Panama Canal Authority Looks at Third Lock

PANAMA CITY, PANAMA-In a move that will have substantial impact on the fortunes of real estate around various US ports, the Panama Canal Authority has opened the bids from a trio of engineering and contracting company consortia to build a third set of locks on the Panama Canal. Though the final decision has yet to be made, the authority announced that the “best value” bid came from Consortium Grupo Unidos por el Canal composed of Madrid-based Sacyr Vallehermoso SA, Milan-based Impregilo SpA, Luxembourg-based Jan De Nul nv and Panama City-based Constructora Urbana SA.

The authority has budgeted $5.25 to build the new lock and set a maximum price of $3.48 billion for the engineering work. Consortium Grupo Unidos’ bid came in at approximately $3.12 billion. The authority’s maximum price was not revealed to the bidders ahead of submissions. The other two consortia submitted bids of $4.19 billion and $5.98 billion.

The prospect of a third lock has already spurred expansion at several East Coast and Gulf Coast ports, which stand to benefit form the canal’s increased capacity. The new lock will allow passage of the new generation of super-sized freighters, which at this point cannot go through the canal. Today these ships have no choice but to unload their cargo at ports along the US, Canadian and Mexican west coasts, even if the merchandise is destined for points east of the Mississippi River. That means the cargo must be loaded on trucks or trains for cross-continental delivery. The new lock, which is slated to open in 2014, would enable super-freighters to carry the cargo closer to its ultimate destination by docking in Houston, Miami, Savannah, Charleston, SC and other more easterly ports.