Panama Canal Authority eyes Rio Indio project to combat future droughts

Posted on August 30, 2024   |  

After dealing with a severe drought for over a year, Panama Canal authorities are exploring ways to prevent future issues and improve customer service.

The Panama Canal plays a crucial role in global trade, connecting 180 maritime routes to 1,920 ports in 170 countries, and handling nearly 3% of worldwide maritime trade.

The canal experienced its worst drought since 1950 last year, with water levels reaching a historic low in January.

To combat future droughts, the Panama Canal Authority (ACP) proposed the $1.6 billion Rio Indio Reservoir project, which involves damming the Indio River and building a 5-mile tunnel to connect the reservoir to Gatun Lake, the canal’s main water source.

The Rio Indio project, expected to take over five years to complete, could increase the canal’s capacity by allowing up to 15 more ships per day, but it faces opposition from local communities worried about potential flooding.

On July 2, Panama’s Supreme Court reinstated a law that expanded the ACP’s watershed area to include an additional 1.4 million acres, up from the previous 741,316 acres.

Due to the drought, the ACP had reduced daily ship transits from 36 to as few as 18 by February 1, but recent rains have allowed the canal to increase transit slots back to 36 starting in September.

Restoring the canal's 50-foot draft is important, enabling larger Neopanamax container ships to pass through the waterway.