The new administrator of the Panama Canal said that once the Rio Indio infrastructure project is complete, the critical shipping waterway will not need to impose restrictions on transit even during droughts.
In the meantime, however, it may need to impose more restrictions if there is not enough rain over the coming three months to lift reservoir levels, the authority's new head Ilya Espino de Marotta told Reuters last week.
A strengthening El Nino weather phenomenon is fuelling concerns about a possible water shortage at the Panama Canal, through which approximately three per cent to five per cent of the world's maritime trade passes.
"Depending on how rainfall comes in September, October and November — those are the three most critical months — they will tell me if I need to lower any quotas further in January, February or March," Espino de Marotta said.
A new reservoir being developed at Rio Indio is meant to secure water for the next 50 years for over half the nation's population as well as operation of the Panama Canal.
The Rio Indio reservoir is expected to take five to six years to complete and, "will guarantee that the canal won't have to resort again to either draft reductions or transit reductions," the authority's new head said.
Unlike the Suez Canal in Egypt, the Panama Canal relies on fresh water to operate three sets of locks that allow ships to cross between the Pacific and Atlantic oceans through an 80-kilometre artificial waterway.
Operations depend on two man-made reservoirs, Gatun and Alajuela lakes, which release millions of litres of water with each transit to raise and lower ships through the gravity-fed, century-old locks.
Some vessels have recently paid more than $1 million at auction to secure transit slots through the Panama Canal.
The Panama Canal Authority on Friday postponed a planned reduction in the maximum authorised draft for its neo-Panamax locks.
The authority said in August it would cap daily transits as of early September as it gears up for a longer-than-usual El Nino season, which was expected to reduce water levels.
(Reporting by Elida Moreno; Writing by Anthony Esposito; Editing by William Mallard)
