January 24, 2014
The Panama Canal’s cost overrun dispute may not only cause a halt in expansion, but give their competition a great advantage. Originally estimated at $5.2 billion, the overall cost to build is now up to $7 billion. Depending how long it take to solve this dispute, building on this century old waterway may come to a halt.
Nicaragua has set the construction of a shipping route from the Pacific Ocean to the Caribbean that will bring easier travel for bigger ships while Egypt’s Suez Canal has become a cheaper alternative for travel. With cheaper tolls and easier travel, the cost of Panama’s expansion might be in vain. Maersk Line, the world’s biggest container shipping company, has already deserted the Panama Canal in favor of the Suez Canal for its cheaper route. Along with these alternatives, other companies are using shipping ports in California and transitioning goods by train to decrease costs.
The construction of the Nicaragua shipping route is expected to begin this December and will take five years to complete. For more information about the Panama Canal, its competition and other news in construction, check out the January 2014 issue of Construction Headline News.