expected to cost $1.2 billion, will be supplemented by $400 million in investments in neighbouring villages, improving water security even more. The proposal requires consent from around 12,000 people of 200 villages near the Indio River basin. Once completed, this reservoir will connect to the current network of artificial lakes, ensuring a minimum of 36 transits per day and supporting up to 40 transits, increasing the Canal’s capacity.
Recent rainfall increases have helped the Canal recover from last year’s extreme drought, the worst on record, which led authorities to cut transit times in half. As the rainy season comes, the Canal gradually resumes operations, highlighting the need of sustainable water management in sustaining its position as the world’s second-largest canal.
To summarise, the new reservoir project is a key investment in the Panama Canal’s future, maintaining dependable water supply and supporting the worldwide maritime sector. By tackling the problems of climate unpredictability, the Canal maintains its operational resilience and competitive advantage.
Marex Media