In October 2018, the Panamá Canal Authority gave notice that its lakes were ready for the possible arrival in early 2019 of the El Niño effect. El Niño is a climatic phenomenon associated with the warming and movement of ocean currents in the Pacific Ocean. In Central America the phenomenon can cause severe droughts.

The two lakes which supply the canal with water are Lakes Gatún and Alhajuela which at the end of 2018 were almost at their maximum capacity.

Experts predict that El Niño will not extend beyond the month of May in 2019 and that its effects will be light. The month of November generally marks the highest lake levels on account of the high levels of rainfall during October and November. May generally marks the end of the dry season in Panamá.

The Authority is sensitive to the levels of water and their effects on the Canal because in 2016, when the effects of El Niño were much stronger, they had to impose a limitation of vessel draught.

Around 6 per cent of world trade passes through the Canal and every time a boat passes through its locks, it requires 202,000 cubic meters of water.

A map and longitudinal section of the canal are shown as a separate item in the website immediately following this brief explanation.

News of the proposed Gran Canal went quiet over the last few months of 2016 and the first few months of 2017. It is open for debate and speculation whether this might be due to:

• The decline in the fortune of Wang Jing, owner of the HKND company which has the canal concession; or
• The Sandinista government’s stated policy that all the environmental impact analyses have to be finished before work can begin; or
• The Chinese government putting the project on hold as a reward to Panama for cutting off its links with Taiwan; or
• The current lack of attraction to international financial investment, made especially precarious because of Trump’s commitment to protectionism.

Which of these ‘theories’ holds any degree of truth I do not know, but later this year when more of the second series of environmental impact analyses are reported, we may gain a better understanding of the issues.

In the meantime, in April this year (2017) La Prensa (Managua) reported on an M&R poll of Nicaraguan attitudes to the canal project.

M&R poll: 71% still support the Canal

From: La Prensa (Managua) | By: Leonor Álvarez | 24/04/2017 | Translated by ENCA supporter Theodora Bradford

Approval of the Interoceanic Canal project has fallen since the project was announced in 2013, according to the results of a survey of 1,600 Nicaraguans, by M & R Consultants. The survey corresponds to the first quarter of this year. It was carried out face to face between the 17th of February and the 24th of April of this year, in the 15 departments and two autonomous regions of the country. It has an error margin of more or less 2.5 percent and a confidence level of 95 percent.

Since December 2013, when the pollster, led by Raúl Obregón, began to ask about the Canal project, disapproval has grown by 16.3 percent. In December 2013, disapproval was at 12.1 percent; in December 2014, 17.1; in June 2015, 21.4 percent; in December 2015, 17.4 percent; in March 2016 26.4 percent; in December 2016, 19.4 and in April 2017, 28.4 percent.

In the most recent poll, 63.4 percent of interviewees said they believed that the Canal project would go ahead if studies determined it to be feasible, while 31.9 percent responded that it was ‘unrealistic’ and that there would be no canal. Some 4.8 percent said they didn’t know or didn’t respond.

On the 22nd of April, campesinos mobilised against the Bill for the Interoceanic Canal (Law 840) called for a national march in Juigalpa, Chontales, that was obstructed by the National Police.

According to official information, the construction of the Canal would involve the investment of 50,000 million dollars to be completed in five years. Canal critics have pointed out that this would affect the natural reserves that stand in the way of the canal route and have also made the analysis that the concession law hands sovereignty over to the Chinese businessman.

John Perry

August 2017

For her recent trip to Nicaragua, Bianca Jagger probably didn’t pack her favourite shoes (Miu Miu boots with diamanté heels). She joined a protest march against the interoceanic canal planned to cross the south of the country, calling it ‘an insane project.’ Amnesty International claims Nicaragua’s government ‘secretly sold the country’s future to the highest bidder.’ The Guardian says the canal has ‘provoked a mix of anger, fear and defiance not witnessed since the civil war between the Sandinista government and US-backed Contra rebels ended in 1988.’ Global Witness has declared Nicaragua the world’s most dangerous place per capita for environmental activists. Francisca Ramírez, leader of the anti-canal protests, told them: ‘The only response we have had is the bullet.’ (Global Witness’s report mixes coverage of the canal protests with reports on deaths in land disputes in an entirely different part of Nicaragua.)

Despite being one of the poorest countries in Latin America, Nicaragua is also one of the safest. An opinion polls show more than 70% support for the canal. It would create 50,000 jobs in a country which will add over 350,000 to its working-age population in the next five years. Nicaragua’s growth rate is 4-5%, but the government believes it needs to be 8-10% if extreme poverty is to end.

The environmental challenges are enormous. They focus on the use of Lake Nicaragua as part of the canal’s route. It’s a large but shallow inland sea, which will have to be dredged to create a wide shipping channel, with uncertain effects on its ecology. On the other hand, the canal’s need to capture rainfall will require a massive tree-planting programme. The government argues that only the canal will provide the resources needed to protect the country’s vanishing forests. ERM, the British firm that did the environmental impact study, concludes that the project could ‘create lasting benefits for biodiversity.’

It’s also estimated that 30,000 people will lose their land (Amnesty says the real figure is 119,000). About 100 of these accompanied Jagger and Ramírez as they led the latest protest march. Organisers say it would have been bigger but for police holding up those intending to join in. Ramírez says her family is constantly threatened. Nevertheless, she’s managed to organise 91 marches so far, fully reported by the opposition media.

The irony is that the canal might never go ahead. It’s a direct competitor to the recently widened Panama Canal, 1,000 kilometres to the south-east. But it will be almost four times its length, requiring ships to lay up overnight or navigate in the dark. The transit costs will be a lot higher than the $450,000 a large ship might pay for a two-way crossing of Panama. The government says that HKND, the Chinese firm which holds the concession, is still carrying out 26 follow-up studies recommended by ERM, hence the delay. But the press in China thinks the project has already been ditched in favour of a massive new container port in Panama. None of the investors required to fund the $50 billion projected cost have yet been named.

The sudden international interest in a scheme that seems to be stalled is a mystery, and comes at a worrying time for Daniel Ortega’s government. Despite its excellent record on drugs and crime, it was excluded from the June conference on prosperity and security in Central America, addressed by the US vice-president. The US ambassador warns that sanctions are in prospect because of Ortega’s support for Nicolás Maduro in Venezuela, ignoring the fact that Venezuela funds many of the country’s anti-poverty programmes. In the US senate, the right-wing Ileana Ros-Lehtinen is sponsoring the NICA Act, which would oblige the US to oppose funding for Nicaragua by international institutions. Even though the US now provides very little direct aid, it would be forced to block international loans and even World Bank projects that improve access to health services and strengthen land rights. Vanity Fair says Bianca Jagger is devoted to social justice. The danger is that reports from international NGOs and their attendant hype encourage the Trump administration to take action that worsens social justice in Nicaragua, rather than imp

Early in 2017 the government of Panamá switched its political allegiance, or at least friendship, from Taiwan to China.

In June 2017, Global Construction News reported that a $1bn project to build a new deep-water port and container terminal near the Caribbean entrance to the Panama Canal has begun. Both its developer and the firm building it are Chinese.

This has given rise to further speculation on the fate of El Gran Canal, including the possibility that the Chinese government has terminated any notion that China will step in to cover the lack of investment in favour of the Nicaraguan canal and the decline in Wang Jing’s finances. (Wang Jing is the owner of the HKND company which has the canal concession.)

But keep watching this space ….. both in Nicaragua and Panamá …..

Lucy Goodman

November 2020

In the last year a number of articles have appeared in the international press expressing concern about the recently expanded Panama Canal. Lucy Goodman translated and summarised them for The Violence of Development website in the following article. (Lucy was one of the original research assistants who worked with Martin Mowforth in Central America on the production of the book ‘The Violence of Development’ published by Pluto Press in 2014.) We are grateful to Lucy for her time and effort on behalf of the website.

The Panama Canal is one of the great engineering achievements of the 20^th century. This watery bridge between the world’s two largest oceans facilitates around 6 per cent of world trade and permits the passage of more than 12,000 ships a year.

First opened in 1914, the Canal recently re-opened in 2016 after a US$5.5 billion expansion to accommodate modern cargo ships that outgrew the original infrastructure. The massive excavation project doubled the Canal’s carrying capacity by creating a second, larger traffic lane and constructing the ‘NeoPanamax’ locks at both Atlantic and Pacific ends; 70 feet wider and 18 feet deeper than their predecessors.

The government agency charged with managing, operating, and maintaining the infrastructure (Panama Canal Authority or ACP), called the expansion a “marvel and a game changer.” Recently, however, the Canal has experienced severe water shortages which have jeopardised its functionality.

The question is: how can a canal connected to two oceans be without water?

The answer is in the extraordinary expenditure of freshwater during the passage of each ship through the locks. The locks rely on an injection of water from artificial lakes. The main reservoir, El Gatún, covers more than 430 km² and provides precious drinking water to the densely populated surrounding area. Before the expansion, an average of 50 million gallons of water was spent (75 Olympic swimming pools) on each passing ship, at a rate of 35 ships a day. Despite the installation of the NeoPanamax locks and their water saving tanks, around 20 million gallons of freshwater is still used on every passing ship. The ACP pay close attention to lake levels and has been on high alert since El Gatún was “well below average” in 2019.

The historically low levels of late have largely been attributed to the global climate crisis. Panamanian hydrologist Cárdenas Castillero said 2019 was among the driest years Panama has seen, with a strong El Niño, and an increase in temperatures and rainfall variability. The Canal’s watershed recorded a 20 per cent rainfall reduction compared to historic averages, equating to the fifth driest year in seven decades. According to the ACP, the temperature in the watershed rose by 0.5 to 1.5°C which caused a 10 per cent increase in evaporation potential from Lakes Gatún and Alhajuela (another reservoir constructed in 1953 to supply the locks).

Carlos A. Vargas, Vice President of the ACP, stated “we’ve had an extraordinarily dry year and have implemented various methods to safeguard the water resource.”

In February 2020 the ACP reduced the daily quota of ships traversing the Canal and limited their draught, to reduce water consumption and ensure successful passage. A fixed tariff charge of up to US$10,000 was introduced to shipping companies for the freshwater they consumed on route across Panama. Another variable charge was introduced which considers the lake levels on the day of the ship’s crossing; the lower the level the higher the fee. As the rain deficits progressed, hydroelectric generation, via the Gatún dam, and hydraulic aid, which assists ships into the lock chambers, were both eliminated.

Panamanian meteorologists could not agree whether the drought would get better or worse at the start of this year’s rainy season, but by the beginning of May 2020 the ACP confirmed that water saving initiatives were having an effect and lake levels could permit larger draught vessels than had been tentatively planned for. The Canal authority states that the water consumption fees will remain in place until the ACP’s fiscal gains recover.

In early September 2020, the Canal Authority officially opened the multi-million-dollar tender to redesign the Canal’s water management system. The publication of the specification is a big step forward in securing the Canal’s water supply for the next 50 years amidst increasing climate variability and future uncertainty. Applicants are expected to submit a portfolio of projects to strengthen and optimize water management. Proposals and valuations should be presented in the final trimester of 2021 and the Canal Authority hope to identify the winning candidate by the end of next year.

Finally, in late September 2020, the result of recent rainfall and successful water management measures allowed vessels with a maximum draught of 50 feet to pass through the Canal, for the first time in 20 months.

Lack of rainfall in 2019 meant the maximum draught had been only 46-feet, until June this year when the Canal’s capacity progressively augmented. Each additional foot of water depth affords around 330 extra containers carried per ship. This favourably impacts the economy of scale and offers an all-round more profitable route.

At the end of the 2019 financial year, a record 450 million tons of cargo had passed between the two oceans and annual revenue reached US$3,365 million, the highest since 1914. The ACP now faces the substantial challenge of keeping the Canal operational whilst preventing contagion of COVID-19. Data from the last two months indicate that the number of ships crossing the Canal has only decreased from 35 ships per day to 34, and that the queue of ships waiting to transit remains at pre-coronavirus levels.

References:

• Por qué el Canal de Panamá se está quedando sin agua (y no tiene nada que ver con la pandemia de coronavirus) Por Lioman Lima – BBC News Mundo- 12 de Mayo de 2020.
• https://www.explica.co/the-reasons-why-the-panama-canal-is-running-out-of-water-and-has-nothing-to-do-with-the-coronavirus-prensa-libre/ (article translated from Prensa Libre –newspaper published in Guatemala City)
• Canal de Panamá abre millonaria licitación para sistema de gestión del agua- El Economista -7 de Septiembre de 2020.
• El Canal de Panamá ofrece su calado máximo por primera vez en 20 meses – El Economista -24 de Septiembre de 2020.
• https://www.dcvelocity.com/articles/30335-has-the-panama-canal-expansion-changed-anything Transportation Report: Has the Panama Canal expansion changed anything? Toby Gooley, December 20, 2018