Panama Canal- Authority Plans a US$1.6Bn Reservoir

• A Panama Supreme Court decision may allow the building of a new reservoir to supply water to the Panama Canal after facing declining water supplies. Last year, a drought dropped water supplies to critical levels, prompting canal authorities to limit traffic. At the worst point, in December 2023, only 22 ships a day were allowed to pass through the canal, down from the usual 36 to 38. More than 160 ships were stuck at anchor at both ends.
• Rains that began in May allowed the lifting of most restrictions, and in recent weeks, 35 ships passed through the canal on average. However, the concern around declining water levels still lingers in a new era influenced by climate change and frequent periods of El Niño, when ocean temperatures rise and rainfall decreases.
• Notably, during droughts, there is insufficient rainfall for the rivers and streams that supply water to the current reservoir system that fills the locks that transport ships over the terrain.
• A dam envisioned for Río Indio, southwest of Lake Gatún, which forms a major part of the Panama Canal, would create another reservoir that could replenish the canal during droughts. The project would also flood the homes of 2,000 predominantly poor people who would need to be relocated.
• Panama has long desired to construct an additional reservoir to support Lake Gatun; however, a rule implemented in 2006 prevented any expansion beyond the original watershed area. Last month, Panama’s Supreme Court struck down that limitation. The canal authority is now moving ahead with planning for the project, which is expected to take six years and cost US$1.6Bn.
• To proceed with the project, canal authorities are now focused on winning the approval of roughly 12,000 residents residing in about 200 villages in the vicinity. It is exploring places to relocate villages, opening outreach offices in affected communities, and expanding efforts to grow cash crops like coffee to replace livelihoods that will be uprooted.

(Sources: Africa News & The New York Times)