The $5.25 billion expansion of the Panama Canal is soon to be awarded to one of three international construction conglomerates, including one led by San Francisco-based Bechtel Corp., Mitsubishi Corp. and Hochtief Agand. The expansion, which will take at least five years to complete and may double the canal’s capacity, will go forward despite a projected 9 percent decrease in global shipping, a result of the global economic crisis.
La ampliación, as it is called in Panama, is already causing unease in southern California, where more than half a million jobs are tied to shipping with East Asia. At present, 70 percent of cargo from Asia is unloaded in California and distributed overland. Panama hopes to capture much of this trade through the expansion, which will accommodate ships capable of carrying three times more cargo than current capacity. In response, U.S. ports have already begun to announce investments in their own infrastructure.
To speed up the expansion, which was originally approved by voters in October 2006, the government will pay a $50 million bonus to the winning bidder if work is completed by 2014—the canal’s 100-year anniversary.