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The Panama Canal Authority; the Business of Managing the Panama Canal

The Panama Canal Authority (ACP, Autoridad del Canal de Panamá) is the autonomous branch of the Panamanian government that manages the Panama Canal. Set up as a result of the 1977 Panama Canal Treaty ACP took over management of the Panama Canal from the Panama Canal Commission, a joint commission of the United States and Panamanian governments in 1997. ACP is financially autonomous.

According to the ACP web site, "An Administrator and a Deputy Administrator head the ACP under the supervision of an 11-member Board of Directors. The Administrator is the highest-ranking executive officer and legal representative of the Authority, and is responsible for its administration and the implementation of the policies and decisions of the Board of Directors. The Administrator is appointed for a seven-year term, and may be re-elected for an additional term."

Of the board of directors nine are appointed by the President of Panama with consent of the Cabinet Council and ratified by a majority of the unicameral legislature. One member is chosen by the legislative assembly. The eleventh member is chosen by the President. This member chairs the Board of Directors and has a ministerial rank of Minister of State for Canal Affairs.

Terms of the members of the board of directors, starting with the first appointees, overlap. The express purpose is to ensure independence from succeeding government administrations. The ACP web site states that, "The Panama Canal constitutes an inalienable patrimony of the Republic of Panama; therefore, it may not be sold, assigned, mortgaged, or otherwise encumbered or transferred. The legal framework of the Panama Canal Authority has the fundamental objective of preserving the conditions for the Canal to always remain an enterprise for the peaceful and uninterrupted service of the maritime community, international trade, and the Republic of Panama."

The Panama Canal

The Panama Canal is the system of man made channels, locks, dams, and artificial lakes that connect the Pacific Ocean to the Atlantic Ocean across the Isthmus of Panama. Since its completion in 1914 the Panama Canal has allowed shipping to cross the fifty mile wide isthmus at the narrowest part of the Americas. The Panama Canal locks allow ships to enter the system from either ocean and to be raised to the level of artificial Lake Gatun, 26 meters above sea level, to transit central Panama before being lowered to sea level on the other side.

Construction of the Panama Canal included damming the Chagras River (Gatun Dam) so that a central valley filled with runoff from Panama's tropical rains thus forming Lake Gatun. In addition a 7.8 mile long, manmade valley was blasted and dug through a ridge in the mountains of central Panama to connect Lake Gatun with the Pacific side of the canal system. This valley is known as the Gaillard Cut or Culebra Cut.

The Panama Canal allows ships to avoid the Drake Passage around Cape Horn at the tip of South America saving up to 8000 miles for shipping that originates north of the canal.

Current passage time is about 9 hours. In 2007, 312 million tons of commercial shipping passed through the Panama Canal in 13,223 ships or about 36 container ships a day.

The Work of the Panama Canal Authority

The Panama Canal Authority maintains the fifty mile stretch of locks, dredged lake and sea bed, and channels that constitute the Panama Canal. Ship traffic is monitored by radar, cameras, and patrol boats. Ships slots for passage are booked long in advance and all boats passing through the Panama Canal have a Panamanian employee of the Panama Canal Authority at the helm.

ACP runs one of the world's largest watershed management projects. The central lake, Gatun, across which ship traffic passes, is an artificial lake caused by the damming of the Chagres River by the Gatun Dam. Power to run all aspects of the Panama Canal Authority is generated by the Gatun dam with excess electricity sold at a profit.

The locks of the Panama Canal are filled with water running down from Lake Gatun. ACP maintains three dams besides Gatun in order to keep a reserve supply of water for Panama's dry season. In addition to keeping the Panama Canal running water from Lake Gatun and Chagres watershed supplies 95% of the drinking water for Panama City, Colon, San Miguelito, and, soon, La Chorrera. This is drinking water for well over a million people.

Panama Canal Authority and the Panama Canal Expansion

In 2007 the Panama Canal Authority started the Panama Canal Expansion project. This more than $5 billion, ten year project will build another set of larger locks on both ends of the Panama Canal as well as widen and deepen shipping channels. It is expected that Panama Canal traffic will double with the conclusion of the expansion. Much larger ships will be admitted to the Panama Canal and with continually rising fuel prices ACP expects more boats to choose to pay the toll to pass through the Panama Canal instead of rounding Cape Horn at the tip of South America.

Panama views the Panama Canal as an Inheritance and the Panama Canal Authority is its trustee. The autonomy of ACP guarantees that funds will not be siphoned away by other government projects but will go towards maintenance and improvement of the Panama Canal.

PanCanal-General