NOVA MEDIA PUBLISHING INC.

Drought Causes Revenue Decrease in the Panama Canal

3.5.2019

The low water level in the Panama Canal has forced Canal Authorities to implement a possible new adjustment in the draft of the ships that transit through the Neopanamax locks.

According to the Panama Canal Authority (ACP), the measure is in response to the lack of rainfall which is affecting the flow of the Chagres River, the main source of the lakes that feeds this fluvial route.

The adjustment to 44 feet means that the vessels must move with less cargo, which could mean about US$15 million less in revenues for the fiscal year 2019, the source said.

The ACP assured that all these notifications to the customers have been made in advance so that they can make the pertinent arrangements.

Recently this administrative entity reported that the first quarter of 2019 was the driest in the basin in 106 years of history, hence the need to guarantee the water reserve.

The vice president of environment and water of the Panama Canal, Carlos Vargas, announced that as a result of the impact of the drought, they are considering the implementation of a sixth regulation for the draft of ships as from May.

Although the ACP considers that within three weeks the rains in the Canal Basin will have to return to normal, the NOAA of the United States announced that there is an 80% probability that the El Niño phenomenon will be present until June.

For his part, the director of the Institute of Aqueducts and National Sewers, Juan Felipe De La Iglesia, warned that if in a period of 36 days the level in Lake Alajuela does not rise measures will be taken to supply the water. It is the first time that the El Niño phenomenon has combined with the expansion of the Canal and has placed pressure on lake levels, he said.

For the time being, some measures have already been taken, such as the suspension of operations of the water treatment plant in Chilibre on Monday, which left the city without water supply and a request to government bodies to stop watering public areas.

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