From NYT Dealbook:
A RISKY BET ON THE PANAMA CANAL The Panama Canal’s new locks will be on display this weekend, when heads of state congregate to see a Chinese container ship become the first commercial vessel to make the passage from the Atlantic to the Pacific.
But when the celebrations end, the future of the expanded canal will be cloudy at best, its safety, quality of construction and economic viability in doubt, Walt Bogdanich, Jacqueline Williams and Ana Graciela Méndez report in The New York Times.
A new canal needs enough water, durable concrete and locks big enough to safely accommodate larger ships. A Times investigation has found that the Panama Canal fails on all three counts.
The low bid for the project – a billion dollars less than the nearest competitor’s – made it precarious from the outset, according to a confidential analysis commissioned by the insurer for the four-nation consortium that built the new locks. “This is a high-risk situation,”wrote the analysts from Hill International in 2010.
As the project developed, it was mired in infighting, political firestorms and severe concerns about its physical structure.
The canal has made Panama, a country with few natural resources, crucial to global economics. It became a major banking, trading and airline hub, not to mention a transit zone for drug dealing and money laundering.
The consequences will be wide-ranging if the canal does not deliver. American grain and soybean farmers and producers of liquefied natural gas may find it harder to sell to Asian customers. Asian manufacturers may forsake the struggling ports on America’s East Coast, or they, and ultimately consumers, will shoulder the added cost of going the long way round, through the Suez Canal.
The canal’s success may also be undercut by the slowdown in global trade, especially from China.
Read The Times investigation into the problems that struck the $3.1 billion expansion project here.