International Business

Q&A: Jorge Quijano pushes Panama Canal expansion toward finish line

The SS Ancon leaves the upper locks at Gatun on the first official transit of the Panama Canal in 1914. The first vessel to transit the expanded canal will be determined by an auction.
The SS Ancon leaves the upper locks at Gatun on the first official transit of the Panama Canal in 1914. The first vessel to transit the expanded canal will be determined by an auction. xxx

The expansion of the Panama Canal, which will be completed next year, is expected to play a big role in PortMiami’s growth plans.

As part of a three-pronged strategy to position itself for the future, PortMiami has built a new port tunnel to speed truck traffic, completed an on-port rail link that connects to the Florida East Coast Railway yard near the airport and deepened and widened its shipping channel to accommodate larger ships that will transit the expanded canal.

Port Director Juan Kuryla and port users keep close tabs on the progress of the canal’s expansion, which includes larger locks on both the Atlantic and Pacific sides, access channels large enough to accommodate Post-Panamax ships and other improvements along the length of the canal. The new lanes will operate in tandem with the current locks, which will continue to handle smaller ships.

Last week, Panama Canal Administrator Jorge L. Quijano was in Miami to update executives from the port, shipping lines, terminal operators and officials from FEC Railway on the expansion and to see how Miami-Dade is preparing to handle the bigger ships that will cross the expanded canal.

“Once the canal is expanded, PortMiami will be the only port south of Virginia that can take in the big ships,” said James R. Hertwig, FEC president and chief executive.

Other East Coast ports, including Port Everglades, hope to dredge and make improvements so they can handle bigger post-Panamax ships, but PortMiami executives figure they have a four to six-year head-start on them because most still have environmental and other hurdles to overcome before dredging projects can begin.

Kuryla said he has been visiting shipping lines in Asia and Europe to let them know Miami is already big-ship ready and to pique their interest in using PortMiami as a first port of call after their post-Panamax vessels transit the canal.

“Three years ago there was some skepticism among the shipping lines, but now there’s tremendous interest in shipping through Miami,” said Kuryla.

Because it’s expensive for big ships to come into port, they want to make as few stops as possible and it would be a big deal if the vessels made their first calls in PortMiami, rather than steam on to other ports along the East Coast.

PortMiami has already begun to receive its first big ships. On Nov. 5, the MSC Methoni, which had a 41-foot draft, called at the port. Before the dredge, which deepened the shipping channel from 44 feet to 50-52 feet, that would have been too close for comfort, said Kuryla.

Quijano answered Miami Herald questions before a tour of the port and a train ride that took him from PortMiami to FEC’s rail yard in Hialeah.

Q. At the end of October, the canal expansion was 95 percent complete. What remains to be done?

A. We’re still working on some of the aids to navigation along the canal, but they should be finished very soon. Mainly it is work on the locks that remains. In September we finished the access channel that goes from the new Pacific locks to Culebra Cut. We’ve also been testing the dam [that separates the access channel from Gatún Lake.] For the past two weeks the water in the dam has been at its highest level. Next we’ll start draining the water back into Gatún Lake [part of the canal] and remove a plug. That should take about two months.

There’s also a lot of electro-mechanical work to be done and correction of a design problem on six of the eight sills in the new lock complexes. [During testing, water seepage was detected in a concrete sill between the upper and middle lock chambers on the new Pacific locks]. That should be finished in mid-January and then we’ll retest it. In January, we’ll determine the most likely date or range of dates for inauguration of the expanded canal.

Q. Do you still expect that the inauguration of the expansion will be in April?

A. We haven’t changed the April date, but it’s not going to be April 1. We still need additional information from our contractor — mainly because of the repairs on the leakages that aren’t expected to be finished until Jan. 15. We’ll look at all the rest of the work that remains to be done to determine exactly when in April we’ll be open.

There’s always the possibility that it might not be April, but it shouldn’t be too much beyond that.

Q. Last year a billion-dollar dispute between the Panama Canal Authority and Grupos Unidos por el Canal, a consortium of international construction companies that is the main contractor on the $5.25 billion expansion, over cost overruns stopped work on the project for two weeks. [It was decided that the dispute would be heard claim by claim by an arbitration tribunal meeting in Miami.] What is the status of that arbitration?

A. The first claim is going to arbitration in Miami this month. Everyone meets with the three arbitrators, presents their positions and then it takes several months before they actually give the results.

This claim deals with the construction of the coffer dam for the new Pacific locks. They claim the geology is not what they expected. They say the original cost of $120 million has continued to grow to $217 million. This is a design-build project. We did not give them the design. They were supposed to do some additional work [field explorations] before they actually put in their bid.

The argument from our side is this has no merit, and from their side, the argument is that it cost them more money and they didn’t expect it to be as difficult as it was. But we’ve continued to work on the project to get it finished.

Q. In 1914, the SS Ancon was the first ship to officially transit the Panama Canal. Who will be getting the honor for the historic first transit of the expanded canal, using the bigger locks?

A. It’s going to be an auction that will determine the first ship to make the passage. We’ve had so many requests from our customers, and all our customers are good customers. It’s difficult for us to pick. I expect the auction will be a month before the inauguration of the expansion.

I will not be aboard that first ship. There’s a lot of history associated with the first transit. In 1914, the president of Panama was aboard the SS Ancon with other dignitaries from what at the time was the U.S. Canal Zone. On the ground were the people who worked on construction of the Panama Canal. Since I worked on construction of the expansion, I want to be on the ground, too.

Q. There is a lot of talk about Panama building a fourth set of locks to handle ships that are already too big for the new locks in the canal expansion. What’s the status of this?

A. There is a lot of talk about a fourth set of locks. It’s a normal progression, but there are lots of other things we need to do first to take full advantage of the expanded Panama Canal over the next 10 years. Demand will say when we need to consider a fourth set of locks, but at this point, it’s not in our immediate plans.

Jorge Quijano

Position: Chief executive of the Panama Canal Authority

Career: Began his career at Texaco Oil Refinery Panama. Went to work at the Panama Canal in 1975 when it was still controlled by the United States. Climbed the management ladder, becoming maritime operations director in 1999 when the canal shifted to Panamanian control. Was executive vice president of engineering and programs management at the canal authority before being promoted to top administrator in 2012. Has been overseeing the canal expansion project since 2006.

Education: Engineering graduate of Lamar University in Beaumont, Texas; master’s degree in industrial engineering from Lamar; advanced management courses.

Personal: Panama City native, married with two children.