The Panama Canal is one of the most advanced, high-profile engineering projects ever undertaken. For the first time since its construction in 1914, the canal's operators are planning to widen and deepen the 77km-long waterway to accommodate the new generation of ocean-going cargo vessels which navigate the world's seas today.
Written By: Stephen Wingrove
Source: Business News Americas
Complete Story
The Panama Canal is one of the most advanced, high-profile engineering projects ever undertaken. For the first time since its construction in 1914, the canal's operators are planning to widen and deepen the 77km-long waterway to accommodate the new generation of ocean-going cargo vessels which navigate the world's seas today.
BNamericas spoke to Cesar Gazoni, construction and trade director for Colombia, Venezuela, Panama, and Suriname at Brazilian engineering and construction giant Camargo Correâ. Gazoni is responsible for coordinating the company's participation in a consortium along with Andrade Gutierrez and Queiroz Galvão aiming to win the rights to restructure the ship canal.
BNamericas: Could you provide an outline of the planned Panama Canal expansion project?
Gazoni: The expansion of the Panama Canal basically consists of a number of licenses on work for the widening and the deepening of the existing canal. There is dredging work and the construction of two locks to increase current capacity.
The work is needed now because post-Panama ships are much bigger than those in use when the canal was originally built. Structures are needed which can handle the size of the new ships.
For the canal, this is of interest because it means that it can attend to other, bigger clients and continue being a strategic traversing point between two oceans and a reference for global navigation.
BNamericas: Why do you believe that you, along with Andrade Gutierrez and Queiroz Galvão, can win against the other large construction firms with which you will be bidding?
Gazoni: Obviously, I can't be arrogant and say we will win. The only thing I can confirm is that we have the experience - we at the three companies, but principally at Camargo Corrêa, are working on other projects that involve locks.
You can compare these to structures that are very similar, such as big concrete-based projects like hydroelectric power stations, because at the end of the day, a lock is a large-scale project in concrete that will take a lot of electro-mechanical equipment like that used on the large hydroelectric projects. So we have expertise in large-scale projects and we are sure that we will make a competitive offer.
We will enter in a competitive manner and try to win at least one of the lots, within the licensing process, that we feel we can cover.
BNamericas: Which of the lots will the consortium be concentrating its efforts on?
Gazoni: Obviously, we could enter in almost all of the lots. What we cannot bid for are the dredging lots because for this type of service, there are specialized, world-class companies. But for the digging work - dry digging and underwater digging - as well as the work on the locks - structures using reinforced concrete - we are eligible because we have experience in this type of work.
BNamericas: What does the project mean for you as a company and a consortium?
Gazoni: The Panama Canal expansion project represents an opportunity, and also a challenge, for the consortium and specifically for Camargo Corrêa.
It is an opportunity because our consortium has the necessary experience to participate in this type of work, and a challenge because we are talking about an enormous project here - worth more than US$5bn!
The lot to build the locks specifically is worth US$3.3bn. So this is a challenge in terms of logistics and resource supply. When I say resources, I mean the labor force, equipment and the necessary materials on this enormous expansion project.
BNamericas: Why do you believe that Andrade Gutierrez and Queiroz Galvão are your best partners in the consortium for this project?
Gazoni: You always make up a consortium bringing together experience and dividing the risks. If you are talking of a project worth billions of dollars, you have the two factors present. You have the need to bring together experience because the competitors are global at this level. At the same time we are dividing the risks because the project is enormous. In this case, we are putting together a group that is extremely competitive.
BNamericas: Will Odebrecht participate as well?
Gazoni: I cannot speak for Odebrecht, but they are looking to take part. We haven't formed a consortium with them, but they are certainly looking for a way in. And not just Odebrecht, but other European, Asian and American groups are all looking to get into the project because it represents such a challenge and is very high-profile.
The big groups around the world are preparing to be able to participate in the bidding. It's a project dealing with one of the best-known engineering projects in the world and obviously the companies that win the contracts and are licensed will achieve a high level of global visibility.
BNamericas: Do you think that the fact that your consortium is Latin American-based will have a bearing on the decision in your favor?
Gazoni: I don't believe that the fact that we are Latin American will have any relevance. I believe that the client is looking firstly for experience and secondly for competitive prices. So I would say that from my understanding, the nationality of the participants will not make any difference. What matters will be proven experience and competitiveness.
BNamericas: How will the financing of the project function?
Gazoni: The financing of this project will be undertaken completely by the Panama Canal Authority (ACP). It is contracting its financial advisers and it should seal a package for this project on its own.
BNamericas: When will the work start on the project?
Gazoni: According to the published timeline for the project, there are a lot of things being agreed upon in 2007, and some of the digging work should even take place this year. There may even be work starting on the widening and deepening of the canal.
However, the big contracts are the locks contracts. These contracts for engineering and construction should be starting in the second quarter of 2008. At least this is what has been defined by the client and we are preparing for the bidding as if we are victors and are preparing to start work within the timeline defined by the client.
BIOGRAPHY:
José Cesar Gazoni Martins graduated in civil engineering from the University of Campinas. The majority of his professional life has been spent with Camargo Corrêa where he is currently construction and trade director for Colombia, Venezuela, Panama, and Suriname. Whilst at the company, he has coordinated the construction of the US$450mn Porce III hydroelectric power plant in Colombia and the redevelopment of the El Guapo dam in Venezuela.
ABOUT THE COMPANY:
Camargo Corrêa is one of Brazil's largest corporate groups. Having started 66 years ago as a small construction company, today it employs over 30,000 people. It operates in the engineering and construction, cement, footwear, steel, environmental management and textile sectors as well as in energy and highway concessions.
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