DOT chief Peters (below) discusses expansion work on Panama Canal (above) with officials.

Despite strong global competitive pressure for contracts on the $5.25-billion expansion of the Panama Canal, there’s enough work there and in nearby related development to draw U.S. firms into the action. The firms had an influential resource in their corner earlier this month when Transportation Secretary Mary E. Peters visited Panama City to talk with Panamanian officials—including President Martin Torrijos—survey the canal site and address a two-country transportation conference. But Peters and other officials also warned that U.S. ports, particularly in the southeast, face major upgrades to accommodate the huge vessels that will use the beefed-up waterway when work finishes in 2014.

Peters

“No transportation project is more important to our two economies than the plan to expand the Panama Canal,” Peters told attendees of ExpoTrans on May 7, the biennial gathering whose date was accelerated to accommodate the DOT chief’s visit. She pointed to historic ties between the U.S. and Panama and the Bush administration’s support of free-trade legislation with the nation.

Panamanian trade officials noted the     expansion’s huge projected ripple effect as the country aims to be a hub of Central and South American trade, transportation, energy production and telecommunications activity. Carmen Vergara, vice minister of commerce, highlighted expanded oil exploration in Panama, plans for a new gas pipeline to Colombia and two U.S.-financed refineries.

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The U.S. Trade and Development Agency gave a $330,000 grant to Panama’s maritime industry for U.S. security expertise that could jump-start up to $25 million in added surveillance investment. The agency also was set to award another grant to fund a U.S. consultant to advise Panama on its overall transportation strategy, USTDA officials said.

Alberto Alemán Zubieta, administrator of the Panama Canal Authority, known by its Spanish acronym ACP, noted growth in canal traffic. He said shippers have paid as much as $1 million for a coveted slot. In addition to the $3-billion design-build construction of new locks to handle huge “post-Panamax” ships, work will involve nearly 21 million cu meters of dredging and new technology to recycle 2 million gallons of water used daily in the canal’s basins.

Alemán

Alemán said the expansion’s program management contract would be awarded before September. He expects to begin design-build procurement “in the third quarter, with someone on board by mid 2008.” U.S. executives say PM hopefuls include Parsons Brinckerhoff, CH2M Hill, Washington Group International and URS Corp. paired with Moffat & Nichol. DB contenders include Bechtel and teams led by KBR and AECOM. But they will face stiff competitors from Japan, China, Germany, France, Brazil and Canada which subsidize contractors or offer tied aid. A U.S. source says the French even presented Alemán with its Legion of Honor medal. U.S. firms say Peters’ visit has helped. “It’s important for the U.S. to show interest at the government-to-government level,” says one.

But Alemán, Peters and U.S. officials voiced concern over America’s lessening maritime role and the need for more port investment. “U.S. ports are not focused on the impact of widening the canal,” said U.S Maritime Administrator Sean Connaughton. A conference of Panamanian and U.S. port officials is set for late summer or early fall in Tampa or Washington, D.C., to discuss the canal’s impact.