Posted on September 23, 2024
The Panama Canal Authority (ACP) has proposed a US$1.6bn project to dam the Indio River in a bid to reduce the impact of future droughts, FreightWaves wrote.
The Panama Canal connects 180 maritime routes that reach 1,920 ports in 170 countries around the world, through which nearly 3% of global maritime trade passes, according to the ACP.
Key trade routes connected by the Panama Canal include shipments between the US East Coast and Asia and between Europe and South America.
Last year, after the canal experienced its worst drought since 1950, water levels dropped to their lowest point in January and restrictions on the number of daily transits were introduced, the 26 August report said.
By 1 February, transits had been reduced to 18/day from the typical 36/day.
The proposed Rio Indio Reservoir project would involve damming the river and drilling an 8km (5 mile) mountain tunnel to connect the newly constructed reservior to Gatun Lake, which supplies water to the canal, FreightWaves wrote.
The project, which could take five years or more to complete, could allow up to 15 additional ship transits/day through the canal, the report said.
However, the project had faced criticism from local farmers and communities whose land risked being flooded by the construction of the reservoir, FreightWaves wrote.
During a roundtable discussion with the media and stakeholders on 26 August to mark the waterway’s 110th anniversary and examine its future, ACP administrator Ricaurte Vasquez said while the Rio Indio project was a major initiative for the agency, it was also looking for other ways to handle future droughts.
“We are trying to avoid a one-line type of solution; we are trying to look into a portfolio of alternatives. Some of them are operational,” Vasquez was quoted as saying.
“We are addressing those including dredging, moving water intakes to a different location, taking control of water salinity and Gatun Lake.”
At the time of the report, increased rainfall in the region had allowed the Panama Canal to increase transit slots back up to 36/day from this month, the report said.
The canal’s move to 50ft (15.24m) of draft would allow Neopanamax container ships to travel through the waterway, Vasquez added.
Neopanamax ships hauling commodities such as liquefied natural gas and grains had been forced to use other routes during parts of 2023 and earlier this year due to the reduced draft.
Vasquez said LNG and grain ships were expected to return to the canal now that water levels were returning to normal.
