Panama’s vice president and foreign minister, Isabel de Saint Malo de Alvarado, has fuelled doubts over the viability of the Nicaragua Canal project, claiming further Panama Canal expansions would be more cost effective.
Speaking at the London School of Economics, she said: “We could build a third, fourth, fifth expansion at a cost much much lower than it would cost to build a canal in Nicaragua.”
“World trade is growing,” she stated. “We are not concerned in Panama of the possibility of some competition. But if it happens, we are making sure we will remain competitive.”
In March 2015, Jorge Quijano, CEO of the Panama Canal Authority, told Reuters that a fourth set of locks could cost between US$16bn and US$17bn; meanwhile the Nicaragua Canal is widely expected to cost at least US$50bn.
Asked by CM about whether plans existed for further works to enable the canal to handle ultra-large container vessels (ULCVs), Alvarado said: “We’ve actually begun studies about a new expansion. Fortunately enough the canal has both a technical capacity and a financial capacity to undergo future changes if need be. But for now, I think we’ll have more than enough in terms of what the expanded canal will offer.”
The expanded Panama Canal is scheduled to be inaugurated in June 2016, more than 18 months later than initially planned, following various difficulties including leakages of the new third locks.
In mid-February 2016, Grupo Unidos por el Canal (GUPC), the consortium responsible for the design and construction of the canal’s third set of locks, successfully completed testing of the reinforcements in the third sill of the Cocolí locks.
Seepage had been detected in these locks in August 2015, forcing delays to the already-postponed opening of the expansion.
At the event, Alvarado promoted Panama’s attractiveness to foreign investment, stating: “Panama was a global economy before globalisation was in fashion.”