The Panama Canal Authority (ACP) has unveiled plans for a new reservoir to address chronic water shortages affecting the canal’s operations.

According to canal administrator Ricaurte Vásquez, this plan, just approved by the Supreme Court, is expected to take six years and cost between $1.2 billion and $1.6 billion.

A prolonged drought has severely restricted the canal’s water supply, forcing the ACP to reduce the number of daily transits to 31 from the usual 36-38.

The decline has disrupted global shipping routes, coinciding with other maritime challenges, such as increased risks in the Red Sea due to attacks by Yemen’s Houthi rebels.

The ACP has been planning the construction of an additional reservoir for several years to reduce these disruptions.

However, a 2006 regulation had previously restricted the canal’s extension beyond its usual watershed.

The court decision reinterprets the canal’s watershed boundaries, potentially allowing the ACP to proceed with its reservoir project in the Indio River Basin.

Vásquez emphasized that this new legal framework provides the canal with the territorial confidence it previously lacked.

However, before construction begins, the ACP must consult with around 12000 residents from 200 communities in the proposed reservoir area to get their approval and address any concerns.

Ilya Espino, assistant canal administrator, estimates that community consultations could last up to 1.5 years, followed by 3-4 years of construction.

The project, which includes a massive concrete-faced dam and a five-mile tunnel connecting the Indo River to Lake Gatun, intends to provide a consistent water supply even during dry periods.

Since 2001, the United States Army Corps of Engineers has been assisting with project planning.

Panama’s recent severe drought, the worst on record, highlighted the necessity for such infrastructure.

The lack of rainfall has depleted the watershed system that serves the canal and Panama City, home to nearly half of the country’s 4 million people.

Insufficient fresh water from Gatun Lake, crucial for operating the canal locks, has forced authorities to balance the water demands of local stakeholders with marine commerce.

The new reservoir is intended to increase the canal’s capacity, allowing it to take up to 15 more daily vessels, ensuring a continuous 36-vessel flow even during droughts.

Despite last year’s significant reduction in transits and draft limits for the Neopanamax locks, the canal gradually returns to regular operations as the rainy season progresses.

The ACP intends to boost daily transit to 35 by August 5.

This strategic development is an essential step toward future-proofing the Panama Canal against climate change, preserving the stability of a vital global trade route.

Reference: AP