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The Panama Canal: Comparing the Engineering & Construction
Programming Activities to the Port of
Gulfport Restoration Program
Brian Varnado [email protected]
0 - ABSTRACT
This case study explores the similarities and differences in
programming activities of the Panama Canal Expansion and the Port
of Gulfport Restoration Program (PGRP). The Panama Canal Expansion
has been dubbed the most critical construction project in global
transportation and is critical to the economic growth and
development of Panama. Panama has become an emerging pillar of
economic stability in Central America since acquiring canal
operations and control from the United States in January, 2000.
Although not as important to global transportation, the Port of
Gulfport Restoration Program is equally as important to the State
of Mississippi and the Northern Gulf of Mexico. Each program faces
its share of programming difficulties as well as accomplishments
and milestones as they progress towards a 2015 substantial
completion date. The primary focus of this paper is to compare
different aspects of program management for each program.
Programming activities evaluated include: funding/economic
development, master planning, scheduling, design, construction, and
sustainability. Research for this case study was obtained through
examining peer-reviewed journals, interviewing port officials and
program directors, and gathering information by visiting the Panama
Canal Expansion Program and the Port of Gulfport Restoration
Program. A supplemental case study of this report explores how the
Panama Canal, to include the expansion project, has affected the
Panamanian government and economy. Finally, this report will
explore any implications of economic performance and
non-performance associated with each programs funding sources and
specific mandates. The summary of this study provides a detailed
comparison of each entitys programming approach and implementations
thereof. The results of this research could facilitate an
understanding of the similarities and differences in programming
approaches between two separate geographic regions and cultural
barriers.
1 - INTRODUCTION
Programming
Programming, or program management, is a term used in the
engineering and construction industry that encompasses the level of
effort for a team of professional consultants who manage all
aspects of large projects or programs. A program can be further
defined as a series of
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interrelated projects that achieve a common goal. Different
aspects of program management include, but are not limited to:
feasibility studies, funding acquisition, concept-level planning,
economic development, master planning, budgeting, scheduling,
document control, engineering, construction/construction
management, commissioning and sustainability. For the purpose of
this paper, specific attention was given to each of these six
functions: funding/economic development, master planning, design,
construction, sustainability and scheduling.
History & Economic Overview of the Port of Gulfport
Since the 2008 recession of the US economy, several programs and
private corporations have received federal funding to assist in the
economic resurgence and development of the economy. Many opponents
of this process refer to it as bailouts. In many cases, the public
investment served its purpose and worked well. In other cases, the
assistance was never recovered. The specific case study mentioned
in this report explores a publically funded program (Port of
Gulfport Restoration Program). The intent of the program is to help
revitalize the economy and lower the unemployment rate in South
Mississippi.
In 2007 Mississippi State Port Authority received $570 million
dollars in public assistance funding from the Department of Housing
and Urban Development (HUD) to rebuild the port from damages
incurred from Hurricane Katrina. The intent of the grant was to
secure the long-term operating capacity of the port that would
serve as a premise for job creation and economic development for
South Mississippi. The grant funding came with a caveat, however.
The port must double its 1,200 full-time equivalent jobs to 2,400
jobs within five years after the restoration program is
complete.
As mentioned earlier, economic development is a vital component
of the programming process. Mississippi Development Authority (MDA)
will lead the programming efforts to ensure that the successful
delivery of the PGRP meets any and all funding stipulations and
mandates.
History & Economic Overview of the Panama Canal
The Panama Canal has been an integral part of International
Trade and Commerce since its commissioning in 1914. The United
States Army Corps of Engineers stepped in and salvaged a failed
French attempt to properly design and construct the canal, which
occurred between 1881 and 1889. It took over a decade of overcoming
political upheaval and a threatening Columbian revolution, but the
US gained control and took over the original canal project in 1904.
After opening the canal, President Theodore Roosevelt called its
completion, the greatest achievement of his administration.
(Hawkins, 2006) The primary objectives of Roosevelts administration
were to provide a faster, safer route for cargo traffic from the
Atlantic and Pacific Oceans and to promote a stronger, more secure,
and more stable Panamanian Government. (Mann, 2007) The new canal
consisted of a series of channels, lakes, locks, and dams which
enabled vessels to cross the 80km wide Isthmus of Panama. (CE News,
2007) The United States maintained operations of the Canal until
December 31, 1999. The new millennium ushered in a paradigm shift
and transition in administering canal operations. For the first
time ever, the
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Panamanian Government had full jurisdiction and control over one
of the worlds most important water corridors. Since taking control,
the Panamanian Government has facilitated growth in every
measurable facet of canal operations. In fact, their leadership was
praised by the Organization of American States (OAS) in 2004. The
OAS expressed its praise for Panamas efficient administration of
the inter-oceanic waterway and for the countrys efforts to
modernize it. (OAS, 2004)
In October 2006, seventy-seven percent of Panamas citizens voted
to adopt a resolution that would allow the Panamanian Government
and the Autoridad del Canal de Panama (ACP), also known as the
Panama Canal Authority, to seek funding to design and construct a
major expansion to the Panama Canal. (CE News, 2007) The resolution
moved swiftly through the bureaucratic process. By April of 2007,
the Panama Canal Authority had finalized their plan and presented
it to then President Martin Torrijos Espino. He fully supported and
endorsed the plan. Subsequently, the National Assembly approved the
expansion project on July 17, 2007. This megaproject would become
the largest undertaking since the canal was originally constructed.
Conceptual estimates for the project topped $5.5 billion US
dollars.
The intent of the canal expansion was to serve a three-fold
purpose: 1) to create a new water transit lane by constructing two
new locks one at each entry; 2) provide widening and deepening at
each entrance; 3) widen and deepen the navigation channel at Gatun
Lake. These three objectives would facilitate more traffic and
accommodations for larger vessels, thus increasing the overall
revenue of the canal.
Not only did the Panamanian citizens and government see and hope
for the benefits, the rest of the international community did also.
The international community saw this as a chance for Panamanian
economic growth and for expansion in global trade. US Ambassador
Eaton commented: This is important to the US. Its important to our
economy The transit costs will be cheaper and that will have an
effect on the world market We welcome the expansion. (AP, 2006)
Furthermore, former Secretary of State Condoleezza Rice called
Panamanian Foreign Minister Lewis Navarro to congratulate and
commend the people of Panama on their decision to expand the
canal.
Major international relations were also solidified in December
2006 between the US and Panama when the US-Panama Free Trade Act
was signed. The Act secured the investments that the US had made in
Panama since 1904. The agreement ensured that all US investments
would be protected and that US firms would have the opportunity to
participate, on a competitive basis, to provide products and
services on the expansion project. (USTR, 2006)
Approximately thirty-seven percent of the worlds container fleet
is post-Panamax sized vessels. Panamax is a term used to describe a
ship that was designed to travel within parameters of the current
Panama Canal. Post-Panamax describes vessels that are too large to
traverse the current canal. With the size of container ships
growing ever so larger, the demand and need to accommodate these
ships became more apparent. As Figure 1.1 indicates, Panamax
vessels can
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carry up to 4,000 TEUs. The more modern vessels, or New Panamax
vessels, can carry up to 14,500 TEUs. (Container
Transportation)
Figure 1.1 Vessel Sizes
US Perspective on the Panama Canal Expansion
The ten top customers, in terms of countries, of the Panama
Canal are as follows: United States, China, Japan, Chile, South
Korea, Peru, Canada, Ecuador, Colombia, and Mexico. (ACP, 2007) As
a result of the US-Panama Free Trade Agreement and our mass
imports, the US is the Canals number one customer. The expansion
will further promote US commerce and investment throughout Panama
and Central America. In regards to trade, the ability to
accommodate larger vessels in a shorter timeframe will further
increase the amount of imports to the eastern and southern United
States, at lower unit prices. This will ultimately reduce the
end-users cost for such commodities. (Mann, 2007) This is a
paradigm shift of ironic proportions from what President Roosevelts
intentions were when he built the canal. His administration built
the canal in hopes that the United States would be the world leader
in exports to Asia. He wanted to be the number one customer for
different reasons. As is turns out, the United States ended up as
the worlds leader in imports; it is still the canals number one
customer, though. (Hawkins, 2006) The canal, just as it was in
1914, is still an extremely valuable thoroughfare for US imports
and exports. Other motives/strategic aims for the United States to
fully support the canal expansion was to ensure the ability to
transverse the canal with larger aircraft carriers during military
deployment operations.
As the potential for additional imports to arrive on the eastern
seaboard and in the Gulf of Mexico region, many United States ports
are preparing their ports in expectations of receiving such
additional cargo. South and East Coast ports are extremely keen on
the expansion. It will allow them to receive and handle larger
container throughputs. (Munn, 2007) Ports along the Atlantic and
Gulf Coasts have been scrambling to procure funding to upgrade
their facilities. An estimated $6 billion US dollars has been
allocated to ports from New York to Savannah, GA to
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make the necessary preparations. (CE News, 2007) The primary
issue at all ports is the depth of their channels. Post Panamax
vessels have draft depths up to 15 meters (49 feet). Most US ports
must deepen their channels to accommodate the Post-Panamax vessels.
Obtaining authorization for channel deepening is a painstaking
process that could take years, even decades to achieve. The US Army
Corps of Engineers oversee all applications for authorization.
Funding for such activities is usually sought at federal, state,
local, and even private levels. The secondary issue is the need to
upgrade ship-to-shore crane systems and inland storage/transit
facilities. Sujit CangaRetna, Senior Fiscal Analyst for the Council
of State Governments Southern Office, stated: Obviously, the
impetus is that ports are trying to get a piece of the action
because they see this incredible expansion in trade and exports.
They feel this is one way we can really stimulate growth, not just
at the port, but across the southeast region. (Capitol Ideas, 2012)
While the Atlantic and Gulf Coast ports are expanding and
preparing, West Coast ports arent conceding any business. (Capitol
Ideas, 2012) They are also upgrading facilities in efforts to
preserve and maintain current contracts and clients. See Figure 1.2
for North and South America port locations and sizes, based upon
2010 TEU throughput. This map provides a visual indication and
proximity relationship of major port locations to the Panama
isthmus.
Figure 1.2 North & South Americas Coastal Port Locations
Some southern ports are very optimistic about the potential
increases in cargo. Ted Houghton, former Texas Transportation
Commissioner stated: The Panama Canal expansion will have profound
impacts on job opportunities and economic development for Texas, as
well as solidify Texas as the trade corridor of this hemisphere for
decades to come. (Texas, 2006) As depicted in Figure 1.2, the Port
of Houston is the largest US port in the Gulf of Mexico.
In addition to the potential for additional trade, several US
firms have already become beneficiaries of the canal expansion
project. Under provisions of the 2006 US-Panama Free Trade
Agreement, US corporations were ensured the opportunity to compete
for design, engineering and construction contracts on the expansion
program. Design, engineering and construction management firms have
already procured several large contracts to provide services on the
canal expansion. New York based Parsons Brinkerhoff, was contracted
to write ACPs
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Master Plan that recommended the installation of the new
corridor and lock system. Aon Corporation, based in Chicago, landed
the contract become ACPs insurance broker and risk management
advisor. In 2007, URS, a Texas-based engineering firm, lead a
consortium group that procured the expansions Environmental
Assessment. (Munn, 2007) CH2MHILL, a Denver-based corporation, was
awarded a contract to augment the ACP with their Program Management
responsibilities.
2- INFORMATION/DATA COLLECTION APPROACH
Research for this paper culminated from a vast array of sources.
A series of peer-reviewed journal entries were obtained from the
Online USM Library and EBSCOhost databases. Keyword searches for
the Panama Canal Expansion, Panama Economy, and Panama Canal
Authority were conducted at both sites. Several periodical
publications on the same search parameters subjects were obtained
by utilizing Google Search Engine. All references found on the
reference page came from the below sources:
Table 2.1
Internet Searches Database URL Information/Keyword Search USM
Library www.encore.lib.usm.ed "Panama Canal Expansion" USM Library
www.encore.lib.usm.ed "Panama Economy" EBSCOhost
www.ehis.ebsohost.com "Panama Canal Authority" EBSCOhost
www.ehis.ebsohost.com "Panama Canal Expansion" Google
www.google.com "Panama Canal Expansion"
Furthermore, interviews were conducted with key personnel from
various organizations, to include the Panama Canal Authority and
Mississippi State Port Authority. The information collected was
used as a premise of organization, structure, and continuity for
the compilation of this paper. A key representative from the ACP
was interviewed on both the operations and expansion aspects of the
Panama Canal. Representatives from the Mississippi State Port
Authority were interviewed to establish the methods and programming
approaches on the PGRP. Finally, interviews were conducted on
CH2MHILL Project Managers at both the Panama Expansion and the Port
of Gulfport Restoration Programs.
Table 2.1 Scheduled Interviewees Interviews
Company
Person Panama Canal Authority (ACP) Larry Belkin, PM (ACP
Augmenter)
Panama Chamber of Commerce Dr. Albert White, Director of
Transportation & Logistics
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Mississippi State Port Authority (MSPA)
Jonathan Daniels, Executive Director Van Grundmann, Chief
Marketing Director
CH2MHILL Lon Elledge, Program Manager (PGRP)
Figure 2.1 2013 USM Study Abroad Program with Dr. Albert White,
Director of
Transportation & Logistics for the Panama Chamber of
Commerce
3 - CASE STUDIES
Case Study 1
Impact of the Canal Expansion on the Panamanian Economy
A study conducted in 1972 indicated that there were 15,348
transits through the canal. This produced nearly $100 million in
revenue from tolls. The average vessel paid approximately $6,500 in
passage fares. The canal payroll alone that year totaled over $120
million and was divided equally between US and Panamanian workers.
Payroll alone was more than the revenue. Although transportation
companies benefited from the canal, it was not paying dividends for
the local economy. This process was the norm for decades and the
local economy continued to struggle as a result. Panama wasnt able
to overcome the negative economical impacts that the canal burdened
the country with.
As noted previously, one of the US primary reasons for
constructing the canal and eventually handing it over to the
Panamanian Government, was to promote the stability and
independence of their country. For decades, the Panamanian people
struggled for economic growth and free trade independence. As late
as 2001, up to thirty-seven percent of the population lived under
the poverty line. Seventeen percent lived on an income of less than
$2 US dollars per day. (Gonzalez, 2006) These statistics are a
prime indication of a potential social reformation, which by all
means promoted regional instability. However, since then, the canal
has proved to be an
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invaluable source of substantial revenue for the country. When
appropriated correctly, these revenue figures can sustain and
promote economic growth of the entire country.
Since the handover in 2000, the ACP has shifted its business
approach from not-for-profit to a market-oriented business model.
Their model is focused on service and reliability. This model has
served the local economy well. The future economic outlook for
Panama is tremendous. The canal serves as a sustainable resource
for revenue, far better than any diminishable commodity.
(LuvPanama) According to the ACP, the $5.25 Billion dollar
expansion price tag will be picked up directly by the canals
customers and will not negatively affect the Panamanian economy. In
fact, it will have the adverse affectpositive growth.
The Panama Canal has five strategic marketing points that are
irrefutable to international oceanic transportation:
1) Fuel costs are expensive and will continue to rise. 2) It is
an extra 7,900 miles of wear and tear on vessels to traverse around
the southern
tip of South America, Cape Hope. 3) The route around Cape Hope
is perilous. It is one of the most dangerous sea routes in
the world. Maritime insurance providers frown upon writing
policies for vessels traveling that route; when carriers issue
policies, they are too expensive.
4) Travel time is shorter. It takes an additional 22 days to
sail from San Francisco to New York via Cape Hope as opposed to
traversing the Panama Canal.
5) The environmental public relations image of companies sailing
around the Cape will have a negative effect. They leave a larger
carbon footprint. Mitigation and remediation costs of any accident
in the treacherous waters would be insurmountable to overcome.
Figure 3.1 Trade Route Options
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As long as canal tolls remain under the cumulative cost of these
five conditions, it will forever remain the only viable and
reasonable option. The current rate for using the canal is upwards
of $350,000 per transit. Recall that in 1972, it was $6,500.
Researchers have indicated that the canal could potentially double
that fee and it would still be less expensive to use the canal over
sailing around Cape Hope. (LuvPanama)
ACP has turned the tide so much, that in 2010 the canal
operations earned nearly $300 billion USD in revenue, of which $800
million was profit. Upon the expansion completion in 2015, yearly
profits are projected to top $2 billion. No other country in
Central America has that bright of an economic future. It is
projected that Panamas Gross Domestic Product will double within
eight years of the expansion completion; triple within twenty
years. (LuvPanama)
An onsite interview was conducted with Dr. Albert White,
Director of Transportation & Logistics for the Panama Chamber
of Commerce. Dr. White emphasized that the revenue from the canal
contributes to approximately thirty percent of the annual
Panamanian Gross Domestic Product. Dr. White further commented, The
canal is a cherished, non-depleting commodity to our country.
Case Study 2
Programming Comparisons
A. Funding/Economic Development In 2009, Mississippi State Port
Authority adopted a vision plan to not only restore the port, but
build a better, a more suitable venue that would provide transit
space and facilities for current and future tenants. In order to
meet the stipulation of the HUD grant, MSPAs market strategies are
twofold: 1) maintain and support the growth and development of its
current tenants 2) provide marketable area(s) that would attract
new tenants. Whichever approach is taken, the overall approach is
to increase container throughput and/or bulk cargo tonnage.
Increase in either operation would produce new jobs. The current
annual container throughput is 212,000 TEUs. According to the
current master plan, the port will be able to facilitate up to 1
million TEUs by 2018 to help meet the job creation mandate. This
throughput will be comparable to the Port of Cristobals 750,000
annual TEU throughput. Cristobal is located in the Colon Free Trade
Zone, just outside the Atlantic Lock of the Panama Canal.
The current marketing approach for attracting a new maritime
tenant is to provide a 50-acre site located on the southern end of
the West Pier with dedicated wharf frontage for birthing and an
intermodal facility, complete with road and rail access. These
accommodations would easily attract a high-capacity container
tenant or large-tonnage bulk operator. Another non-maritime site is
being developed on the North Harbor. This 23-acre site could be
utilized as a public retail area, warehouse distribution facility,
or even an entertainment venue. Any jobs created by these
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non-maritime operations would also count toward the jobs
creation mandate. The only exclusion for jobs creation is through
the development of gaming operations and revenues.
As mentioned earlier, the Panama Canal Expansion is financed
through a public referendum to publically finance the program. In
its simplest form, financing has to be repaid with interest. A
consortium of global banks served as lenders to the Panamanian
government. The Panama Canal Authority compiled a stable business
plan that was accepted as financially feasible and stable to the
lending consortium. The canal revenues are projected to cover the
debt as well as support the Panamanian economy. This is in contrast
to the publically funded PGRP. The public funds were made available
and allocated by HUD with the stipulation of job creation, not
payback.
B. Master Planning The master planning process for both programs
began with a conceptual vision plan. Each plan was intended to be
dynamic and continually updated as economic, engineering, and
political environments change. Parsons Brinkerhoff developed the
master plan for the canal expansion, which included doubling the
transit capacity and accommodating larger vessels. The premise of
the plan was to establish new traffic lanes and new lock systems
(referred to as Third Set of Locks) positioned at each end of the
canal. The new Pacific Locks will be located just southwest of the
current Miraflores Locks and the new Atlantic Locks will be located
east of the Gatun Locks. Furthermore, extensive dredging will be
required at each entry and at various locations along the canal to
allow for deeper draft vessels. Another major consideration of the
master plan was to ensure that current canal operations were not
interrupted during the expansion program. The Master Plan was
adopted and implemented through a government referendum and
accepted proposal in April, 2006 (ACP).
Figure 3.2 depicts conceptual renderings of the Third Set of
Locks Project. This arrangement will be constructed at each end of
the canal.
Figure 3.2 Renderings of New Locks
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The Ports and Maritime Group at CH2MHILL, a Denver-based design
firm, developed the Master Plan for the Port of Gulfport
Restoration Program. The initial plan was submitted as a 10-Year
Work Plan that provided for a high-capacity stacked container
terminal, capable of handling up to two million TEUs per year. It
included provisions for remediating the Port from damages incurred
by Hurricane Katrina in 2005 and completing an already active fill
project that was destroyed by the storm. It also entailed
performing environmental assessments, permitting, and design and
construction of a 160 acre expansion directly south of the existing
ports west pier. Additional activities of the master plan included
design and construction of an intermodal facility, new tenant
transit facilities, and reinforcing the current wharf structure to
accommodate new rail-mounted gantry cranes. The final aspect of the
original plan was to deepen the ports navigational channel to 45
feet. The Master Plan was adopted by MSPA and Mississippi
Development Authority in April, 2009. The Executive Summary of the
Master Plan is as follows:
To facilitate the restoration of the Port and related public
infrastructure and facilities, to mitigate future storm damages,
and to provide long-term recovery of the Port operating capacity,
while providing a platform for a sustainable recovery of the
Mississippi Gulf Coast. The direct goals are to position the Port
as the leading container port on the Gulf of Mexico for the next
100 years and to create well-paying jobs for South Mississippi
residents.
The plan was developed to be adaptable to the changing market
conditions and port tenant requirements. The 10-Year Work Plan had
a program budget of $1.6 billion dollars. Currently, only the $570
million HUD funding has been allocated, subsequently scaling back
the Master Plan. Concessions included dropping the design and
construction of the future expansion, deepening the channel, and
scaling back the TEU capacity. Environmental assessments and
permitting for those activities remain tasks under the current
plan. The Master Plan was officially amended and renamed the PGRP
Implementation Plan in August, 2010. The Implementation Plan
reflected only activities that could be supported with the
respective funding. Activities were limited to the ports west pier
and portions of the north harbor. The current plan is shown below
in Figure 3.2 and allows for approximately 73 acres of terminal
space for new tenant development, or in payback termsjob creation.
A conceptual rendering is shown in Figure 3.3.
Figure 3.3 West Pier Tenant Layout
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C. Engineering Both programs are faced with major engineering
challenges, which in return could produce major engineering
accomplishments. After each master plan was adopted, each
respective owner contracted some of the worlds best engineering
firms to lead design and engineering efforts.
Panama used a design-build model to tackle the Third Set of
Locks at each end of the canal. The design-build contract was
awarded to a consortuim, or joint-venture, of four construction and
engineering firms in July, 2009 in the amount of $3.2 billion
dollars. The consortium consists of Sacyr Vallehermoso, Impregilo,
Jan De Nul, and CUSA. The notice to proceed was issued on on August
25, 2009. The main purpose for adopting the design-build model was
to fast-track the various construction packages that each lock
entails. This format allows the engineering teams to complete a
certain design package and instantly turn it over to their
construction counterparts, without any procurement delays. It also
provides for continual continuity and communication between design
and construction. This approach also minized the amount of entities
contracted directly with the ACP. (ACP)
One of the many engineering feats on the canal expansion was to
utilize sliding gates in lieu of the traditional hinged gates that
are being used on the current locks. The sliding gates allow for a
faster operation of the lock systems and provide a more water-tight
seal. Extensive mechanical engineering and hydraulic analyses were
required to design the sliding gates. Figure 3.5 shows the sliding
gates being manufactured by Cimolai, a metal fabrication company in
Italy. Refer back to Figure 3.2 for a conceptual depction of the
operable sliding gates.
Figure 3.4 West Pier Rendering
Figure 3.5 New Gates under Construction
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The PGRP program is taking a more traditional approach to the
engineering model, design-bid-build. MSPA has contracted more than
a dozen engineering consulting firms to design the various aspects
of the program. Speciality designers include coastal, geotechnical,
civil, electrical, marine, structural, and mechanical engineers.
Other consultants were contracted to perform environmental and
permitting assessments. Because of this model, time allocation is
built into the program schedule to allow for procurement of
construction contracts.
One of the main hurdles in engineering the port restoration was
to protect port assests from future storm damage. The decided
approach was to elevate the entire west pier from an average
elevation of +8 mean sea level (MSL) to +13 MSL and extensively
protect the shorelines with armor stone. Other major engineering
hurdles included retrofitting an antiquated wharf structure to
adequately hold new rail-mounted gantry cranes. Extensive research
was undertaken to deternime the existing conditions below the
wharf.
Finally, there were significant geotechnical investigations and
engineering on an open-water fill project that added 24 acres of
new land to the west pier. The design included marine dredging
operations to create a fill prism that vertexed at -20 MSL. The
intent of the design was to place sand fill in lifts as to not
displace the underlying soft clays. The initial geotech report
showed soft clays as deep as -40MSL. Significant efforts were made
in both design and construction as to limit the amount of mud
displacement, while creating a suitabale foundation for future
structures. The left side of Figure 3.6 shows the fill and
shoreline protection being applied on 24 Acre Project.
D. Construction As stated earlier, the majority of construction
at the canal expansion was directly tied in with the design-build
contract for both lock systems. However, other construction only
contracts were awarded for large excavation and fill projects. A
deepening and widening project to the Pacific
Figure 3.6 Aerial Photo of Port of Gulfport (June 2013)
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entrance of the canal was awarded to Dredging International in
April, 2008 for $178 million. The contract stipulated that 8.7
million cubic meters of material be dredged and removed from the
project site. There are roughly ten other similar stand-alone
construction projects throughout the program.
An important aspect of publically funded/financed construction
projects is jobs creation. The table below, Table 3.1, shows that
as of September, 2012, over 27,000 direct construction jobs have
been created due to the canal expansion.
Table 3.1 - Job Creation Log (Panama Canal Expansion)
In contrast to the design-build approach taken by the ACP all
construction contracts on the PGRP have been awarded via the
design-bid-build delivery method. The current programming forecast
requires seventeen independent construction projects to complete
the program. An independent construction manager was hired by MSPA
to oversee all field construction activities and coordinate
logistics with the respective engineer of record. Table 3.2 lists
each of the seventeen construction projects associated with the
port program.
Table 3.2 PGRP Construction Projects
1 North Harbor Demolition 10 Infrastructure Phase 12 60 Acre
Fill 11 Infrastructure Phase 23 24 Acre Dredge 12 Infrastructure
Phase 34 24 Acre Fill 13 Crowley - North Harbor5 Plus 25 Fill,
Phase 1 14 North Harbor Clean Up6 West Pier PVD Completion 15 Port
Equipment7 IDIQ Fill Projects 16 Tenant Facilities8 Wharf Crane
Rail Upgrades 17 Port Operations Building9 West Pier Shore
Protection
PGRP Construction Projects
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To date, the PGRP has generated 204 construction related jobs.
These jobs are independent of and do not could toward the 1,200
permanent jobs that must be created due to funding
stipulations.
E. Sustainability Both programs are actively pursing ways to
eliminate construction and operational waste, reduce the carbon
footprint, and construct facilities with low operational overheads.
The canal expansion has adopted every environmental standard and
best practice imaginable, from reforestation, to an extensive
archaeological rescue policy, to water efficient lock designs. In
keeping with sustainable development principles, the canal will use
unique water-saving basins to help mitigate the loss of water due
to lock operations. Figure 3.7 is a conceptual rendering of how the
new locks will generate a 7% water savings over the existing locks.
Although outside the canal expansion scope, it is of interest to
note that the entire Panamanian community has adopted various
sustainable practices. The City of Knowledge, located next to the
Miraflores Locks, recently commissioned a Leadership in Energy
& Environmental Design (LEED) Platinum dormitory facility.
The PGRP is also taking steps to promote green construction.
MSPA will implement a series of photovoltaic cell arrays on the
roof structures of the tenant transit facilities that provides
power to site lighting and various other electrical components,
therefore reducing the energy demand from the local power
authority. Also, MSPA is exploring the feasibility of registering
their new Port Operations building as a LEED Silver/Gold project.
F. Scheduling Both programs track the schedule progress and
budgeted costs using a Critical Path Method scheduling method. A
cost-loaded schedule is kept and maintained on all program
activities and checked against an Earned Value Measurement. Both
programs utilize a combination of MS
Figure 3.7 - Cross Section of New Lock
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Project and Primavera P6 software. All critical activities
should be complete on the canal expansion by the second quarter of
2015. See Figure 3.8 for a Gantt chart showing the expansion
critical path. Figure 3.9 reflects a work breakdown structure,
level 2 of the PGRP and shows the program obtaining final
completion by the third quarter of 2016.
Figure 3.8 - Panama Canal Master Program Schedule
Figure 3.9 - PGRP Master Program Schedule
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4 RESULTS & RESULTS IMPACTS
The only distinct difference observed in programming activities
was the project delivery method. The Panama Canal Authority was
able to utilize a design-build delivery method to fast track the
individual projects, therefore the overall program. Mississippi
State Port Authority delivers its projects in more of a linear, or
traditional, delivery method. Mississippi contract procurement laws
have impeded the Ports ability to procure and award design-build
contracts. Three notable impacts were identified from studying and
observing the different programming functions.
1. Regardless of language, cultural, and geographic barriers,
basic programming techniques were applied similarly.
2. Always explore the various options for a project delivery
method that best suits the needs of the program.
3. Economic development, especially as it relates to job
creation is equally important in each region.
Table 4.1 shows the major differences and comparable
similarities between the two programs.
Comparison Category ACP (Panama Canal Expansion)
MSPA (Port of Gulfport Restoration Program)
Funding/Economic Development
Financed; Pay Back with Interest
Funded; Jobs Creation Stipulation
Master Planning Third Set of Locks & Dredging Projects West
Pier Development; 73 Acres for New Development
Design Design-Build for Locks;
Typical Design Delivery for Dredging & Excavation
Independent Design Consultants
Construction 1 Large DB Contract and Various DBB Contracts;
27,000 Jobs Created
17 Independent DBB Contracts; 204 Jobs Created
Sustainability Water Efficient Locks,
Reforestation, Archaeological Preservation
PV Cell Array, LEED Ops Building
Scheduling CPM; 2015 Completion CPM; 2015 Substantial
Completion
Table 4.1 Comparison Chart
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5 SUMMARY Despite of the differing geographical locations and
cultural differences, each of the six programming aspects measured
proved to have comparable means and methods and comparable results.
Each program has to repay the funding, one way or another. Each has
a feasible plan to do so. Job creation is a major concern for each.
Both programs have adopted sustainable design and construction
practices. Both programs rely on CPM scheduling for progress and
budget tracking.
It was a pleasure exploring the different programming functions
at each location. By comparing the two against each other, it
helped identify common practices in global engineering and
construction industry. It also brought to light that each regions
public policy may hinder the ability to procure projects through a
certain delivery method. The design-build delivery method is
accepted exclusively in Panama and is working well on each of the
new locks. Design-build is also common in the United States, but
could have different restrictions in each state.
Finally, the implications and impacts of programs of this
magnitude reach far beyond the engineering and construction
industry. The whole premise and purpose of each program was to
ensure economic development and growth in the global transportation
market, while facilitating invaluable employment opportunities both
interim and long-term.
6 -REFERENCES (ACP, 2007) ACP. The Panama Canal An Overview.
Available at
http://www.panacanal.com/eng/plan/documentsos/propuesta/acp-panama-canal-an-overview.pdf
(Capitol Ideas, 2012) Capitol Ideas, March/April 2012, Hot Topics:
Ports in Transportation.
http://www.csg.org/pubs/capitolideas/Mar_Apr_2012/Mar_Apr_2012_images/CIMarApr12.pdf
(CE News, 2007) Civil Engineering News, January 2007
(Hawkins, 2006) William R. Hawkins, Panama as a Bellweather of
U.S. Fortunes: The Storm Gathers, American Economic Alert, 4
November 2006, available at
http://www.americaneconomicalert.org/view_art.asp?Prod_ID=25923
(LuvPanama) #38. Economic Impact of the 2014 Canal Expansion on
Panama's Future, available at
http://www.luvpanama.com/economic-impact-of-the-2014-canal-expansion.html
(Mann, 2007) Carlos G. Mann, The Panama Canal Expansion Project:
US Interests and Other Considerations, ISA, Chicago, 28 February
2007
(OAS, 2004) Organization of America States, Permanent Council,
Commemoration of the Twenty-Fifth Anniversary of the Entry Into
Force of the Torrijos-Carter Treaties on the Panama Canal, CP/DEC.
27 (1446/04), 29 September 2004, available at
http://www.oas.org/council/resolutions/dec27.asp
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(Texas, 2006) New Study Looks at Panama Canal Expansions Effect
on Texas Transportation. Texas Department of Transportation press
release, 28 November 2006, available at
http://www.dot.texas.tx.us/news/029-2006.htm
(USTR, 2006) Office of the United States Trade Representative,
Trade Facts Free Trade with Panama, 19 December 2006, available at
http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2006/asset_upload_file138_10233.pdf