The Panama Canal: Comparing the Engineering &

Construction Programming Activities to the Port of

Gulfport Restoration Program

Brian Varnado brian.varnado@tlwallace.com

0 - ABSTRACT

This case study explores the similarities and differences in programming activities of the Panama
Canal Expansion and the Port of Gulfport Restoration Program (PGRP). The Panama Canal
Expansion has been dubbed the most critical construction project in global transportation and is
critical to the economic growth and development of Panama. Panama has become an emerging
pillar of economic stability in Central America since acquiring canal operations and control from
the United States in January, 2000. Although not as important to global transportation, the Port
of Gulfport Restoration Program is equally as important to the State of Mississippi and the
Northern Gulf of Mexico. Each program faces its share of programming difficulties as well as
accomplishments and milestones as they progress towards a 2015 substantial completion date.
The primary focus of this paper is to compare different aspects of program management for each
program. Programming activities evaluated include: funding/economic development, master
planning, scheduling, design, construction, and sustainability. Research for this case study was
obtained through examining peer-reviewed journals, interviewing port officials and program
directors, and gathering information by visiting the Panama Canal Expansion Program and the
Port of Gulfport Restoration Program. A supplemental case study of this report explores how the
Panama Canal, to include the expansion project, has affected the Panamanian government and
economy. Finally, this report will explore any implications of economic performance and non-
performance associated with each programs funding sources and specific mandates. The
summary of this study provides a detailed comparison of each entitys programming approach
and implementations thereof. The results of this research could facilitate an understanding of the
similarities and differences in programming approaches between two separate geographic
regions and cultural barriers.

1 - INTRODUCTION
Programming
Programming, or program management, is a term used in the engineering and construction
industry that encompasses the level of effort for a team of professional consultants who manage
all aspects of large projects or programs. A program can be further defined as a series of
interrelated projects that achieve a common goal. Different aspects of program management
include, but are not limited to: feasibility studies, funding acquisition, concept-level planning,
economic development, master planning, budgeting, scheduling, document control, engineering,
construction/construction management, commissioning and sustainability. For the purpose of
this paper, specific attention was given to each of these six functions: funding/economic
development, master planning, design, construction, sustainability and scheduling.
History & Economic Overview of the Port of Gulfport
Since the 2008 recession of the US economy, several programs and private corporations have
received federal funding to assist in the economic resurgence and development of the economy.
Many opponents of this process refer to it as bailouts. In many cases, the public investment
served its purpose and worked well. In other cases, the assistance was never recovered. The
specific case study mentioned in this report explores a publically funded program (Port of
Gulfport Restoration Program). The intent of the program is to help revitalize the economy and
lower the unemployment rate in South Mississippi.
In 2007 Mississippi State Port Authority received $570 million dollars in public assistance
funding from the Department of Housing and Urban Development (HUD) to rebuild the port
from damages incurred from Hurricane Katrina. The intent of the grant was to secure the long-
term operating capacity of the port that would serve as a premise for job creation and economic
development for South Mississippi. The grant funding came with a caveat, however. The port
must double its 1,200 full-time equivalent jobs to 2,400 jobs within five years after the
restoration program is complete.
As mentioned earlier, economic development is a vital component of the programming process.
Mississippi Development Authority (MDA) will lead the programming efforts to ensure that the
successful delivery of the PGRP meets any and all funding stipulations and mandates.
History & Economic Overview of the Panama Canal
The Panama Canal has been an integral part of International Trade and Commerce since its
commissioning in 1914. The United States Army Corps of Engineers stepped in and salvaged a
failed French attempt to properly design and construct the canal, which occurred between 1881
and 1889. It took over a decade of overcoming political upheaval and a threatening Columbian
revolution, but the US gained control and took over the original canal project in 1904. After
opening the canal, President Theodore Roosevelt called its completion, the greatest
achievement of his administration. (Hawkins, 2006) The primary objectives of Roosevelts
administration were to provide a faster, safer route for cargo traffic from the Atlantic and Pacific
Oceans and to promote a stronger, more secure, and more stable Panamanian Government.
(Mann, 2007) The new canal consisted of a series of channels, lakes, locks, and dams which
enabled vessels to cross the 80km wide Isthmus of Panama. (CE News, 2007) The United States
maintained operations of the Canal until December 31, 1999. The new millennium ushered in a
paradigm shift and transition in administering canal operations. For the first time ever, the
Panamanian Government had full jurisdiction and control over one of the worlds most important
water corridors. Since taking control, the Panamanian Government has facilitated growth in
every measurable facet of canal operations. In fact, their leadership was praised by the
Organization of American States (OAS) in 2004. The OAS expressed its praise for Panamas
efficient administration of the inter-oceanic waterway and for the countrys efforts to modernize
it. (OAS, 2004)
In October 2006, seventy-seven percent of Panamas citizens voted to adopt a resolution that
would allow the Panamanian Government and the Autoridad del Canal de Panama (ACP), also
known as the Panama Canal Authority, to seek funding to design and construct a major
expansion to the Panama Canal. (CE News, 2007) The resolution moved swiftly through the
bureaucratic process. By April of 2007, the Panama Canal Authority had finalized their plan and
presented it to then President Martin Torrijos Espino. He fully supported and endorsed the plan.
Subsequently, the National Assembly approved the expansion project on July 17, 2007. This
megaproject would become the largest undertaking since the canal was originally constructed.
Conceptual estimates for the project topped $5.5 billion US dollars.
The intent of the canal expansion was to serve a three-fold purpose: 1) to create a new water
transit lane by constructing two new locks one at each entry; 2) provide widening and
deepening at each entrance; 3) widen and deepen the navigation channel at Gatun Lake. These
three objectives would facilitate more traffic and accommodations for larger vessels, thus
increasing the overall revenue of the canal.
Not only did the Panamanian citizens and government see and hope for the benefits, the rest of
the international community did also. The international community saw this as a chance for
Panamanian economic growth and for expansion in global trade. US Ambassador Eaton
commented: This is important to the US. Its important to our economy The transit costs will
be cheaper and that will have an effect on the world market We welcome the expansion. (AP,
2006) Furthermore, former Secretary of State Condoleezza Rice called Panamanian Foreign
Minister Lewis Navarro to congratulate and commend the people of Panama on their decision to
expand the canal.
Major international relations were also solidified in December 2006 between the US and Panama
when the US-Panama Free Trade Act was signed. The Act secured the investments that the US
had made in Panama since 1904. The agreement ensured that all US investments would be
protected and that US firms would have the opportunity to participate, on a competitive basis, to
provide products and services on the expansion project. (USTR, 2006)
Approximately thirty-seven percent of the worlds container fleet is post-Panamax sized vessels.
Panamax is a term used to describe a ship that was designed to travel within parameters of the
current Panama Canal. Post-Panamax describes vessels that are too large to traverse the current
canal. With the size of container ships growing ever so larger, the demand and need to
accommodate these ships became more apparent. As Figure 1.1 indicates, Panamax vessels can
carry up to 4,000 TEUs. The more modern vessels, or New Panamax vessels, can carry up to
14,500 TEUs. (Container Transportation)

Figure 1.1 Vessel Sizes

US Perspective on the Panama Canal Expansion

The ten top customers, in terms of countries, of the Panama Canal are as follows: United States,
China, Japan, Chile, South Korea, Peru, Canada, Ecuador, Colombia, and Mexico. (ACP, 2007)
As a result of the US-Panama Free Trade Agreement and our mass imports, the US is the Canals
number one customer. The expansion will further promote US commerce and investment
throughout Panama and Central America. In regards to trade, the ability to accommodate larger
vessels in a shorter timeframe will further increase the amount of imports to the eastern and
southern United States, at lower unit prices. This will ultimately reduce the end-users cost for
such commodities. (Mann, 2007) This is a paradigm shift of ironic proportions from what
President Roosevelts intentions were when he built the canal. His administration built the canal
in hopes that the United States would be the world leader in exports to Asia. He wanted to be the
number one customer for different reasons. As is turns out, the United States ended up as the
worlds leader in imports; it is still the canals number one customer, though. (Hawkins, 2006)
The canal, just as it was in 1914, is still an extremely valuable thoroughfare for US imports and
exports. Other motives/strategic aims for the United States to fully support the canal expansion
was to ensure the ability to transverse the canal with larger aircraft carriers during military
deployment operations.
As the potential for additional imports to arrive on the eastern seaboard and in the Gulf of
Mexico region, many United States ports are preparing their ports in expectations of receiving
such additional cargo. South and East Coast ports are extremely keen on the expansion. It will
allow them to receive and handle larger container throughputs. (Munn, 2007) Ports along the
Atlantic and Gulf Coasts have been scrambling to procure funding to upgrade their facilities. An
estimated $6 billion US dollars has been allocated to ports from New York to Savannah, GA to
make the necessary preparations. (CE News, 2007) The primary issue at all ports is the depth of
their channels. Post Panamax vessels have draft depths up to 15 meters (49 feet). Most US ports
must deepen their channels to accommodate the Post-Panamax vessels. Obtaining authorization
for channel deepening is a painstaking process that could take years, even decades to achieve.
The US Army Corps of Engineers oversee all applications for authorization. Funding for such
activities is usually sought at federal, state, local, and even private levels. The secondary issue is
the need to upgrade ship-to-shore crane systems and inland storage/transit facilities. Sujit
CangaRetna, Senior Fiscal Analyst for the Council of State Governments Southern Office,
stated: Obviously, the impetus is that ports are trying to get a piece of the action because they
see this incredible expansion in trade and exports. They feel this is one way we can really
stimulate growth, not just at the port, but across the southeast region. (Capitol Ideas, 2012)
While the Atlantic and Gulf Coast ports are expanding and preparing, West Coast ports arent
conceding any business. (Capitol Ideas, 2012) They are also upgrading facilities in efforts to
preserve and maintain current contracts and clients. See Figure 1.2 for North and South
America port locations and sizes, based upon 2010 TEU throughput. This map provides a visual
indication and proximity relationship of major port locations to the Panama isthmus.

Figure 1.2 North & South Americas Coastal Port Locations

Some southern ports are very optimistic about the potential increases in cargo. Ted Houghton,
former Texas Transportation Commissioner stated: The Panama Canal expansion will have
profound impacts on job opportunities and economic development for Texas, as well as solidify
Texas as the trade corridor of this hemisphere for decades to come. (Texas, 2006) As depicted
in Figure 1.2, the Port of Houston is the largest US port in the Gulf of Mexico.
In addition to the potential for additional trade, several US firms have already become
beneficiaries of the canal expansion project. Under provisions of the 2006 US-Panama Free
Trade Agreement, US corporations were ensured the opportunity to compete for design,
engineering and construction contracts on the expansion program. Design, engineering and
construction management firms have already procured several large contracts to provide services
on the canal expansion. New York based Parsons Brinkerhoff, was contracted to write ACPs
Master Plan that recommended the installation of the new corridor and lock system. Aon
Corporation, based in Chicago, landed the contract become ACPs insurance broker and risk
management advisor. In 2007, URS, a Texas-based engineering firm, lead a consortium group
that procured the expansions Environmental Assessment. (Munn, 2007) CH2MHILL, a
Denver-based corporation, was awarded a contract to augment the ACP with their Program
Management responsibilities.

2- INFORMATION/DATA COLLECTION APPROACH

Research for this paper culminated from a vast array of sources. A series of peer-reviewed
journal entries were obtained from the Online USM Library and EBSCOhost databases.
Keyword searches for the Panama Canal Expansion, Panama Economy, and Panama Canal
Authority were conducted at both sites. Several periodical publications on the same search
parameters subjects were obtained by utilizing Google Search Engine. All references found on
the reference page came from the below sources:

Table 2.1
Internet Searches
Database URL Information/Keyword Search
USM Library www.encore.lib.usm.ed "Panama Canal Expansion"
USM Library www.encore.lib.usm.ed "Panama Economy"
EBSCOhost www.ehis.ebsohost.com "Panama Canal Authority"
EBSCOhost www.ehis.ebsohost.com "Panama Canal Expansion"
Google www.google.com "Panama Canal Expansion"

Furthermore, interviews were conducted with key personnel from various organizations, to
include the Panama Canal Authority and Mississippi State Port Authority. The information
collected was used as a premise of organization, structure, and continuity for the compilation of
this paper. A key representative from the ACP was interviewed on both the operations and
expansion aspects of the Panama Canal. Representatives from the Mississippi State Port
Authority were interviewed to establish the methods and programming approaches on the PGRP.
Finally, interviews were conducted on CH2MHILL Project Managers at both the Panama
Expansion and the Port of Gulfport Restoration Programs.

Table 2.1 Scheduled Interviewees

Interviews
Company Person
Panama Canal Authority (ACP) Larry Belkin, PM (ACP Augmenter)

Panama Chamber of Commerce Dr. Albert White, Director of Transportation &

Logistics
 Mississippi State Port Authority Jonathan Daniels, Executive Director
(MSPA) Van Grundmann, Chief Marketing Director
CH2MHILL Lon Elledge, Program Manager (PGRP)

Figure 2.1 2013 USM Study Abroad Program with Dr. Albert White, Director of
Transportation & Logistics for the Panama Chamber of Commerce

3 - CASE STUDIES
Case Study 1
Impact of the Canal Expansion on the Panamanian Economy
A study conducted in 1972 indicated that there were 15,348 transits through the canal. This
produced nearly $100 million in revenue from tolls. The average vessel paid approximately
$6,500 in passage fares. The canal payroll alone that year totaled over $120 million and was
divided equally between US and Panamanian workers. Payroll alone was more than the revenue.
Although transportation companies benefited from the canal, it was not paying dividends for the
local economy. This process was the norm for decades and the local economy continued to
struggle as a result. Panama wasnt able to overcome the negative economical impacts that the
canal burdened the country with.
As noted previously, one of the US primary reasons for constructing the canal and eventually
handing it over to the Panamanian Government, was to promote the stability and independence
of their country. For decades, the Panamanian people struggled for economic growth and free
trade independence. As late as 2001, up to thirty-seven percent of the population lived under the
poverty line. Seventeen percent lived on an income of less than $2 US dollars per day.
(Gonzalez, 2006) These statistics are a prime indication of a potential social reformation, which
by all means promoted regional instability. However, since then, the canal has proved to be an
invaluable source of substantial revenue for the country. When appropriated correctly, these
revenue figures can sustain and promote economic growth of the entire country.
Since the handover in 2000, the ACP has shifted its business approach from not-for-profit to a
market-oriented business model. Their model is focused on service and reliability. This model
has served the local economy well. The future economic outlook for Panama is tremendous.
The canal serves as a sustainable resource for revenue, far better than any diminishable
commodity. (LuvPanama) According to the ACP, the $5.25 Billion dollar expansion price tag
will be picked up directly by the canals customers and will not negatively affect the Panamanian
economy. In fact, it will have the adverse affectpositive growth.
The Panama Canal has five strategic marketing points that are irrefutable to international oceanic
transportation:
1) Fuel costs are expensive and will continue to rise.
2) It is an extra 7,900 miles of wear and tear on vessels to traverse around the southern
tip of South America, Cape Hope.
3) The route around Cape Hope is perilous. It is one of the most dangerous sea routes in
the world. Maritime insurance providers frown upon writing policies for vessels
traveling that route; when carriers issue policies, they are too expensive.
4) Travel time is shorter. It takes an additional 22 days to sail from San Francisco to
New York via Cape Hope as opposed to traversing the Panama Canal.
5) The environmental public relations image of companies sailing around the Cape will
have a negative effect. They leave a larger carbon footprint. Mitigation and
remediation costs of any accident in the treacherous waters would be insurmountable
to overcome.

Figure 3.1 Trade Route Options

As long as canal tolls remain under the cumulative cost of these five conditions, it will forever
remain the only viable and reasonable option. The current rate for using the canal is upwards of
$350,000 per transit. Recall that in 1972, it was $6,500. Researchers have indicated that the
canal could potentially double that fee and it would still be less expensive to use the canal over
sailing around Cape Hope. (LuvPanama)
ACP has turned the tide so much, that in 2010 the canal operations earned nearly $300 billion
USD in revenue, of which $800 million was profit. Upon the expansion completion in 2015,
yearly profits are projected to top $2 billion. No other country in Central America has that bright
of an economic future. It is projected that Panamas Gross Domestic Product will double within
eight years of the expansion completion; triple within twenty years. (LuvPanama)
An onsite interview was conducted with Dr. Albert White, Director of Transportation &
Logistics for the Panama Chamber of Commerce. Dr. White emphasized that the revenue from
the canal contributes to approximately thirty percent of the annual Panamanian Gross Domestic
Product. Dr. White further commented, The canal is a cherished, non-depleting commodity to
our country.

Case Study 2
Programming Comparisons
A. Funding/Economic Development
In 2009, Mississippi State Port Authority adopted a vision plan to not only restore the port, but
build a better, a more suitable venue that would provide transit space and facilities for current
and future tenants. In order to meet the stipulation of the HUD grant, MSPAs market strategies
are twofold: 1) maintain and support the growth and development of its current tenants 2)
provide marketable area(s) that would attract new tenants. Whichever approach is taken, the
overall approach is to increase container throughput and/or bulk cargo tonnage. Increase in
either operation would produce new jobs. The current annual container throughput is 212,000
TEUs. According to the current master plan, the port will be able to facilitate up to 1 million
TEUs by 2018 to help meet the job creation mandate. This throughput will be comparable to the
Port of Cristobals 750,000 annual TEU throughput. Cristobal is located in the Colon Free Trade
Zone, just outside the Atlantic Lock of the Panama Canal.
The current marketing approach for attracting a new maritime tenant is to provide a 50-acre site
located on the southern end of the West Pier with dedicated wharf frontage for birthing and an
intermodal facility, complete with road and rail access. These accommodations would easily
attract a high-capacity container tenant or large-tonnage bulk operator. Another non-maritime
site is being developed on the North Harbor. This 23-acre site could be utilized as a public retail
area, warehouse distribution facility, or even an entertainment venue. Any jobs created by these
non-maritime operations would also count toward the jobs creation mandate. The only exclusion
for jobs creation is through the development of gaming operations and revenues.
As mentioned earlier, the Panama Canal Expansion is financed through a public referendum to
publically finance the program. In its simplest form, financing has to be repaid with interest. A
consortium of global banks served as lenders to the Panamanian government. The Panama Canal
Authority compiled a stable business plan that was accepted as financially feasible and stable to
the lending consortium. The canal revenues are projected to cover the debt as well as support the
Panamanian economy. This is in contrast to the publically funded PGRP. The public funds were
made available and allocated by HUD with the stipulation of job creation, not payback.

B. Master Planning
The master planning process for both programs began with a conceptual vision plan. Each plan
was intended to be dynamic and continually updated as economic, engineering, and political
environments change. Parsons Brinkerhoff developed the master plan for the canal expansion,
which included doubling the transit capacity and accommodating larger vessels. The premise of
the plan was to establish new traffic lanes and new lock systems (referred to as Third Set of
Locks) positioned at each end of the canal. The new Pacific Locks will be located just southwest
of the current Miraflores Locks and the new Atlantic Locks will be located east of the Gatun
Locks. Furthermore, extensive dredging will be required at each entry and at various locations
along the canal to allow for deeper draft vessels. Another major consideration of the master plan
was to ensure that current canal operations were not interrupted during the expansion program.
The Master Plan was adopted and implemented through a government referendum and accepted
proposal in April, 2006 (ACP).
Figure 3.2 depicts conceptual renderings of the Third Set of Locks Project. This arrangement
will be constructed at each end of the canal.

Figure 3.2 Renderings of New Locks

The Ports and Maritime Group at CH2MHILL, a Denver-based design firm, developed the
Master Plan for the Port of Gulfport Restoration Program. The initial plan was submitted as a
10-Year Work Plan that provided for a high-capacity stacked container terminal, capable of
handling up to two million TEUs per year. It included provisions for remediating the Port from
damages incurred by Hurricane Katrina in 2005 and completing an already active fill project that
was destroyed by the storm. It also entailed performing environmental assessments, permitting,
and design and construction of a 160 acre expansion directly south of the existing ports west
pier. Additional activities of the master plan included design and construction of an intermodal
facility, new tenant transit facilities, and reinforcing the current wharf structure to accommodate
new rail-mounted gantry cranes. The final aspect of the original plan was to deepen the ports
navigational channel to 45 feet. The Master Plan was adopted by MSPA and Mississippi
Development Authority in April, 2009. The Executive Summary of the Master Plan is as
follows:
To facilitate the restoration of the Port and related public infrastructure and
facilities, to mitigate future storm damages, and to provide long-term recovery of
the Port operating capacity, while providing a platform for a sustainable recovery of
the Mississippi Gulf Coast. The direct goals are to position the Port as the leading
container port on the Gulf of Mexico for the next 100 years and to create well-
paying jobs for South Mississippi residents.
The plan was developed to be adaptable to the changing market conditions and port tenant
requirements. The 10-Year Work Plan had a program budget of $1.6 billion dollars. Currently,
only the $570 million HUD funding has been allocated, subsequently scaling back the Master
Plan. Concessions included dropping the design and construction of the future expansion,
deepening the channel, and scaling back the TEU capacity. Environmental assessments and
permitting for those activities remain tasks under the current plan. The Master Plan was
officially amended and renamed the PGRP Implementation Plan in August, 2010. The
Implementation Plan reflected only activities that could be supported with the respective
funding. Activities were limited to the ports west pier and portions of the north harbor. The
current plan is shown below in Figure 3.2 and allows for approximately 73 acres of terminal
space for new tenant development, or in payback termsjob creation. A conceptual rendering is
shown in Figure 3.3.

Figure 3.3 West Pier Tenant Layout

 Figure 3.4 West Pier Rendering

C. Engineering
Both programs are faced with major engineering challenges, which in return could produce
major engineering accomplishments. After each master plan was adopted, each respective owner
contracted some of the worlds best engineering firms to lead design and engineering efforts.
Panama used a design-build model to tackle the Third Set of Locks at each end of the canal. The
design-build contract was awarded to a consortuim, or joint-venture, of four construction and
engineering firms in July, 2009 in the amount of $3.2 billion dollars. The consortium consists of
Sacyr Vallehermoso, Impregilo, Jan De Nul, and CUSA. The notice to proceed was issued on on
August 25, 2009. The main purpose for adopting the design-build model was to fast-track the
various construction packages that each lock entails. This format allows the engineering teams
to complete a certain design package and instantly turn it over to their construction counterparts,
without any procurement delays. It also provides for continual continuity and communication
between design and construction. This approach also minized the amount of entities contracted
directly with the ACP. (ACP)
One of the many engineering feats on the canal
expansion was to utilize sliding gates in lieu of the
traditional hinged gates that are being used on the
current locks. The sliding gates allow for a faster
operation of the lock systems and provide a more
water-tight seal. Extensive mechanical engineering
and hydraulic analyses were required to design the
sliding gates. Figure 3.5 shows the sliding gates
being manufactured by Cimolai, a metal fabrication
company in Italy. Refer back to Figure 3.2 for a
conceptual depction of the operable sliding gates.
Figure 3.5 New Gates under Construction
The PGRP program is taking a more traditional approach to the engineering model, design-bid-
build. MSPA has contracted more than a dozen engineering consulting firms to design the
various aspects of the program. Speciality designers include coastal, geotechnical, civil,
electrical, marine, structural, and mechanical engineers. Other consultants were contracted to
perform environmental and permitting assessments. Because of this model, time allocation is
built into the program schedule to allow for procurement of construction contracts.
One of the main hurdles in engineering the port restoration was to protect port assests from
future storm damage. The decided approach was to elevate the entire west pier from an average
elevation of +8 mean sea level (MSL) to +13 MSL and extensively protect the shorelines with
armor stone. Other major engineering hurdles included retrofitting an antiquated wharf structure
to adequately hold new rail-mounted gantry cranes. Extensive research was undertaken to
deternime the existing conditions below the wharf.

Finally, there were significant geotechnical investigations and engineering on an open-water fill
project that added 24 acres of new land to the west pier. The design included marine dredging
operations to create a fill prism that vertexed at -20 MSL. The intent of the design was to place
sand fill in lifts as to not displace the underlying soft clays. The initial geotech report showed
soft clays as deep as -40MSL. Significant efforts were made in both design and construction as
to limit the amount of mud displacement, while creating a suitabale foundation for future
structures. The left side of Figure 3.6 shows the fill and shoreline protection being applied on
24 Acre Project.

Figure 3.6 Aerial Photo of Port of Gulfport (June 2013)

D. Construction
As stated earlier, the majority of construction at the canal expansion was directly tied in with the
design-build contract for both lock systems. However, other construction only contracts were
awarded for large excavation and fill projects. A deepening and widening project to the Pacific
entrance of the canal was awarded to Dredging International in April, 2008 for $178 million.
The contract stipulated that 8.7 million cubic meters of material be dredged and removed from
the project site. There are roughly ten other similar stand-alone construction projects throughout
the program.
An important aspect of publically funded/financed construction projects is jobs creation. The
table below, Table 3.1, shows that as of September, 2012, over 27,000 direct construction jobs
have been created due to the canal expansion.
Table 3.1 - Job Creation Log (Panama Canal Expansion)

In contrast to the design-build approach taken by the ACP all construction contracts on the
PGRP have been awarded via the design-bid-build delivery method. The current programming
forecast requires seventeen independent construction projects to complete the program. An
independent construction manager was hired by MSPA to oversee all field construction activities
and coordinate logistics with the respective engineer of record. Table 3.2 lists each of the
seventeen construction projects associated with the port program.
Table 3.2 PGRP Construction Projects
PGRP Construction Projects
1 North Harbor Demolition 10 Infrastructure Phase 1
2 60 Acre Fill 11 Infrastructure Phase 2
3 24 Acre Dredge 12 Infrastructure Phase 3
4 24 Acre Fill 13 Crowley - North Harbor
5 Plus 25 Fill, Phase 1 14 North Harbor Clean Up
6 West Pier PVD Completion 15 Port Equipment
7 IDIQ Fill Projects 16 Tenant Facilities
8 Wharf Crane Rail Upgrades 17 Port Operations Building
9 West Pier Shore Protection
To date, the PGRP has generated 204 construction related jobs. These jobs are independent of
and do not could toward the 1,200 permanent jobs that must be created due to funding
stipulations.

E. Sustainability
Both programs are actively pursing ways to eliminate construction and operational waste, reduce
the carbon footprint, and construct facilities with low operational overheads. The canal
expansion has adopted every environmental standard and best practice imaginable, from
reforestation, to an extensive archaeological rescue policy, to water efficient lock designs. In
keeping with sustainable development principles, the canal will use unique water-saving basins
to help mitigate the loss of water due to lock operations. Figure 3.7 is a conceptual rendering of
how the new locks will generate a 7% water savings over the existing locks. Although outside
the canal expansion scope, it is of interest to note that the entire Panamanian community has
adopted various sustainable practices. The City of Knowledge, located next to the Miraflores
Locks, recently commissioned a Leadership in Energy & Environmental Design (LEED)
Platinum dormitory facility.

Figure 3.7 - Cross Section of New Lock

The PGRP is also taking steps to promote green construction. MSPA will implement a series of
photovoltaic cell arrays on the roof structures of the tenant transit facilities that provides power
to site lighting and various other electrical components, therefore reducing the energy demand
from the local power authority. Also, MSPA is exploring the feasibility of registering their new
Port Operations building as a LEED Silver/Gold project.

F. Scheduling
Both programs track the schedule progress and budgeted costs using a Critical Path Method
scheduling method. A cost-loaded schedule is kept and maintained on all program activities and
checked against an Earned Value Measurement. Both programs utilize a combination of MS
Project and Primavera P6 software. All critical activities should be complete on the canal
expansion by the second quarter of 2015. See Figure 3.8 for a Gantt chart showing the
expansion critical path. Figure 3.9 reflects a work breakdown structure, level 2 of the PGRP and
shows the program obtaining final completion by the third quarter of 2016.

Figure 3.8 - Panama Canal Master Program Schedule

Figure 3.9 - PGRP Master Program Schedule

 4 RESULTS & RESULTS IMPACTS

The only distinct difference observed in programming activities was the project delivery method.
The Panama Canal Authority was able to utilize a design-build delivery method to fast track the
individual projects, therefore the overall program. Mississippi State Port Authority delivers its
projects in more of a linear, or traditional, delivery method. Mississippi contract procurement
laws have impeded the Ports ability to procure and award design-build contracts.

Three notable impacts were identified from studying and observing the different programming
functions.

1. Regardless of language, cultural, and geographic barriers, basic programming

techniques were applied similarly.
2. Always explore the various options for a project delivery method that best suits the
needs of the program.
3. Economic development, especially as it relates to job creation is equally important in
each region.

Table 4.1 shows the major differences and comparable similarities between the two programs.

Table 4.1 Comparison Chart

ACP (Panama Canal MSPA (Port of Gulfport

Comparison Category
Expansion) Restoration Program)

Funding/Economic Financed; Pay Back with Funded; Jobs Creation

Development Interest Stipulation

Third Set of Locks & Dredging West Pier Development; 73

Master Planning
Projects Acres for New Development

Design-Build for Locks;

Independent Design
Design Typical Design Delivery for
Consultants
Dredging & Excavation

1 Large DB Contract and

17 Independent DBB
Construction Various DBB Contracts;
Contracts; 204 Jobs Created
27,000 Jobs Created

Water Efficient Locks,

PV Cell Array, LEED Ops
Sustainability Reforestation, Archaeological
Building
Preservation

CPM; 2015 Substantial

Scheduling CPM; 2015 Completion
Completion
 5 SUMMARY
Despite of the differing geographical locations and cultural differences, each of the six
programming aspects measured proved to have comparable means and methods and comparable
results. Each program has to repay the funding, one way or another. Each has a feasible plan to
do so. Job creation is a major concern for each. Both programs have adopted sustainable design
and construction practices. Both programs rely on CPM scheduling for progress and budget
tracking.

It was a pleasure exploring the different programming functions at each location. By comparing
the two against each other, it helped identify common practices in global engineering and
construction industry. It also brought to light that each regions public policy may hinder the
ability to procure projects through a certain delivery method. The design-build delivery method
is accepted exclusively in Panama and is working well on each of the new locks. Design-build is
also common in the United States, but could have different restrictions in each state.

Finally, the implications and impacts of programs of this magnitude reach far beyond the
engineering and construction industry. The whole premise and purpose of each program was to
ensure economic development and growth in the global transportation market, while facilitating
invaluable employment opportunities both interim and long-term.

6 -REFERENCES
(ACP, 2007) ACP. The Panama Canal An Overview. Available at
http://www.panacanal.com/eng/plan/documentsos/propuesta/acp-panama-canal-an-overview.pdf

(Capitol Ideas, 2012) Capitol Ideas, March/April 2012, Hot Topics: Ports in Transportation.
http://www.csg.org/pubs/capitolideas/Mar_Apr_2012/Mar_Apr_2012_images/CIMarApr12.pdf

(CE News, 2007) Civil Engineering News, January 2007

(Hawkins, 2006) William R. Hawkins, Panama as a Bellweather of U.S. Fortunes: The Storm
Gathers, American Economic Alert, 4 November 2006, available at
http://www.americaneconomicalert.org/view_art.asp?Prod_ID=25923
(LuvPanama) #38. Economic Impact of the 2014 Canal Expansion on Panama's Future,
available at http://www.luvpanama.com/economic-impact-of-the-2014-canal-expansion.html
(Mann, 2007) Carlos G. Mann, The Panama Canal Expansion Project: US Interests and Other
Considerations, ISA, Chicago, 28 February 2007
(OAS, 2004) Organization of America States, Permanent Council, Commemoration of the
Twenty-Fifth Anniversary of the Entry Into Force of the Torrijos-Carter Treaties on the Panama
Canal, CP/DEC. 27 (1446/04), 29 September 2004, available at
http://www.oas.org/council/resolutions/dec27.asp
(Texas, 2006) New Study Looks at Panama Canal Expansions Effect on Texas
Transportation. Texas Department of Transportation press release, 28 November 2006,
available at http://www.dot.texas.tx.us/news/029-2006.htm
(USTR, 2006) Office of the United States Trade Representative, Trade Facts Free Trade with
Panama, 19 December 2006, available at
http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2006/asset_upload_file138_10233.p
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