The administrator of the Panama Canal Authority – refuting a statement earlier this week by his second in command – says the expanded waterway should be ready for inauguration in June, following delays costing the authority more than a half billion dollars in revenue.
In an exclusive interview with the American Journal of Transportation, Panama Canal Authority Administrator Jorge L. Quijano said today [Jan. 21] that the opening to traffic of the expanded canal will not be as late as “early the second part of this year,” as stated Jan. 18 by Francisco Miguez, the authority’s executive vice president of finance and administration of the Panama Canal Authority, at the SMC3 Jump Start 2016 conference in Atlanta and reported by AJOT.
“I apologize if that’s what he [Miguez] said,” Quijano told AJOT prior to speaking at an American Association of Port Authorities conference in Tampa. “Early May or late May, we should be functional, and maybe June for the inauguration. I firmly believe it’s achievable for us to have inauguration sometime in June.”
However, he added, “If there’s a hiccup in between, all bets are off.”
Quijano said efforts as recently as discussions the preceding day with the contractor have failed to elicit a specific completion date, commenting, “We are pushing him, and he is not giving us a date.”
Whenever the expanded waterway does open, it is clear it won’t be in August 2014, when it was scheduled to have coincided with the canal’s centennial, and the delays will come at considerable cost to the authority that Quijano estimated at half billion dollars.
“We are hurting the most out of this because we failed to have a completed locks system in time; it’s half a billion dollars that is affecting us from not being ready,” Quijana said, computing loss of business since August 2014 at between $900,000 and $1 million per day times between 400 and 500 days.
If one multiplies $1 million times the approximately 650 days between August 2014 and June 2016, the Panama Canal Authority’s revenue loss would equate to about $650 million.
Quijano said he would prefer to focus on what has been achieved through the $5.25 billion project, saying, “I think what’s important now is the almost nine years that are behind, what we have built in the last eight years and seven months.”
Quijano did confirm that, as stated earlier in the week by Miguez, ocean carrier companies will be incentivized to use the expanded canal extensively, and he furnished additional details.
According to Quijano, who termed the volume discounts as a “frequent transit system,” container lines will be able to get a discount of as much as 4 percent for significantly using the canal, with toll reductions based upon transits in the preceding 12-month period. He said that, in the case of containerships carrying cargo for multiple lines via alliances, the credit will go to the operator of the respective vessel.
Comprehensive coverage of AAPA’s Shifting International Trades Route Conference is slated to appear in the Feb. 8 edition of the American Journal of Transportation.
( Photo: Panama Canal Administrator Jorge L. Quijano tells AJOT that the expanded canal should be ready for inauguration in June.)
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