The third set of Panama Canal locks aren’t even completed yet, and yet Panama wants a fourth set of locks to handle even bigger ships. What about the idea of the whole brand new canal in nearby Nicaragua? Guess who is “interested” in both the new canal and the 4th set at Panama? CHINA!
The Panama Canal announced on Friday that its administrator, Jorge L. Quijano, “held an informative meeting” with a delegation headed by Mo Wenhe, chairman of the China Harbour Engineering Company (CHEC) and Wei Hua Wang, a representative of the Chinese-Panamanian Office of Business Development.
In the Panama Canal release, Mo showed interest in the development of projects in the Panama Canal during the upcoming years. In particular, Mo said, “We are exploring our participation in all canal projects, especially in the design, construction and financing of a fourth set of locks.”
The release said CHEC is a leading full-service provider of engineering-procurement-construction, build-operate-transfer and public-private-partnership projects for the public and private sectors. Currently, it said, CHEC is present in more than 80 countries, including Panama where it will be setting up its regional headquarters. Last June, then Honduras President Porfirio Lobo signed a memorandum of understanding with CHEC to build a multibillion interoceanic railroad including up to 10 rail lines.
But by the time the third set locks open in 2016, shipping companies will have taken delivery of new ships of all kinds that are too large to fit into the new locks.
For many years, Panama Canal traffic grew even though its locks were increasingly out of date, given growth in ship sizes. The largest ship that can currently transit the Panama Canal is roughly 5,000 TEUs, while 18,000-TEU ships are now in service and ships larger than 19,000 TEUs are being built. Thus, it is arguably a change in approach that the Panama Canal is already showing impatience with the idea that the third set of locks, which will be able to accommodate 98 percent of the world container fleet by 2018, may not be large enough. The new factor may be Nicaragua, whose controversial $40 billion China-backed canal proposal has received a series of endorsements and government approvals, most recently from a Nicaraguan government committee that in July approved the proposed route for the canal.