By Michael McDonald and Naureen S. Malik
(Bloomberg) — The expansion of the Panama Canal, a $5.3 billion project almost two years behind schedule and plagued by cost overruns and contractor disputes, will open on June 26, Canal Authority Administrator Jorge Quijano said on Wednesday.
Contractors building the new locks, which will allow bigger ships to pass through the 102-year-old waterway, will complete works on May 31.
“The date is very close and there is still a lot of work to do,” Quijano said Wednesday during the inauguration of a new canal training center. “We can’t lose face.”
The Panama Canal Authority has resolved problems associated with contractors and seepage from the new locks discovered during testing, said Jose Ramon Arango, senior international trade specialist at the agency that operates the 50-mile (77-kilometer) waterway connecting the Atlantic Ocean to the Pacific Ocean. The authority is planning a test of the new locks with a tanker in May, he said at a shipping conference in Stamford, Connecticut on Tuesday.
The expansion may shift international trade routes, allowing ships to reach Asia from the U.S. Gulf Coast more than two weeks faster than they would going east through the Suez Canal. It’ll make room for vessels with the capacity to carry 12,600 containers, almost three times what the existing locks permit, and will be able to handle tankers carrying liquefied natural gas.
Shipments through the canal may rise to 360 million tons in 2017 following the project’s completion, after reaching a record 340.8 million tons in the fiscal year ended Sept. 30, the authority said in October. The expansion has spurred a series of port and infrastructure upgrades throughout the Caribbean and the U.S. East Coast as docks make room for bigger vessels.
The project was 97 percent complete as of Tuesday, with testing, with the construction of minor structures accounting for the remaining 3 percent, Arango said.
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