Panama Canal tables plans for Corozal terminal

Published on Thursday,15 June 2017

A Panama Canal Authority plan to build a big new container terminal in Corozal near the Pacific entrance has foundered on legal challenges. Other terminals at both ends of the canal, however, are proceeding with expansions designed to handle the bigger neo-Panamax ships that are transiting the canal’s new locks.  

The canal authority put out a tender last fall for bids due by February on the long-planned new terminal it sought to build on the east bank of the canal at Corozal, which would have a capacity of 5.3 million TEU. The prequalified bidders — APM Terminals, PSA International, Terminal Link, and Terminal Investment Ltd. — were given until February to submit bids for the 20-year concession.  

“We put out a tender, but there have been no bidders,” canal administrator Jorge Quijano said. He said the four port operators refrained from bidding because of legal clouds hanging over the project, and because some had used investment funds to merge with or acquire other global terminals in the wake of the Hanjin Shipping bankruptcy last year.  

Quijano said Hutchison Port Holdings, which owns terminals in Balboa and Cristobal, saw the Corozal terminal as a competing project, “so they have been trying to withhold approval, and their lawyers have moved to block the project.”  

The canal authority is now reassessing the project and plans to start talking to other potential operators. “We closed the concession process, so now we can start talking to everyone. We are taking it easy to make sure we understand why bidders didn’t bid on it and what we can do in our proposals to attract bidders.”  

The agency plans to proceed with other projects to build a new logistics park and a new terminal for roll-on, roll-off (ro-ro) vessels next to the stalled container terminal at Corozal.  

The logistics park would be in a free trade zone on 635 acres on the west side of the canal that the US Army had used as an artillery range. The area has been cleared of unexploded ordnances and was a deposit site for the dredged material from the canal expansion.  

Quijano hopes the site will become a free trade zone where components imported from Asia could be assembled in bonded warehouses for re-export to other markets in North and South America. It could also serve as a logistics zone where containers could be assembled for transshipment throughout the hemisphere.  

“We expect to put both projects out for tender some time this year — the logistics park by year-end and the ro-ro project sooner,” Quijano said. “We have to sit down with our board to finalize the concept before we put out the tender.”  

Meanwhile, Panama’s existing container terminals are completing their own expansion projects. On the Atlantic entrance to the canal, Manzanillo International Terminal (MIT), which is owned by SSA, completed a $145 million expansion aimed at increasing capacity and accommodating the neo-Panamax vessels attracted by the new locks.  

Also on the Atlantic entrance, Evergreen’s Colon Container Terminal (CCT) invested $66 million in building a new fourth berth as part of its Phase 3 expansion, which will ultimately increase terminal capacity to 2.4 million TEU annually.  

Hutchison Port Holdings, which owns the Panama Ports terminal on the Pacific entrance to the canal, has "basically run out of space in Balboa so they can’t expand any more unless they go up, like they have in Hong Kong,” Quijano said. “I don’t think they are going to do that here.”  

At the seven-year-old PSA Panama terminal at the former Rodman Naval Base on the Pacific end of the canal, PSA is investing $200 million to more than triple the length of its berth to 3,740 feet from 1,115 feet, which will enable it to handle two neo-Panamax vessels and one Panamax vessel at the same time, and will boost annual capacity from 450,000 TEU to almost 2 million TEU. The project is expected to be finished by the third quarter of this year.  

“Evergreen is now seeing their neo-Panamax ships coming through the canal and stopping at CCT,” Quijano said. “MOL is stopping at MIT on the Atlantic side, and we see Maersk and [Mediterranean Shipping Co.] stopping on the Pacific with neo-Panamaxes several times a week.”

Source: http://www.joc.com/port-news/panama-canal-tables-plans-corozal-terminal_20170615.html