06/11/2013
Panama Canal Expansion
The Historical Context
Greg Haigh
Haigh Consulting Engineers
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06/11/2013
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Hernando Cortez - 1513
Much have I travelled in the realms of gold….
……..
M
Or like stout Cortez when with eagle eyes
He stared at the Pacific – and with all his men
Looked at each other with wild surmise –
Silent on a peak in Darien.
Keats (1795 -1821)
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Hernando Cortez
Much have I travelled in the realms of gold ….
……….
…. Or like stout Cortez when with eagle eyes
He stared at the Pacific – and with all his men
Looked at each other with wild surmise –
Silent on a peak in Darien.
M
Keats (1795 -1821)
Vasco Nunez de Balboa
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Lessons from the Canal
• Don’t believe all that you read (Keats)
• It may not be a good investment, even if
everyone else says it obviously is (Scots in Darien)
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1855
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bbbb
2006
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Lessons from the Canal
• Don’t believe all that you read (Keats)
• It may not be a good investment, even if
everyone else says it obviously is (Scots in Darien)
• Vested interests can have huge impacts (Colon)
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Ferdinand de Lesseps
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‫مصر‬
Egypt
“Look on my works ye mighty and despair”
(Shelley 1792 - 1822)
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Napoleon in 1798
Consul in Cairo in 1835
Disgraced diplomat in Rome 1848
Mohammed Ali Mohammed Said 1854
Concession for Suez Canal 1855
Lessons from the Canals
• Don’t believe all that you read (Keats, Napoleon)
• It may not be a good investment, even if
everyone else says it obviously is (Scots in Darien)
• Vested interests can have huge impacts (Colon)
• Don’t let a career setback discourage you
(de Lesseps)
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Suez Canal Outcomes
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1867 – Sale of bonds (FF100m)
13 months to go – 33% of excavation left!
1869 - Final cost FF404m (US$1,800m today)
1870 – 0.5m tonnes, c.f. 5.0m tonnes target
1875 – Egypt bankrupt –forced to sell shares!
1879 – French bought 15% of share of profit
Egypt had no stake in canal
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Lessons from the Canals
• Don’t believe all that you read (Keats, Napoleon)
• It may not be a good investment, even if
everyone else says it obviously is (Scots in Darien)
• Vested interests can have huge impacts (Colon,
British government, French government)
• Don’t let a setback discourage you (de Lesseps)
• Concessions almost invariably work out badly
for governments
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“……………………..
Nothing besides remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and levels sands stretch far away.”
(Shelley)
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Back to Panama
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La Societe International du Canal
Interoceanique
1876 – Enter de Lesseps
1877 - Wyse & Reclus - Darien; sea level
1878 - Concession from Columbian government
1879 - International Engineering Congress - Paris
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La Societe International du Canal
Interoceanique
214
168
131
120
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La Societe International du Canal
Interoceanique
Early 1879
Late 1879
Feb 1890
March 1890
$214m
$168m
$131m
$120m
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La Societe International du Canal
Interoceanique
1881 – Start construction - sea level canal – Panama
– 22m wide, 9m deep, 120 Mm3
1887 - Need locks
1889 – 59 Mm3 excavated
– Culebra Cut to +59m ASL from +110m
- $235m spent ($6,000m today)
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06/11/2013
La Societe International du Canal
Interoceanique
1881 - Start construction - sea level canal – Panama
- 22m wide, 9m deep, 120 Mm3
1887 - Need locks
1889 - 59 Mm3 excavated
- Culebra Cut to +59m ASL from +110m
- $235m spent ($6,000m today)
- 22,000 dead
- Insolvent
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La Societe International du Canal
Interoceanique
• Why?
– Poorly validated budget
– Changing definition of project
– Inadequate surveys
– Poor geotechnical knowledge
– Poor understanding of hydrology of the area
– No understanding of health issues
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Lessons from the Canals (1)
• Don’t believe all that you read (Keats, Napoleon, de
Lesseps)
• It may not be a good investment, even if
everyone else says it obviously is (Scots in Darien,
French in Panama)
• Vested interests can have huge impacts (Colon,
British government, French government)
• Don’t let a setback discourage you (de Lesseps)
• Concessions almost invariably work out badly
for governments (Egypt)
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Lessons from the Canals (2)
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Adequate surveys and site investigations
Define and design the project
Manage change
Consider the human cost
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Compagnie Nouvelle du Canal De
Panama
1894 - Engineering studies
- Culebra Cut excavation
- Half-hearted
- Aiming to sell for $109m
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Enter the USA
1887 - Regimental survey in Nicaragua
- Maritime Canal Company
1893 – Planning stopped after stock market panic
1901 – Theodore Roosevelt - President
1903 - Supported Panama rebellion against
Columbia
- Panamanian independence
- Hay-Bunau Vanila Treaty
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The American Canal - 1904
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20 mile wide “Canal Zone” ceded to USA
Uncertain in 1905 – sea-level or locked?
Bought out French company for $40m
Repeated French mistakes
Chief Engineer 1905 -1907 – John Stevens
Do it first and get permission later
US Army as contactor from 1907 – Chief Engineer
- George Geothals
• 3 sets of locks, 4 dams, bed at +12mASL
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The American Canal 1914
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Opened in 1914
Cost $375 m ($8,900 m today)
5200 deaths
182Mm3 excavated (plus 20Mm3 by French)
US owned and operated
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Expanding the Canal
• 1939 – Congress authorised constructio of
third lock – 366m x 42.5m x 13.7m
• 1940 – Started excavation
• Abandoned
• Canal “profitable by 1950s”
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The Lessons
• Accurate budgets need surveys, SI &
engineering design
• Projects need visionaries
• Visionaries are threat to investors
• Each generation repeats the mistakes of the
previous one
• Governments lose out from concessions
• Human cost
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An opening to a new future
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