You are here

Panama Canal restricts ship depth due to drought

Tuesday, April 19, 2016 - 06:58

[PANAMA CITY] Officials running the Panama Canal on Monday started imposing restrictions on the depth of ships passing through because of lower water levels caused by a severe drought.

The measure trims ships' maximum allowed draft - the distance from the waterline to the bottom of the hull - by 5.9 inches (15 centimetres), from the usual 39.5 feet (12.04 metres) to 39 feet.

The Panama Canal Authority announced the restriction a month ago and has already said it would further reduce the accepted draft by another 15 centimetres from April 29, then again by the same amount on May 9.

Three years of drought have badly depleted water in the canal, through which around 35 to 40 cargo ships pass every day. Some five percent of world maritime traffic travels through the canal.

sentifi.com

Market voices on:

Panama Canal Authority vice president Carlos Vargas told Telemetro television that there are no early signs the drought will break.

"Unfortunately, there is no positive news," he said. "Quite the contrary." The canal depends on two lakes for its water, and both are well below their average levels for this time of year.

The last three years have been Panama's driest in more than a century, and El Nino, a cyclical weather phenomenon, has exacerbated the drought since last year, the authorities say.

Central America's rainy season is expected to break the drought. The precipitation is predicted to begin in "late May or early June," Mr Vargas said.

The canal's new restrictions would not greatly affect revenue, which typically brings Panama a billion dollars a year, the official added.

"It affects us, but it is not significant for the Panama Canal's finances," he said.

Work on expanding the canal to take bigger ships and triple its capacity is just about complete after nine years and around US$7 billion.

President Juan Carlos Varela is set to inaugurate the wider canal on June 26.

AFP

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom