Since the discovery of the Pacific coast of Panama, visionaries dreamed of one day creating a great passageway from the Atlantic to the Pacific, thus avoiding the 12,000-mile journey around the tip of South America. That day finally came in August of 1914, after decades of planning and excavation. Although only 40 miles from shoreline to shoreline, the ingenuity and tenacity of the canal's creators are evident with each and every movement of this magnificent lake-and-lock-type canal. It's bound to be a voyage you will never forget.

The Panama Canal extends approximately 80 km. (50 miles) from Panama City on the Pacific Ocean to Colon on the Caribbean Sea. It is widely considered to be one of the world's great engineering achievements. The United States is the largest user of the Canal in terms of cargo tonnage, as either port of origin or destination, although Asian countries are beginning to close the gap. About 12% of U.S. sea-borne international trade, in terms of tonnage, passes through the Canal annually. Ships bound for Japan from the East Coast of the United States save about 3,000 miles by going through the Canal; ships sailing from Ecuador to Europe save about 5,000 miles.

The canal rapidly becomes the dynamic driving axis of the logistics development of our country where an average of 14,000 ships transit through it annually by way of 144 routes to more than 80 countries worldwide, moving 12 million TEU’s and 300 thousand CPSUAB [Panama Canal Universal Ship Gauging System] per year.

Fifty (50) million gallons of fresh water are needed to float one ship through the Canal and all of it is supplied free of charge by forests on the surrounding hillsides, which capture the abundant tropical rains and feed the Canal with rivers.

Since its inauguration in 1914 up to September of 2010 more than one million high draft ships have transited the waterway. Also impressive is the enormous amount of cargo that has transited the Panama Canal during these 96 years, summing up all the transits, the latter results in 9,000 million large tons of cargo.

On 22 October 2006 the citizens of Panama voted to expand the Panama Canal to allow for more transits and bigger ships. The Panama Canal Authority has started to execute the project and is following a comprehensive plan that will take eight years to complete at a cost of $5.25 billion dollars. While this is a subject of tremendous importance to the Republic of Panama and its people, the international maritime industry will benefit directly from the expansion through lower shipping costs, and global consumers will eventually benefit from the greater capacity and efficiency of the Panama Canal. To April 2011 the project to expand the Panama Canal has advanced by some 20%, and contracts worth a total of more than $4 billion dollars have been awarded according to the Panama Canal Authority (ACP).

Treaties

In 1903, the Republic of Panama and the United States signed the original Panama Canal Treaty, which allowed the United States to build and operate a canal connecting the Pacific Ocean with the Caribbean Sea through the Isthmus of Panama. The Treaty granted the United States the use, occupation, and control of a Canal Zone, approximately 10 miles wide, in which the United States possessed full sovereign rights. In return, the United States guaranteed the independence of Panama and paid the government of Panama $10 million, as well as an annuity of $250,000, which each year increased at a rate far beyond that of inflation.

On September 7, 1977, a new Panama Canal Treaty was signed by President Torrijos of Panama and President Carter of the United States that transferred full control of the Canal to Panama on December 31, 1999. Under this Treaty, the Panama Canal Company, the Canal Zone, and its government were disenfranchised on October 1, 1979, and replaced by the Panama Canal Commission that operated the Canal during the 20-year transition period that began with the Treaty. The Panama Canal Commission has now been replaced by a new Panamanian entity, the Panama Canal Authority. The treaty guarantees permanent neutrality of the Canal. Control over U.S. military facilities in the former Panama Canal Zone has reverted to Panamanian authority. The U.S. Southern Command and U.S. Army South troops moved out of Panama at the end of 1999.

Panama Canal Developments

The Canal itself is undergoing a modernization and maintenance program of up to $1 billion, which includes finishing of the widening of Gaillard Cut as well as improvement of the locomotives (mulas) used to guide the ships through the locks, the docks, the tugs and all the machinery of the Canal operation. In addition, the Panama Canal Authority has announced preparations for constructing a third set of locks. A multi-phase program includes building additional water reservoirs to increase water availability both for the Canal and the terminal cities; dredging the entrances to the Canal to allow the entrance of larger ships to the ports; similarly deepening Gaillard Cut and Gatun Lake; building the new locks and constructing two bridges over the next ten years.

Ports and Railroad

Additionally, Panama's ports are expanding their container transshipment capacity. Manzanillo International Terminal completed a $100 million expansion program, the port of Balboa is finishing a $130 million expansion program, and another $200 million phase three program. The Evergreen port at Colon will enter a second phase of expansion and a new port on the Pacific side, will be defined. The large container ports, the bulk terminals, the cruise and the fuel storage parks are located on both sides of the oceanic region, for all these activities are related to the Canal.

All this activity will allow Panama to transship over 5.7 million containers per year around year 2011 and continue growing over the years making Panama the No.1 container transshipment center in Latin America.

Together with the ports, the restored railroad by Kansas City Southern Railways already operational connect the ports creating a land bridge to complement the Canal. A 1.6% growth recorded the movement of containers by rail, compared figures for the period 2009-2010. Panamá Canal Railway Company in 2009, 9 million was allocated for maintenance and expansion projects. By 2011 it will invest $ 15 million for road expansion projects, expand terminals, improving signal systems, among others.

This port and railroad activity will require additional services from the local economy such as financing, insurance, specialized maintenance and repair, electricity and water, telecommunications, trained manpower and other services, and it will create new business opportunities for logistics and cargo industries.

Investment Opportunities

Some of the multi-million dollar investment opportunities include:

• The development of major intermodal transportation and logistics centers at Colon and at the Howard/Farfan complex on the Pacific, including the construction of a new container port at Farfan.
• Ship owners services, servicing of vessels, ship repair and maintenance, container repair, intermodal cargo services.

• The future construction of the third set of locks, which will include the necessity for additional water resources, expanded hydroelectric power generation, the expansion of the entrances to the Canal and the deepening of Gatun Lake and Culebra Cut.

• Plans to expand the Panama Canal will be developed until 2014.

• Provision of concessionary services to the ports (power, water, fuel, material, food, banking services, telecommunications, maintenance and repair, dredging) estimated at between $47 and $60 million annually).

• Services to passengers and crewmembers transiting the Canal, which in 2010 numbered 298,340 and 2,221,401 respectively.

• Rodman and Farfán are identified as potential centers of port development

• The relocation of approximately 8 to 10 thousand persons, as a result of Canal expansion, requiring housing and infrastructure.

• Cruise ship reception and tourism.

• Panamanian ports are a good option for investment by the inherent advantages that characterize and collateral, including:

•  Facilities for loading and unloading.
•  Warehousing, transshipment.
•  Consolidation.
•  Storage and distribution of loose cargo.
•  repair and storage containers.
•  Secure the load.
•  Cleaning and repair of containers.
•  Port management, financial and cruises.
•  Management of container terminals and processing zones.
•  Letters of Credit, through expert loading draft.
• Others

In terms of related air transport opportunities, Tocumen International Airport should be developed as an international and regional hub for both passenger traffic and cargo. The redevelopment of the Tocumen International Airport wills double the number of passengers transiting through the airport annually from the current 4.7 to 10 million.
the former Howard airforce base should become an aviation industrial center, making use of its modern airport facilities; and construction of the cargo airport at France Field in the Atlantic must be completed.

Howard Project

Panama Pacifico, a mixed-use, business, residential and recreational center, will be created over 40 years by renowned developer London & Regional Panama in conjunction with the government of Panama. For those expanding business overseas, retiring in Latin America or simply visiting this beautiful locale, our sustainable, mixed-use business center and residential hub provides a balance of world-class amenities, infrastructure and services.

The project is divided into industrial and commercial sector, including international business park and corporate center, which will have more than 300,000 square meters of warehouses. Also includes an airport and the residential area, which is the heart of this development, which will include commercial, office and three hotels (one green, one executive and a luxury).

At the end of this year is estimated to be completed investment of the first $ 150 million, by 2015 the company will have invested $ 400 million, according to the schedule agreed with the Panamanian state. Currently 2,700 people work at Howard and by 2015 that figure will rise to 9,500.

The studies made for the development of this sector clearly indicate that their location at the entrance and west shore of the Panama Canal is ideal for the establishment of a multimodal center for industry and the commerce. The existing airport infrastructure, and advance telecommunications facilities and the integration of the just in time manufacture with the multimodal transport will provide fast and flexible connections between users, suppliers and clients.

These areas and facilities that reverted to Panama at the end of 1999 have a total area of 2,628 hectares, and are one of the most important sites based on the opportunities for the development in the shores of the Canal in the Pacific.

 

A New Opportunity: Container Port in Farfan

Located at the Panama Canal’s entrance, near to the bridge of the Americas, the 253 hectares of Farfan are part of the former air base of Howard, the biggest military airport that the EE.UU Armed Forces had outside of the United States.

The Japanese government through its Agency for the Development (JICA), prepared a feasibility study that reveals that after occurring the maximum development of the Balboa port and after its modernization, Farfan can become the second great port of containers in the Pacific.

This port will be part of the multimodal center of transport that Panama promotes. With a view to integrate itself more indeed to the system of international transport its proximity to the port of Balboa and the airport of Howard makes this site especially attractive for the predicted development.

Business Opportunities of the Howard Project

Panama Pacific for investors represents an excellent opportunity for world class business, and the Panamanians a big step to turn the country into Business Center of the Americas, increasing its competitiveness and position in the globalized world of today.

• Connectivity (Data and Call Centers)
1. Incentives and taxes
2. Center and commerce
3. Information, communications and technology
4. Services and trade
5. Maintenance, repair and aircraft reconverción
• Logistic center of manufacturing and distribution
• Industrial parks and processing zones for export
• Development of residential areas
• Establishment of educative and institutional centers
• Recreational parks, of sports and tourist and recreational activities
  

The Panama Canal plays a significant role in the country's economy and has contributed an average of six percent of Panama's GDP since the 1980s. For more information about Business Opportunities, Legal, Consulting or other Services, please contact BusinessPanama.

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