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| Citation |
- Permanent Link:
- http://ufdc.ufl.edu/AA00006086/00001
Material Information
- Title:
- Interoceanic canal studies, 1970
- Creator:
- United States -- Atlantic-Pacific Interoceanic Canal Study Commission
United States -- Army. -- Corps of Engineers. -- Jacksonville District
- Place of Publication:
- Washington, D.C.
- Publisher:
- U.S. G.P.O.
- Publication Date:
- 1971
- Language:
- English
- Physical Description:
- 1024 p. (various pagings) : illus., maps (part col.) ; 28 cm.
Subjects
- Subjects / Keywords:
- Canals, Interoceanic ( lcsh )
- Genre:
- bibliography ( marcgt )
federal government publication ( marcgt )
Correspondence ( lcgft )
Notes
- Bibliography:
- Includes bibliographical references.
- General Note:
- Includes Annexes 1-5.
Record Information
- Source Institution:
- University of Florida
- Holding Location:
- University of Florida
- Rights Management:
- This item is a work of the U.S. federal government and not protected by copyright pursuant to 17 U.S.C. §105.
- Resource Identifier:
- 00143341 ( OCLC )
78611485 ( LCCN )
ocm00143341
AA00006086_00001 ( sobekcm )
20300852 ( ALEPH )
- Classification:
- TC773 .U23 ( lcc )
627/.13/09728 ( ddc )
Aggregation Information
- DLOC1:
- Digital Library of the Caribbean
- PCM:
- Panama and the Canal
- IUF:
- University of Florida
- IUFGOV:
- Centers of Excellence at UF
- VENDORIA:
- Internet Archive
- UFPANCAN:
- Documents of the Panama Canal
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a INTEROCEANIC
CANAL STUDIES 1970
_ Atlantic-Pacific Interoceanic or
sae LY, Commission |
Digitized by the Internet Archive
in 2011 with funding from
University of Florida, George A. Smathers Libraries with support from LYRASIS and the Sloan Foundation
http://www.archive.org/details/interoceaniccana0Ounit
Y2.At. 6: 1/970
ATLANTIC-PACIFIC INTEROCEANIC CANAL STUDY COMMISSION
726 JACKSON PLACE, N.W.
WASHINGTON, D.C. 20506
December 1, 1970
The President
The White House
Washington, D. C.
Dear Mr. President:
We have the honor to submit herewith the final report of the Atlantic-
Pacific Interoceanic Canal Study Commission as required by Public Law
88-609, 88th Congress, as amended.
One provision of the law required us to determine the practicability
of nuclear canal excavation. Unfortunately, neither the technical
feasibility nor the international acceptability of such an application of
nuclear excavation technology has been established at this date. It is not
possible to foresee the future progress of the technology or to determine
when international agreements can be effectuated that would permit its use
in the construction of an interoceanic canal. Hence, although we are
confident that someday nuclear explosions will be used in a wide variety
of massive earth-moving projects, no current decision on United States
canal policy should be made in the expectation that nuclear excavation
technology will be available for canal construction.
The construction of a sea-level canal by conventional means is
physically feasible. The most suitable site for such a canal is on Route 10
in the Republic of Panama. Its construction cost would be approximately
$2.88 billion at 1970 price levels. Amortization of this cost from toll
revenues may or may not be possible, depending on the growth in traffic,
the time when the canal becomes operative, the interest rate on the
indebtedness, and payments to the host country. We believe that the
potential national defense and foreign policy benefits to the United States
justify acceptance of a substantial financial risk.
As a first step, we urge that the United States negotiate with Panama
a treaty that provides for a unified canal system, comprising both the
existing canal and a sea-level canal on Route 10, to be operated and
defended under the effective control of the United States with participation
by Panama.
If suitable treaty arrangements are negotiated and ratified and if the
requisite funds can then be made available, we recommend that construction
of a sea-level canal be initiated on Route 10 no later than 15 years in
advance of the probable date when traffic through the present canal will
reach its transit capacity. Current trends indicate that this will be near
the end of this century; the specific year can be projected with increasing
confidence as it draws nearer.
We recognize, however, that the President of the United States and
the Congress will continue to face many serious funding problems and
must establish the relative priorities of the requirements for defense,
welfare, pollution, civil rights, crime, and other problems in social
undertakings then existing.
We specifically recommend that, when the rights and obligations
of the United States under new treaties with Panama are determined, the
President reevaluate the need and desirability for additional canal
capacity in the light of canal traffic and other developments subsequent
to 1970, and take such further steps in planning the construction of a
sea-level canal on Route 10 as are then deemed appropriate.
Respectfully,
Robert G. Storey Milton S. Eisenhower
iene VAT A
Kenneth E. Fields Raymond A, Hill
Kiba IO COSHES
Robert B. Anderson, Chairman
CONTENTS
Page
Chapter sINGRO DW GIMON) sso ee eee se ele edt, De te SEIS. DO. 1
Chapter II - ISTHMIAN CANAL INTERESTS OF THE UNITED
STPAMESSANDIO THE RINATIONS:, 2285 9 0 7
Chapter III - POTENTIAL CANAL TRAFFIC AND REVENUES ................ 17
Chapter IV — EXCAVATION BY NUCLEAR METHODS ...................... 33
Chapter GENE RAMI CRIME RTA Ws fan oo see ee See oe 47
Chapter VI - ENVIRONMENTAL CONSIDERATIONS ....................... 59
Chapter Vile SANA YSISIORSALLERNATIVESISeeeeeeeeee een ore 63
Chhavoniere WAIL — TSIINPAINICHAUL, T3BVNSIIBIULINIDS 5565055000000 000000000000000c0000 89
Chapter IX — MANAGEMENT OF SEA-LEVEL CANAL CON-
SPRUGHONVANDIORERATION, —... Rae eee eerie. Sai ay es 101
Chapter X — CONCLUSIONS AND RECOMMENDATIONS .................... 105
Enclosure 1 — Commission Authorizing Legislation ......................... 113
Enclosure 2 — Report by the Technical Associates for Geology,
Sloperstabilityaandshoundationsie eee ae interne nee 117
Enclosure 3 — Atomic Energy Commission Views on Develop-
MenwoMmNuclamexcavationmechnolosvanaane ee ereee eee nne en eee ee 27
ANNEXES
ANNEX I — STUDY OF FOREIGN POLICY CONSIDERATIONS
ANNEX II — STUDY OF NATIONAL DEFENSE ASPECTS
ANNEX IIT — STUDY OF CANAL FINANCE
ANNEXIV — STUDY OF INTEROCEANIC AND INTERCOASTAL SHIPPING
ANNEX V — STUDY OF ENGINEERING FEASIBILITY
List of Tables
Table Page
1) ‘Canal Routes Selected for Commissioninvestigation) 25 4-— 4 ene eee 5
2 ‘Panama CanaliWsers: FiscaliViear 1969) enn oe oe ee eee 15
3 Commercial Ocean Transits of an Isthmian Canal
Relative! to\€ommerciali@cean Carsonny cates eine | oer eee 20
4. (Growth. of Panama:Camnall Tiraificysie.5 4. 6 anos sere nO ae eee eee 22
5: Influence'of Japan Trade.tas 24se8 SBA Ano feeds ee ae Ast Ae eee 22
6 Cargo Tonnage Forecasts for an Unrestricted
Isthmian: Canal _ 5.0 5 capa nqtheeee eo oe Bea ae ae al AP eee 28
7 Averace DWT Projectionsy 6.4). c a. dares ue a ee donna so eee eee 25
88 Projected Sea=eveliCanal Mransits) 4.) sea acces okie See eee 26
9 Estimated Sea-Level Canal Revenue Relative to
Total Gatgo Tonnage. 5.5 ose e Poe ee dee ee ee ee eee 29
N@ ITReneeasis Ot Seas lLewell (Camel IRQWEMNUIES, coonecaconaooadaadonedbasoneceauoe 29
1) Forecast Propontionsjof super shipsanithe Worlds Rlect ante eee 47
12 Maximum Numbers of Ships in Convoys with Tidal
Checksiin Use) csssiscsctids sccct A ane, Ra ee eee ect a a2
13. Single-Lane Channel Dimensions for Safe Navigation
of 150.000 DWT Shipsy £42 24.6 Ach tao odene ce ee oe tenes 53
14 Recommended Side Slopes of Excavations for
DififerentsMatenalsgancduileiohiisie.s ewer eerie sien ene eee SW
1S) | Route 5 Data Estimates: 5.254% S215 eA eee ee eee 77
16)" Route 4S Datasbstimates) ..2¢ « sees io oe aos Seniesa PO ee eens 81
lt y Route, 10 Data Estimates’ . « ; «.<.2.
118) Borecasts of Sea-Wevell€analsRevenulicsmeeire enero cinerea ene nee 89
19 Average Toll Revenues Per Long Ton of Cargo Required for
Amortization of CapitaliGostini6 OYiecarsae eye | eee oe einer eee 93
20 Estimated Peak Debt at 6 Per Cent for Construction
NnhWN
of Sea-Level Canal on Route 10 Operated in
Conjunctionswithithe}Ranamva:Garnalleeyer reer eee 98
List of Figures
Canal Routes 3.5.54. .8b dec ote on Ree eee Vi
Interoceanic:CanalURoutesi( 947. Study) pase reine iene eee 3
CulebralCutExcayation® JumeuliOilsy eae ears net cee eee 8
United States|Navy Aircrait (Carrier CONS TEDW ARIO NGS see eee 10
Canal'Zone Townof Balboa ~...: 2) Joe on eo eee 13
Comparison of Previous Panama Canal Traffic Forecasts and
Panama Canal Actual Total Cargo Tonnage Experience ................... 18
List of Figures (Cont’d)
Figure Page
7 Projected Panama Canal Commercial and Bypass
Traffic, Long Tons of Cargo (Economic Research
INSSOCIAUES)) 1 Pee Vee R as cE SM ee EEN Bothy dso ap ERIE HIS RT IEE AE ls 19
8 Cargo Tonnage Forecasts for a Non-Restricted
ESthimnann Cari all eee errr = see peta co AIR eae SL Seay ee er gem ee 24
9 Isthmian Canal Transits Based on Potential
Monnage MOKnecast. eeueened ites Siete ee yen 2 the TAN Tete err yet VEE A ENE 27
NO Rie SE DYAINT Great 1a t eget ers coed xo: CUBE RAI es ted etna oy Suavoeue sioner th clbleday ets ap 34
(PIER WG GNA Crater ess ss ete | cp eeonen recy ce lenis carey minen. (0. atm fe, La cetwa seca 35
12 Helicopter Lifting a Drilling Mast on Route 17 ........................... 36
Se Routewe/aEentenlinesnailyecves ise s otk cn sc ther acaniceeen mask e le Ona eee 38
A BascyEamn pi ROutemli/AMnr base = cscs, SR eres: ers coraus, aud oi aE sehen ci git cnc see 39
iS Drillinssior SubsurtacelGeolopicallDatayannene eee eee 41
lOmeExpenmentaliChannelMRortisheckeiMontanaeemn nee oer: 42
Vigne SevicnwDay alu deVReCORd ene. te cts ae arin) cance sous tene este) hath cee es eRe 49
Seu SSPASSistin ey Shipnnethe banamalCanallsyee a. sae eee eae ooo e se oeaaoee. 50
19 Scale Model Test, Naval Ship Research and
DevelopmentG@enter ypc ys es ro nen eee CRY SE ceo 51
QOMPATtistisisketchron Midali@hecks i aem.an8 cer ce cee on ery ce ees i a ie Fae ID,
2 iil Creek Operation, Simulealaine Canell 550000000ccn0000000500000000056 54
22 Tidal Check Operation, Canal with Center Bypass ....................200-- 55
DS EartihysidenntherGaillardiCuresOctoben ISIS esaeenne eee nee eee 58
DA Meehan ale onc errr es cao he see ea eee crraies Oye Sm eeu dl ac OE 64
25 Gatun Locks at the Caribbean end of the Panama Canal .................... 65
AS Wicloning Wine Panam Camel Camel sooseo0ces550050d0000050050000000EC 65
Dime Miratloresseocksmimnne ree iee War Pine CRW et eta le es MINED. ak ce acs 66
ySmeelihetkanamaiCanaliatsNicht Ae yore. ees series sentra een Ca, 5 Slee cae arcane ec 66
29 WockiCanal)Route 5, Sea-Wevel Canali Routers) 35-4255 500 4ses coca ae ae 68
30 Sendleyell Camel lRowies 17/73, amgl PS 2 caccccscnnccccc00D000DDDDDD0NDOE 69
31 Line Camp where Route 17 Crosses the Continental
DYN VORS i sets a: ere of Gael acta Sena eR BE Ua Sata hy Sear et elon SE rer 70
oye eSca-eveliCanalbRoOuter2S: au-vraene et Oats ese le certo bi Scie he rss tee Onc aelccvaus 71
Bom pO SuciornithesAtratOuRIVetmn se erienscicr ce ye ers eich woe lver res eee aspcomertee a oe WD
34 JRO DS Chania! Comigmmanoms coccocoonscucoooocanoesoananoesocudES 73
BMA LONMCunI CheMWicaLheimStatl On NOULC som eee reine iiiicier ae icrneieieici iia 74
3 Om Weep sD rattelocks Canales cer nacre cuca eee cris auc! GIA aC Ro euels Seeiceny Queue neeep me 76
SS Wigm Sca-leevely CamalwRouitew lan cone aise ne eas ance ote eee rca means reset cuca neon a 719
38 IROwUS IAS Chiamimell Comigungimnonns .6occcc000 conc cbc ccacoucccouguUn ODODE 80
3 Ome Sca-lkeveltGanalgRoutepll Ole venerneekaan tr te alsin nals, Ceca ejts lay Rie waver eee 83
4 Ome RoutewOlChanneliGonticurationsmaeeeeeee eee ee eee: 84
Ae kannlandionisouthenmpRorionvof RoutelOMssaaeaeee eee dae aoe 87
List of Figures (Cont’d)
Figure Page
42a Tolls Versus Opening Dates, Potential Tonnage
Projection; 2.5. 2866s Yo es ee ee i ee eee eee 95
42b Tolls Versus Opening Dates, Low Tonnage
Projection: - 2.aaw debe a ls eRe eee eee eee eee oS
43a Sensitivity of Tolls to Project Cost, Potential
Tonnage Projection. <2. 25. .45.cc < SAR eee ee eee 96
43b_ Sensitivity of Tolls to Project Cost, Low Tonnage
PROjE CON Wy atciscag, coun oeud ashe Se eee 97
44 Average Tolls Required for Amortization of a
Route 10. Canal £4.4.5.456 wah. (Se a eee eee 100
THE ATLANTIC-PACIFIC INTEROCEANIC CANAL STUDY COMMISSION:
Raymond A. Robert G. Robert B. Milton S. Kenneth E.
Hill Storey Anderson Eisenhower Fields
Vice Chm. Chairman
COMMISSION EXECUTIVES
Executive Director John P. Sheffey
Brigadier General Harry G. Woodbury, U.S. Army
(June 24, 1965 to June 18, 1967)
Engineering Agents
— Brigadier General Charles C. Noble, U.S. Army
(June 19, 1967 to January 26, 1969)
— Brigadier General Richard H. Groves, U.S. Army
(January 27, 1969 to the present)
Secretary — Edward W. McGregor
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REPORT OF THE
ATLANTIC-PACIFIC INTEROCEANIC CANAL
STUDY COMMISSION
CHAPTER I
INTRODUCTION
The Atlantic-Pacific Interoceanic Canal Study Commission was required by Public Law
88-609 of the 88th Congress, September 22, 1964, (Enclosure 1) “. . . to make a full and
complete investigation and study, including necessary on-site surveys, and considering
national defense, foreign relations, intercoastal shipping, interoceanic shipping, and such
other matters as they may determine to be important, for the purpose of determining the
feasibility of, and the most suitable site for, the construction of a sea-level canal connecting
the Atlantic and Pacific Oceans; the best means of constructing such a canal, whether by
conventional or nuclear excavation, and the estimated cost thereof.’ The Commission
interpreted its mission also to require, for the purpose of comparison, an evaluation of the
merits of improving and augmenting the existing Panama Canal to accommodate forecast
traffic.
On December 18, 1964, President Lyndon B. Johnson announced the willingness of the
United States to negotiate with the Republic of Panama a new treaty to replace the Treaty
of 1903. At the same time he stated that the United States would request rights to conduct
on-site investigations of potential sea-level canal routes not only in Panama but also in
Colombia, Nicaragua, and Costa Rica. The President said:
ok KK
“For fifty years the Panama Canal has carried ships of all nations in peaceful
trade between the two great oceans — on terms of entire equality and at no profit
to this country. The Canal has also served the cause of peace and freedom in two
world wars. It has brought great economic contributions to Panama. For the rest
of its life the Canal will continue to serve trade, and peace, and the people of
Panama.
But that life is now limited. The Canal is growing old, and so are the Treaties
for its management, which go back to 1903.
KKK
So I think it is time to plan in earnest for a sea-level canal. Such a canal will be
more modern, more economical, and will be far easier to defend. It will be free of
complex, costly, vulnerable locks and séa-ways. It will serve the future as the
Panama Canal we know has served the past and the present.â€
When President Richard M. Nixon took office in January 1969, he retained the
originally appointed Commission and requested it to continue the investigation to its
completion.
The Commission has been guided in its investigation by numerous earlier canal studies.
The most recent of these were:
— The 1947 study conducted by the Governor of the Panama Canal.
— The 1960 study by the House Committee on Merchant Marine and Fisheries.
— The 1960 and 1964 studies by the Panama Canal Company.
These earlier studies evaluated all potential canal routes across Central America and thus
enabled the Commission to concentrate its efforts on the most promising ones.
Canal Treaties
The Commission has had no role in the treaty negotiations with Panama conducted by
its Chairman, Robert B. Anderson, in his separate capacity as Special Representative of the
United States for United States-Panama Relations.
The Commission assumed at the outset of its studies that construction of any sea-level
canal would require new treaty arrangements between the United States and the host
country. Existing treaties with Panama and Nicaragua do not provide authority for
construction of a sea-level canal in either country, and no existing treaties provide the
United States canal rights in Costa Rica or Colombia. In addition, no treaty in force
provides for multinational participation in canal finance or management.
During the first 2 years of the Commission’s investigation, treaty negotiations with
the Republic of Panama were in progress. In June 1967, the negotiators reached agreement
on drafts of three new treaties to replace the Treaty of 1903 — one for the continued
operation of the existing canal, another for United States rights to build and operate a
sea-level canal in Panama, and a third for canal defense. However, neither Government
initiated ratification procedures thereafter, and in 1970 the Government of Panama
announced its rejection of the draft treaties. In both countries new administrations have
replaced those in office when the draft treaties were developed. The drafts have no legal
status; they represent only the United States and Panamanian negotiators’ judgments in
1967 of what might have been acceptable to their respective Governments at that time.
However, the Commission has been mindful of relevant provisions of the draft treaties in its
consideration of possible future treaty arrangements that would bear upon the feasibility of
a sea-level canal in Panama.
Selection of Alternatives for Evaluation
In October 1962, the Secretary of the Army formed a Technical Steering Committee to
review prior studies and to develop a new canal study plan for presentation to the Congress.
The sea-level canal routes recommended in this plan were selected from those found most
promising in the 1947 study conducted by the Governor of the Panama Canal which
identified 30 potential routes and assigned them numbers that have been used in all
subsequent studies (Figure 2). Those recommended for investigation in the plan proposed to
the Congress by the Secretary of the Army, with consideration of the potential of nuclear
excavation, were
— Route 8 in Nicaragua and Costa Rica for a sea-level canal constructed primarily by
nuclear excavation.
— Route 14 in the Canal Zone for conversion of the present lock canal to sea level by
conventional construction methods.
— Route 17 in Panama for a sea-level canal constructed primarily by nuclear
excavation.
— Route 25 in Colombia for a sea-level canal constructed by a combination of nuclear
and conventional excavation methods.
CARIBBEAN SEA
CANAL ZONE
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SCALE IN MILES
100 200
100 0
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FIGURE 2
SCALE IN MILES
0 0 20 100
INTEROCEANIC CANAL ROUTES
(1947 STUDY)
The Congress authorized the new canal study on September 22, 1964. The original
legislation contemplated investigation of these four routes and authorized funds for field
surveys only of Routes 17 and 25. Data available from previous studies were believed to be
adequate for evaluations of Routes 8 and 14.
When the Commission was appointed in April 1965, it requested the Secretary of State,
the Secretary of the Army, and the Chairman of the Atomic Energy Commission to serve as
its Advisory Council. Interdepartmental study groups were then organized to conduct
studies under the Commission’s direction as follows:
— Study of Foreign Policy Considerations.
— Study of National Defense Aspects.
— Study of Canal Finance.
— Study of Interoceanic and Intercoastal Shipping.
— Study of Engineering Feasibility (directed by the Chief of Engineers, United States
Army, in coordination with the Atomic Energy Commission and the Panama Canal
Company).
— Study of Public Information Requirements
(subsequently combined with the Study of Foreign Policy Considerations).
The study groups included representation from all government agencies with significant
interests in an Isthmian canal. They also used private contract agencies for supporting
technical studies.
The Commission employed a panel of eminent private consultants which it
designated as its Technical Associates for Geology, Slope Stability, and Foundations. These
specialists provided technical advice directly to the Commission on engineering matters and
were also made available to the Commission’s Engineering Agent to advise and assist him in
the conduct of the Study of Engineering Feasibility.
At the outset of its studies, the Commission approved investigation of the four routes
recommended to the Congress by the Secretary of the Army. A few months later the
Commission directed its Engineering Agent to update earlier cost estimates for improve-
ments to the existing lock canal and for construction of a new lock canal in Nicaragua; these
estimates were needed to permit comparisons with the alternative sea-level canals in terms of
capacities and construction, operation, and maintenance costs.
As the engineering study of Route 14 progressed it became apparent that an alternate
route nearby, one that did not interfere with the existing canal, might be preferable.
Consequently, in June 1966 Route 10 was added to the routes under consideration. The
Congress subsequently provided additional funds for a limited field investigation of this
route.
As the geological drilling program on Route 17 progressed, it became apparent that there
was little possibility that nuclear means could be used for excavation of approximately
one-third of the route. Hence, the plan for evaluation of this route was revised late in 1967
to provide for excavation of approximately 20 miles of its length by conventional methods.
In 1969 the Government of Colombia informally proposed a joint U.S.-Colombian-
Panamanian investigation of Route 23. The Commission advised Colombian representatives
that the route did not appear to be competitive with routes already under consideration but
agreed to include in its final report an analysis of it based upon available data.
Table 1 lists all the routes given specific consideration in the course of the
Commission’s investigation. A detailed discussion of the selection of these routes is
contained in Annex V, Study of Engineering Feasibility.
Route No.
14-
Combined
14-
Separate
15
17
23
Route Name
San Juan del
Norte-Brito
San Juan del
Norte-Salinas Bay
Chorrera-Lagarto
Panama Canal
Sea-Level
Conversion
Panama Canal
Sea-Level
Conversion
Panama Canal
Sasardi-Morti
Atrato-T uira
Atrato-T ruando
Nicaragua and
Costa Rica
Nicaragua and
Costa Rica
Panama
Canal Zone
Canal Zone
Canal Zone
Panama
Colombia and
Panama
Colombia
TABLE 1
Type of Canal/
Excavation Method
Lock/Conventional
Sea-Level/Conventional
or Nuclear
Sea-Level/Conventional
Sea-Level/Conventional
Sea-Level/Conventional
Lock/Conventional
Sea-Level/Conventional
and Nuclear Combination
Sea-Level/Conventional
or partially Nuclear
Sea-Level/Conventional
and Nuclear Combination
CANAL ROUTES SELECTED FOR COMMISSION INVESTIGATION
Basis of Evaluation
Available data
Available data
Available data augmented by
geological investigations
Available data augmented by
geological investigations
Available data augmented by
geological investigations
Available data
Comprehensive on-site survey
Available data augmented by
data from surveys on Routes
17 and 25.
Comprehensive on-site survey
CHAPTER II
ISTHMIAN CANAL INTERESTS OF THE
UNITED STATES AND OTHER NATIONS
The United States entered the Isthmus of Panama in 1903 to build a canal to serve
world commerce and contribute significantly to the national security of the United States.
In the years since its opening in August 1914, the Panama Canal has played a major role in
the defense of the United States and its value as an international public utility serving ocean
trade has increased dramatically.
Although less than 5 per cent of canal tonnages in recent years has been United States
intercoastal trade and although most merchant ships now using the Panama Canal are not of
United States registry, approximately 70 per cent of all canal cargoes either originate in or
are destined for the United States. More than 40 per cent of the ocean trade of the Pacific
Coast countries of South America passes through the canal. Japan, Canada, Venezuela, and
Chile are major users, and almost every country in the world has some trade on the canal
routes.
The policy of the United States has been to operate the Panama Canal on a non-profit
basis for the benefit of all users. No specific effort has been made to amortize the United
States investment in the canal. With the exception of a few small repayments to the
Treasury, revenues in excess of operating and interest costs have been devoted to capital
improvements.
The initial investment of $387 million was too great to be amortized by reasonable tolls
during the canal’s early years. Tolls were set at 90 cents per measurement ton (100 cubic
feet of cargo space) for laden vessels, 72 cents per measurement ton for vessels in ballast,
and 50 cents per displacement ton for warships and other non-cargo vessels. From
1914 to 1951 the canal was maintained and operated by annual appropriations from the
United States Treasury, while annual receipts were returned to the Treasury. Not until after
World War II did revenues approach operating costs. In 1951 the Panama Canal Company
was organized as a United States Government corporation under legislation which permitted
continuation of the previously established toll levels but authorized increases when needed
to meet operating costs, interest on the unamortized investment, and a proportionate share
of the cost of the Canal Zone Government. In arriving at the interest-bearing debt* of the
Company the Congress set it at a minimum to lessen the interest burden on toll revenues.
All capital costs that reasonably could be attributed to defense or other activities not
required for ship transits were written off. No provision was made for payment of the
*The Panama Canal Company’s interest-bearing debt was established in 1951 at $373 million. (See Public Law 841, 81st
Congress, September 26, 1950, 64 Stat. 1041; Hearings before the Subcommittee on the Panama Canal of the Committee
on Merchant Marine and Fisheries, House of Representatives, on H.R. 8677, 81st Congress, June 26-28, 1950; Hearing
before the Committee on Armed Services, United States Senate, on H.R. 8677, 81st Congress, September 7, 1950.) As of
June 30, 1970 it had been reduced by write-offs and repayments to $317 million. As of this same date the total
unrecovered United States investment in the canal, including unpaid interest accrued since 1903, was estimated by the
Company to be $700 million, excluding defense costs.
Culebra Cut, the deepest excavation of the Panama Canal, June 1913
FIGURE 3
interest obligation which had accumulated prior to the creation of the Company, and the
formula prescribed for calculating the interest rate on the debt was designed to keep current
interest payments low. The legislation creating the Company did not permit it to increase
tolls for the purpose of amortizing its debts.
Since 1951 the Congress has continued to confirm its intent to maintain low tolls.
When the canal annuity to Panama was increased $1.5 million by treaty agreement in 1955
the Congress stipulated that the increase be paid through an appropriation to the
Department of State. This arrangement continues today; only $430,000 of the $1,930,000
annuity is included as a cost of canal operation. Hence, meeting the legally established
payment objectives of the Panama Canal Company has not required an increase in the toll
rates set in 1914.
Interests of the United States
The objectives of the United States in an Isthmian canal are:
— That it always be available to the world’s vessels on an equal basis and at reasonable
tolls,
— That it serve its users efficiently, and
— That the United States have unimpaired rights to defend the canal from any threat
and to keep it open in any circumstances, peace or war.
National Security
The present Panama Canal plays an important role in the United States national
defense; this is analyzed in Annex II, Study of National Defense Aspects. In World War II
(1941-1945), United States Government vessels made 20,276 transits, and 24 million tons
of military supplies passed through the canal. During the Korean War (1951-1954), United
States Government vessels made 3,331 transits, and 12 million tons of supplies went
through. It played an important role in the deployment of naval vessels during the Cuban
crisis in 1962, and currently a large portion of the military vessels and military supplies
bound for Vietnam passes through the canal.
Closure of the Panama Canal in wartime would have the same effect on United States
military capabilities as the loss of a large number of ships. Many additional ships would be
needed to support military operations effectively via alternate \routes, particularly
operations in the Pacific area. The canal’s major military importance is in the logistic
support of combat forces overseas; internal United States transportation systems and port
complexes could be severely burdened in wartime if cargo movements had to be diverted
from canal routes. In an emergency, combat vessels can be deployed between the oceans by
other routes, but the capacities of available shipping, ports, and domestic transportation
cannot be quickly augmented to compensate for canal closure.
Panama has neither sufficient military strength to defend the Panama Canal nor the
capability of developing such strength. The presence of United States forces is essential for
the security of the canal. This limited role of the United States forces in the Canal Zone has
created no great difficulties with Panama. The defense of the canal, however, is an integral
part of the defense of the Americas; Panamanian Governments in the past have expressed
objections to the planning and execution of hemisphere defense activities from Zone bases.
The existing Panama Canal is vulnerable to many forms of attack, even though
extensive protective measures have been taken to strengthen the dams holding its water
supply, to double-gate the canal locks, and to guard its power sources. Drainage of Gatun
Lake is the greatest danger. A guerrilla raid on the locks or dams or the demolition of a
shipload of explosives in the locks could result in the loss of stored water that could take as
long as 2 years to replace. Shorter term interruptions could readily be created by sabotage
of power supplies and lock machinery, by scuttling ships in the locks or channel, or by
harrassment by fire on ships in transit. Considering its vulnerabilities, little comfort can be
drawn from the fact that no interruption of canal operations by hostile forces has occurred,
for no military or guerrilla attack on the canal has yet been attempted. The United States
must have a secure Isthmian canal, and its defense can best be accomplished in conjunction
with defense of the surrounding area at great distances from the canal itself.
Although it could not be put in operation for many years to come, a sea-level canal
across the American Isthmus would increase the security of the United States and other
countries in the Western Hemisphere. It would be much less vulnerable to interruptions and
hence easier to defend. The current weaknesses of locks and power and water supply would
SANA
ay oe
The United States Navy Aircraft Carrier CONSTELLATION passing under the Thatcher Ferry Bridge over the Panama
Canal. This carrier, with a 250-foot wide flight deck, is too wide to pass through the 110-foot wide locks of the present
canal.
FIGURE 4
not exist. Blockages by scuttled ships or bomb-induced slides could be removed relatively
quickly and the possibility is remote that it could be closed for long periods by hostile
action.
Canal Treaties
The principal treaties bearing upon United States canal rights and obligations on the
American Isthmus are:
— The Gadsden Treaty of 1853 with Mexico which guaranteed to the United States
freedom of transit across the Isthmus of Tehuantepec should any means of transit
be constructed there.
— The Hay-Pauncefote Treaty of 1901 with Great Britain which cancelled an earlier
agreement with Britain that the United States would not fortify any canal across
the Isthmus and provided that the United States could alone build, operate, and
protect the Isthmian canal, provided it was neutral and open to the world’s vessels
on an equal basis.
— The Hay-Herran Treaty of 1903 with Colombia (never ratified) which would have
given the United States the right to construct a canal in the Province of Panama.
Failure of the Colombian Government to ratify this treaty led to the creation of
10
the Republic of Panama, and signature of the Hay-Bunau Varilla Treaty of 1903
with Panama.
— The Hay-Bunau Varilla Treaty of 1903 with Panama which gave the United States
in perpetuity the exclusive right to build and operate a canal across Panamanian
territory and all the rights as if sovereign in the Canal Zone.
— The Bryan-Chamorro Treaty of 1914 with Nicaragua (now in process of being
abrogated) which gave the United States the right in perpetuity to construct an
interoceanic canal across Nicaraguan territory.
— The Thompson-Urrutia Treaty of 1914 (ratified in 1922) with Colombia which
gave to Colombia the right of toll-free passage of the Panama Canal for her
government-owned vessels.
— The 1936 and 1955 treaties with Panama which relinquished some United States
rights acquired in 1903 and provided additional benefits for Panama but did not
fundamentally change the 1903 Treaty relationship.
Treaty Negotiations, 1964-1967
The draft three-treaty package developed by United States and Panamanian negotiators
between 1964 and 1967, never signed or ratified, and rejected by the Government of
Panama in 1970, contained these major provisions:
— The first of the proposed treaties, that for the continued operation of the present
canal, would have abrogated the Treaty of 1903 and provided for: (a) recognition
of Panamanian sovereignty and the sharing of jurisdiction in the canal area, (b)
operation of the canal by a joint authority consisting of five United States citizens
and four Panamanian citizens, (c) royalty payments to Panama rising from 17 cents
to 22 cents per long ton of cargo through the canal, and (d) exclusive possession of
the canal by Panama in 1999 if no new canal were constructed or shortly after the
opening date of a sea-level canal, but no later than 2009, if one were built.
— The second, for a sea-level canal, would have granted the United States an option
for 20 years after ratification to start constructing a sea-level canal in Panama, 15
more years for its construction, and United States majority membership in the
controlling authority for 60 years after the opening date or until 2067, whichever
was earlier. It would have required additional agreements on the location, method
of construction, and financial arrangements for a sea-level canal, these matters to be
negotiated when the United States decided to execute its option.
— The third, for the United States military bases in Panama, would have provided for
their continued use by United States forces 5 years beyond the termination date of
the proposed treaty for the continued operation of the existing canal. If the United
States constructed a sea-level canal in Panama, the base rights treaty would have
been extended for the duration of the treaty for the new canal.
Interests of the Canal-Site Countries
Panama
The Treaty of 1903 with Panama for the construction and operation of the Panama
Canal granted to the United States in perpetuity all of the rights as if sovereign in a | O-mile-
11
wide zone across the Isthmus, to the entire exclusion of the exercise of such rights by the
Republic of Panama. The Republic of Panama has sought since 1903 to terminate the
sovereignty and perpetuity clauses of the treaty, to increase her participation in the
employment and financial benefits deriving from the canal, and to reduce both the
substance and the appearance of United States control of Panamanian territory. The treaties
of 1936 and 1955 made limited concessions to Panama, but were short of meeting
Panamanian aspirations.
Panama has indicated in past treaty negotiations that she considers her fundamental
interests in any canal across her territory to be:
— That it be operated and defended with full recognition of the sovereignty of the
Government of Panama.
— That Panama obtain the maximum possible revenues from the canal in direct
payments and through Panamanian employment and sales of goods and services in
the canal enterprise.
— That Panama eventually become sole owner and operator of the canal.
The differing canal objectives of the United States and Panama have continued to
impair tranquil relations. Destructive riots took place along the Canal Zone border in 1959
and in 1964. New treaty negotiations, begun in 1964 and as yet unfinished, have as their
goal the reconciliation of the interests of both countries in a lasting agreement.
There are many constraints upon the United States in meeting Panamanian aspirations,
but the United States has demonstrated, in the treaties of 1936 and 1955 and in negotiating
the 1967 draft treaties, a sincere desire to go as far as it can without jeopardy to its own
canal objectives.
The existing lock canal requires a large staff of skilled operating personnel, and its
defense requires substantial military forces. The Canal Zone provides a United States
standard of living for the 4,000 United States citizen employees of the canal, mostly
executives and skilled craftsmen. The Zone military bases provide similar living standards for
13,500 military and civilian personnel. These canal and military personnel are accompanied
by approximately 20,500 dependents. This results in some 38,000 United States citizens
living in an enclave extending across the middle of the Republic of Panama.
The living conditions provided by the Canal Zone were needed in the past to attract and
retain skilled employees, but modern Panama’s economy could provide housing and
commercial services equivalent to those of the present Canal Zone. Panama’s capability of
providing skilled personnel is steadily increasing, and the Panama Canal Company has for
some years maintained training programs for its Panamanian employees. Consequently,
skilled employee positions are increasingly being filled by Panamanian citizens. An
employee phase down in a change over to a sea-level canal would hasten the elimination of
what is now deemed by Panamanians to be discrimination in favor of United States citizens
in canal employment. These prospects offer means for reducing or eliminating several
politically sensitive elements in the current situation.
The Panama Canal and its associated United States military bases provide a major
portion of the economic lifeblood of Panama. Although Panama’s direct annual compensa-
tion is slightly less than $2 million, more than $100 million each year is paid to
Panamanians for goods and services supplied to the Canal Zone. Panama’s economy is
growing more rapidly than the economies of other Latin American countries. Canal
12
operations and defense are expected to continue to be the basis for about two-thirds of her
foreign exchange earnings and one-third of her total economic activity, at least during the
remainder of this century.
A United States decision to construct a sea-level canal in another country would be an
economic catastrophe for Panama. The potential effects are analyzed in Chapter VII,
Analysis of Alternatives.
Colombia
The economy of Colombia is larger and more broadly based than that of Panama.
Colombia’s population is more than 10 times greater, and her metropolitan centers are far
removed from Route 25. A sea-level canal constructed in Colombia would be, at least
initially, remote from public view and its economic impact would be favorable, although
relatively small.
Formal negotiations for sea-level canal treaty arrangements with Colombia have not
taken place. Informal discussions by members of the Commission with her representatives
and public statements by her officials indicate that a treaty giving the United States
effective control of a canal on Colombian territory might be unobtainable in the foreseeable
future, and that United States military forces for canal defense could not be stationed in
The Canal Zone town of Balboa at the Pacific end of the canal
FIGURE 5
13
Colombia. Colombia’s representatives acknowledged that construction of a new canal
wholly on Colombian territory could be destructive to the economy of Panama; hence, they
indicated that any canal arrangement involving Colombia would have to contribute to
regional cooperation and not be a source of friction with her neighbors. The Government of
Colombia did express willingness to cooperate with the United States and Panama in
investigating the feasibility of multilateral finance, control, and defense of a canal on Route
23 traversing the territories of both Panama and Colombia.
Nicaragua-Costa Rica
United States relations with Nicaragua and Costa Rica have traditionally been friendly.
The Bryan-Chamorro Treaty of 1914 established United States rights to build a canal in
Nicaragua, subject to further agreement upon detailed terms for its construction and
operation. Plans for abrogation of this treaty were initiated early in 1970, but new treaty
terms attractive to the United States probably would be attainable for a sea-level canal on
Route 8, generally along the border between Nicaragua and Costa Rica.
Interests of Canal Users
As previously indicated, the present Panama Canal plays an important role in the
economic life of some dozen nations and is used in lesser degrees by most other nations of
the world. Although the United States is the largest user of the Panama Canal, its economic
importance is greater to several smaller countries, particularly those of the Pacific Coast of
South America. Table 2 compares the exports and imports through the canal for various
countries in relation to their total ocean trade as a measure of its importance to each. The
United States’ 15.8 per cent is exceeded by the proportions of 10 other countries whose
economies are vitally linked with the canal.
A recent informal opinion survey of Panama Canal users by United States embassies
found general satisfaction with operation of the present canal by the United States. The
survey also indicated that the maritime nations of the world assume that the United States
will continue to provide an adequate interoceanic passage.
Country Origin Destination Total Oceanborne Trade
United States 44,010,410 27,618,123 15.8
(U.S. Intercoastal) (3,851,326) (3,85 1,326)
Japan 7,396,528 33,558,400 11.7
Canada 7,280,101 2,335,207 75
Venezuela 8,528,294 704,973 4.7
Chile 3,325,839 4,063,013 39.6
Peru 4,678,162 1,768,126 39.0
United Kingdom 979,589 3,362,642 2.0
Netherlands West
Indies 3,720,671 113,646 4.5
Netherlands 470,062 2,/37,548 ey
Australia 1,668,788 1,367,957 4.1
West Germany 790,825 2,085,378 2.6
Ecuador 969,258 1,215,417 72.4
Philippine Islands 1,534,594 545,703 8.3
New Zealand 1,309,822 702,091 17.6
South Korea 252,799 1,672,353 12.2
Colombia 1,061,716 611,011 22.2
Cuba 1,084,094 479,554 9.8
Panama 1,229 607 331,358 31.5
Canal Zone 17,165 1,436,424 ———
Mexico 677,417 758,039 12.8
Belgium 706,125 794,153 1.9
France 334,326 941,959 0.9
Italy 185,766 1,032,002 0.6
Formosa 307,414 823,642 8.9
El Salvador 207,868 870,014 68.1
Poland 843,564 75,297 2.9
Trinidad/T obago 680,661 108,642 2ES
South Vietnam = ————— 772,063 10.2
Nicaragua 166,801 494,675 55m
Brazil 387,816 240,668 1.3
Puerto Rico 100,397 514,360 --——
TABLE 2
PANAMA CANAL USERS, FISCAL YEAR 1969'
Long Tons of Commercial Cargo
Per Cent of Country’s
(Continued on following page)
' Countries are ranked in accordance with total of origin and destination cargoes in Fiscal
Year 1969. Canal per cent of country’s total oceanborne trade is based upon data
contained in the United Nations Statistical Yearbook, 1970.
IES
TABLE 2 (Cont'd)
PANAMA CANAL USERS, FISCAL YEAR 1969!
Long Tons of Commercial Cargo Per Cent of Country’s
Country Origin Destination Total Oceanborne Trade
Spain/Portugal 108,216 452,971 0.8
Jamacia 427,746 113,646 4.0
China 343,290 192,271 2.5
Costa Rica 276,139 237,150 30.9
Guatemala 74,396 407,349 30.9
Indonesia 66,578 413,416 1.8
Hong Kong 193,990 230,662 So/
East Germany 355,160 48,179 4.2
French Oceania 130,498 246,157 sa
Sweden 164,508 195,267 0.5
British Oceania 319,320 38,007 oe
British East Indies 188,277 122,919 ———
Netherlands Guiana 288,765 aan =
Honduras 210,642 20,602 13.6
USSR 187,477 S2P7 Sil 0.2
Thailand 68,656 151,272 ey,
North Korea 57,493 127 ,350 12.1
Denmark 52.777 128,345 0.6
West Indies
Associated States 134,371 40,023 --—
Norway 103,574 66,836 0.3
Finland 158,050 ——— 0.6
Guyana 140,418 a 2.8
Yugoslavia 11,491 128,840 1.1
Argentina 36,886 56,355 0.5
South Africa ae 92,317 0.4
Irish Republic —--— 75,831 0.7
Haiti and Dominican
Republic 10,004 59 844 1.6
Rumania 62,867 aaa 0.9
Israel os 56,452 0.9
Libya ---- 40,278 ---—
Greece ed 32,423 0.2
Lebanon -—--— 26,380 0.1
Morocco ---- 12,995 0.1
Mozambique —— 10,100 0.1
British Honduras 1,636 ---- 0.8
All Others 2,311,328 3,299,726 0.8
TOTAL 101,391,132 101,391,132
CHAPTER III
POTENTIAL CANAL TRAFFIC AND REVENUES
Canal traffic forecasts are required to determine (a) when the present canal will become
incapable of meeting estimated demand for transits and (b) whether a new sea-level canal
could be financed from toll revenues. Legislation authorizing a sea-level canal, and the
subsequent detailed planning and construction, would require approximately 15 years, and
60 years or more thereafter might be required for amortization. This period of 75 years into
the future is excessive for economic forecasting; hence, the estimates of potential canal
traffic and revenues described herein of necessity incorporate assumptions and judgments.
Previous Canal Traffic Forecasts
Many forecasts have been made of traffic through the Panama Canal. Figure 6 compares
actual Panama Canal experience with forecasts by Hans Kramer in 1927; Norman Padelford
in 1944; Roland Kramer in 1947; Stanford Research Institute in 1958, 1964 and 1967; and
Gardner Ackley in 1961. These forecasts have almost without exception soon been
exceeded by the traffic which subsequently developed. As the forecast periods became
history, unforeseen new commodity movements appeared in ever-increasing proportions of
the total tonnages passing through the canal.
The Economic Research Associates, Inc., Forecast
The Shipping Study Group, in its report to the Commission, did not estimate future
traffic through the existing canal; it limited its considerations to the potential traffic
through an unrestricted canal. However, early in 1970 a traffic forecast through 1985 for
the present canal was independently developed by Economic Research Associates, Inc.
(ERA) under a contract with the Panama Canal Company (Figure 7). It arrived at a
projection of potential canal traffic essentially the same for the 1970-1985 period as in the
Commission’s forecasts, described later in this chapter, produced by a different method-
ology. ERA also forecast the division of potential traffic between the present canal and
alternate routes. As will be shown later in this Chapter, the ERA forecast provides a logical
basis for estimating the saturation date of the present canal if no sea-level canal is built.*
Capacity of the Present Canal
The average amount of commercial cargo per ship transiting the Panama Canal increased
slowly from approximately 4,000 to 5,500 long tons from 1920 to 1960. During the past ten
years, however, there was a rapid increase: 6,470 long tons per transit in 1965; 7,710 long
tons per transit in 1969; and 8,366 long tons per transit in 1970. The average amount of
cargo per ship passing through the Panama Canal in future years will certainly not lessen; it
*Saturation date is the year in which the number of transits through the canal reaches the maximum number that can be
passed through the locks, estimated to be 26,800 per year.
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COMPARISON OF PREVIOUS PANAMA CANAL TRAFFIC FORECASTS AND
PANAMA CANAL ACTUAL TOTAL CARGO TONNAGE EXPERIENCE
FIGURE 6
18
MILLIONS
OF TONS
220
200
ecoooooe CANAL TRAFFIC PROJECTION
eee TOTAL POTENTIAL TRAFFIC PROJECTION
(INCLUDES BYPASS TRAFFIC)
180
160
140
120
100
80
60
40
20
1947 1950 1955 1960 1965 1970 1975 1980 1985
YEAR
PROJECTED PANAMA CANAL COMMERCIAL
AND BYPASS TRAFFIC, LONG TONS OF CARGO
Source: Economic Research Associates
FIGURE 7
19
should continue to increase as more and more intermediate sized tankers and large bulk
carriers are used to carry crude oil and petroleum products and dry bulk commodities
through the Panama Canal. The indications from this \10-year trend are that the average will
be 9,500 long tons per ship by the time traffic reaches 150 million long tons of cargo per
year, and at least 12,000 tons per transit when 250 million tons of commercial cargo per
year are carried through the Panama Canal.
The numbers of commercial transits of an interoceanic canal with respect to the
amount of commercial cargo in the future, as variously estimated, are shown in Table 3.
TABLE 3
COMMERCIAL OCEAN TRANSITS OF AN ISTHMIAN CANAL
RELATIVE TO COMMERCIAL OCEAN CARGO IN YEAR
Annual Shipping Study Report!
Cargo Transited 46 Per Cent 25 Per Cent
(Millions Of Tonnages Of Tonnages ERA Historical
of Long Tons) In Freighters In Freighters Report
‘ Annex IV, Study of Interoceanic and Intercoastal Shipping, transit data are related to
forecasts of total potential tonnage, including all categories of traffic that transit the
Panama Canal. This table relates to commercial ocean traffic only.
The Panama Canal Company has determined that 26,800 transits per year of all
classifications could be accommodated by completion of improvements now underway and
by augmentation of the water supply for lock operation. There generally have been less
than 1,500 noncommercial transits per year, although the total did exceed 2,000 in the
years of United States military actions in Asia. The effective transit capacity of the existing
Panama Canal may thus be taken to be 25,000 commercial cargo ships per year. The
corresponding upper limit of capacity of the Panama Canal, expressed in long tons of
commercial cargo per year, has been estimated by the Shipping Study Group to be:
—Forecast assuming 46 percent of tonnages
moving in freighters and an average
of 8,800 tons per transit: 220 million long tons
20
—Forecast assuming 25 percent of tonnages
moving in freighters and an average
of 12,400 tons per transit: 310 million long tons
If the average size of the ships transiting the Panama Canal continues to increase at the rate
that has prevailed for the past 10 years, the capacity at the saturation level will be at least
300 million long tons per year.
It may be inferred from estimates of probable bypass traffic during the next 15 years
that the demand on the Panama Canal (if it is not superseded) will be approximately 50
million tons less in the year 2000 than the traffic that would pass through an unrestricted
canal. The corresponding demand on the Panama Canal would thus be approximately 300
million long tons in the year 2000 if the potential forecast of the Commission were realized
or 200 million long tons if its low forecast prevails. These estimates are consistent with the
Shipping Study Group analysis of the economics of alternatives of the existing canal (Annex
IV).
It is apparent from this analysis of its capacity and the projections of future demand
that the Panama Canal can accommodate the demand for transits by ships of the size that
can pass the existing locks for at least 20 years and more probably to the end of this
century.
Forecast of World Trade Growth
A 1968 study of world oceanborne trade by Litton Systems, Inc. forecast that the
growth of aggregate ocean cargo tonnages would slow from the current 7.2 per cent annual
rate to around 4 per cent by the end of the century and would continue to grow thereafter
at approximately that rate. For the past 20 years the Panama Canal portion of total cargoes
moving in ocean trade each year has been consistent, varying less than one percentage point
above or below 5.1 per cent of the total. A forecast based upon this relationship, using the
Litton forecast of world trade, would justify high expectations for a sea-level canal.
However, a projection of potential canal traffic growth into the future at the exponential
rates of the Litton Study reaches economically questionable levels toward the end of the
century and unrealistic levels thereafter.
The Commission’s Forecasts
The traffic growth pattern of the Panama Canal (Figure 6) shows a rapid increase in the
years immediately after its opening in Fiscal Year 1915 followed by a levelling off to
insignificant growth during the depression and war years from 1929 to 1945. Since World
War II, however, there has been sustained growth, and there are no indications of a marked
decline in this growth in the near future. The data are given in detail in Table II-1 of Annex
IV and are summarized in Table 4 of this report. Much of the rapid increase in Panama
Canal traffic in recent years stemmed from trade with Japan, as shown in Table 5.
Two long-range forecasts of traffic through a non-restricted Isthmian canal, made by
the Shipping Study Group, are given in Table 6 and shown graphically in Figure 8. The
forecast of potential canal tonnages recommended to the Commission was in essence a
summation of separate estimates of canal traffic originating in 15 different regions, based in
each case on the historical relationship between such traffic and the respective Gross
Regional Product (GRP) and on extrapolation of that GRP through the year 2000. This
Ah
TABLE 4
GROWTH OF PANAMA CANAL TRAFFIC
Total Transits Commercial Ocean Transits
Fiscal Cargo Cargo
Year Number Million Tons Number Million Tons
TABLE 5
INFLUENCE OF JAPAN TRADE
Millions of Long Tons
Total Commercial
Cargo in Year Japan Trade Other Cargo
TABLE 6
CARGO TONNAGE FORECASTS FOR AN
UNRESTRICTED ISTHMIAN CANAL
Millions of Long Tons Per Year Including
Allowances for Non-Commercial Traffic
Fiscal
Year
Potential Tonnage Forecast Low Tonnage Forecast
forecast was accepted by the Commission for planning purposes. The other forecast was
developed by isolating the traffic to and from Japan from other commercial traffic and then
making separate forecasts for Japan trade and for the remainder of all potential traffic. The
Commission accepted this lower forecast for evaluation of the financial risk that could stem
from construction of a sea-level canal.
Ship Sizes and Potential Canal Transits
The Panama Canal satisfied all demands for shipping between the Atlantic and the
Pacific Oceans from the start of operations in August 1914 until recent years when very
large tankers and bulk carriers began to be built. In 1970 there were approximately 1300
such ships afloat and under construction or on order which could not pass through the
existing locks under any circumstances because of beam width and approximately 1750
others that could not pass through fully laden at all times because of draft limitations. All of
the former and most of the latter are now being used, or will be used, on trade routes that
do not involve the Panama Canal, such as shipments of petroleum from the Middle East to
Europe and iron ore from Australia to Japan. On the other hand, if it were not for the
physical limitations of the Panama Canal, some of these bulk carriers would undoubtedly be
used on canal routes. Distinction must therefore be made between the traffic that the
Zs
Millions of long tons of cargo
1920 1960 1980 2000 2020 2040
FISCAL YEAR
CARGO TONNAGE FORECASTS
FOR A NON-RESTRICTED ISTHMIAN CANAL
FIGURE 8
24
Panama Canal will be called upon to handle and the potential traffic that an unrestricted
sea-level canal might attract.
The dimensions of the existing locks of the Panama Canal preclude the passage of ships
larger than 65,000 deadweight tons* (DWT) when fully laden. This size limitation and the
time required for passage of ships through the locks now impose few restraints on free
movement of oceanborne commerce, but both will become progressively more restrictive as
the average size of the ships and the number of transits increase. Few general cargo vessels
are likely to be built that could not pass through the present canal. Approximately 1 per
cent of the bulk carriers now in service are larger than 65,000 DWT, but by the year 2000
about 10 per cent are expected to be. Only 7 per cent of the tankers now afloat cannot
transit the Panama Canal, but it is predicted that within 30 years more than half of the
tankers in the world fleet will be too large to do so. Table 7, developed by the Commission’s
Shipping Study Group, lists the projected average sizes of ships that would use a future
Isthmian canal, considering a range of maximum size ships to be accommodated.
TABLE 7
AVERAGE DWT PROJECTIONS
Maximum
Ship Type Ship Size 1970 1980 1990 2000 2020
Freighter All Limits 10,800 11,500 12,200 13,000' 14,600 16,500
Bulker 65,000 27,800 33,900 39,800 44,400 48 800 52,000
100,000 28,000 35,900 43,000 50,000 61,500 69,000
150,000 28,000 36,000 43,700 51,600 65,800 81,000
200,000 28,000 36,200 44,100 52,000 67,000 84,000
250,000 28,000 36,200 44,100 52,200 67,200 85,000
Tanker 65,000 19,200 27,700 33,000 36,000 37,000 37,000
100,000 20,000 31,800 41,600 49,200 54,300 56,000
150,000 20,100 33,000 44,800 55,000' 66,600 74,600
200,000 20,100 33,300 45,500 56,600 71,000 83,200
250,000 20,100 33,300 46,000 57,500 72,300 87,200
‘Example: In a canal that could accommodate ships up to 150,000 DWT the average freighter in the year 2000
would be 13,000 DWT; dry bulker, 51,600 DWT; and tanker, 55,000 DWT.
Panama Canal ship mixes and likely variations in canal ship mixes in the future are
discussed in detail in Annex IV, Study of Interoceanic and Intercoastal Shipping. In recent
years, freighters have carried 46 per cent of the cargo tonnage, dry bulkers (some also
carried liquid cargo) 37 per cent, and tankers 17 per cent. It is anticipated that the
proportion of freighter tonnage will diminish progressively as more and more large bulk
*Deadweight tonnage of a ship is its fully laden capacity in long tons (2240 pounds), including cargo, fuel, and stores, but
excluding the weight of the ship itself.
DS
carriers come into use. Since any specific forecast of transits for many years in the future
would have little reliability, transit requirements were calculated for a range of cargo mixes:
a maximum of 46 per cent freighter tonnage; a minimum of 25 per cent of freighter
tonnage. The resulting range of transit possibilities is shown in Table 8. Figure 9 graphically
portrays the range of possible transits for the potential tonnage forecast, used by the
Commission for sea-level canal capacity planning. It is probable that future sea-level canal
transits would remain above the middle range during the remainder of this century and fall
into the lower portion in later years.
TABLE 8
PROJECTED SEA-LEVEL CANAL TRANSITS
(150,000 DWT Maximum Ship Size Capacity)
Potential’ Tonnage Forecast Low? Tonnage Forecast
2000 2020 2040 2000 2020 2040
Tankers 2,252 3,350 3,618 1,602 1,693 1,874
Dry Bulkers 5,652 7,983 7,846 2,565 2,574 2,593
Freighters 16,745 26,854 28,751 21,921 24,975 27,403
Totals 24,649 38,187 40,215 26,088 29,242 31,870
' Assumes most tonnage growth will be in bulk cargoes and current Panama Canal ratio
of 46 per cent of cargo tonnages transiting in freighters will decline to 25 per cent by
2000.
? Assumes uniform growth rate of freighter and bulk cargo tonnages with 46 per cent
of tonnages continuing to transit in freighters through the forecast period.
Estimated Sea-Level Canal Revenues at Current Toll Rates
A canal capable of accommodating large bulk carriers will attract more bulk cargoes
than the present canal. Therefore, revenue estimates must take cognizance of the projected
range of future possibilities: the present Panama Canal cargo mix in which 46 per cent of
tonnages move on freighters, 37 per cent on dry bulk carriers, and 17 per cent on tankers;
and a possible future mix of 25 per cent freighter cargoes, 58 per cent dry bulk cargoes, and
17 per cent tanker cargoes. The average revenue per ton of cargo transited on dry bulk
carriers is the lowest since they usually transit fully laden and have relatively few ballast
transits. The revenue from tankers is higher because of their higher ratio of ballast transits.
The revenue per ton for freighters is highest; they have few ballast transits but usually carry
bulky, light cargoes and are often not fully laden.
26
6% Freighter
Vv
f.
L
PEE EEE EEE EERE
EERE RRB
spuesnoy| — s}isuesy
2030 2040
2020
2010
2000
1990
1980
1970
FISCAL YEARS
ISTHMIAN CANAL TRANSITS BASED ON POTENTIAL TONNAGE FORECAST
FIGURE 9
27
Because the Panama Canal tolls are assessed on the basis of measurement tons (100
cubic feet of cargo capacity), revenues per weight ton of cargo vary widely. The average
revenue per weight ton of cargo passing through the canal during the past 20 years has
fluctuated between 80 and 90 cents per long ton of commercial cargo with a trend toward
the higher amount. Continuation of this upward trend of the average toll per cargo ton
carried through the Panama Canal is indicated by the findings in the recent report of the
Economic Research Associates to the Panama Canal Company. This trend would probably
reverse whenever a sea-level canal became available for use by ships that cannot pass the
locks of the present canal, because of the relatively low revenue per cargo ton realized from
such ships. Therefore, the average toll per long ton of commercial cargo that would be
carried through a sea-level canal can be expected to decrease as the volume of traffic
becomes greater and larger and larger ships come into service. A probable relationship
between such traffic and the average toll is shown in Table 9.
The potential revenues from tolls and toll credits at these average rates per cargo ton are
shown in Table 10 for the traffic forecast recommended by the Shipping Study Group and
for the lower forecast described in the report of that group. It is assumed, as has been
generally true in the past, that the average toll per commercial cargo ton is a fair measure of
toll credits of non-commercial transits.
Maximum Sea-Level Canal Toll Revenues
Three independent studies of potential revenue from the present canal have been made
in recent years. These are the Arthur D. Little Company Study in 1966 for the United
Nations Special Fund, the Stanford Research Institute’s Study in 1967 for the Panama
Canal Company, and the Panama Canal Company’s 1970 Study in connection with its
evaluation of the Intergovernmental Maritime Consultative Organization’s proposed Uni-
versal Measurement Tonnage System.
The Arthur D. Little Study evaluated the movements of major commodities through
the canal in comparison with shipping costs between the same sources and destinations via
alternate routes. The study concluded that, for the short run, an upward revision of the
present tolls could double or triple gross revenues. However, extensive readjustments would
take place over the long run with loss of much of the potential traffic.
The Stanford Research Institute’s (SRI) study involved a judgmental determination of
the responses of commodity movements to toll increase by comparing the estimated costs of
alternatives to the canal. It concluded that across-the-board increases up to 25 per cent
would have little effect on traffic, but larger increases would discourage traffic growth. A
100 per cent increase would cause traffic growth to cease entirely and perhaps even cause
traffic to decline. However, the study concluded that the maximum revenues could be
obtained over the long run by selective toll increases on a commodity basis, ranging from 25
per cent to 150 per cent.
The findings of the Panama Canal Company’s 1970 Study were generally consistent
with those of the SRI Study. The 1970 Study concluded that maximum toll revenues could
be obtained through selective increases averaging approximately 50 per cent. It was
estimated that this would produce revenues about 40 per cent greater than would be
produced by continuation of the present system.
28
TABLE 9
ESTIMATED SEA-LEVEL CANAL REVENUE RELATIVE
TO TOTAL. CARGO TONNAGE
$0.90 per Laden Panama Canal Ton
$0.72 per Ballast Panama Canal Ton
Cargo
Millions of Long Toll Revenue
Tons in Year Average Toll Millions of Dollars
$0.848
0:812
0.777
0.777
0.777
0.777
0.777
TABLE 10
FORECASTS OF SEA-LEVEL CANAL REVENUES
$0.90 Per Laden Panama Canal Ton
$0.72 per Ballast Panama Canal Ton
Potential Tonnage Forecast Low Growth Forecast
Fiscal Year $ Millions $ Millions
It is apparent from these studies that it would be necessary to do away with the present
Panama Canal toll structure to realize the maximum potential revenues in an Isthmian canal.
This toll structure, however, which does not discriminate among types of cargo, is
established by law and has the advantages of simplicity of administration, conformity with
systems used in many other canals and ship facilities, and established acceptability to canal
users. Furthermore, this schedule is currently producing revenues adequate to meet
29
legislatively established obligations of the Panama Canal Company.
The Commission recognizes that United States law requires public hearings before canal
tolls can be increased and that the views of the Congress, canal users, and others would have
to be considered in setting tolls in a sea-level canal. However, in view of the large capital
investment required for a sea-level canal (or for additional locks for the present canal) and
possible future increases in host-country compensation, the Congress may determine that
higher revenue objectives are warranted. The Commission’s study of the potential for toll
increases and higher revenues was directed to the practical options available. These are set
forth in detail in Annex IV, Study of Interoceanic and Intercoastal Shipping. In general, it
was found that:
1
The A.D. Little Company, the Stanford Research Institute, and the Panama Canal
Company studies of the lock canal are applicable to an analysis of the revenue
potential of a sea-level canal.
The alternatives to the use of any Isthmian canal place an upper limit on the
charges it can impose for its services. These alternatives include:
a. Alternative ship routing to avoid the canal, and alternative ship sizes in
conjunction;
b. Transithmian pipelines for petroleum and dry bulk materials transported in
liquid slurry form;
c. The land bridge concept in which rail movement in the United States and
Canada substitutes for canal routing;
d. Air transport; and
e. Substitute sources and markets.
The potential bulk commodity traffic of the sea-level canal is very large, but the
alternatives to the canal limit the ability to increase tolls on these commodities
above present Panama Canal tolls.
The tolls on other categories of cargo could be increased on a selective basis in
varying amounts up to 300 per cent without exceeding the cost of available
alternatives.
The toll system that would produce the greatest revenue without discouraging
traffic growth is one with rates based upon the value to each user. The direct cost
of rendering the services would determine the minimum level for a tolls charge, and
the cost of the most attractive alternative would determine the maximum charge. If
permitted to use such a pricing structure, a sea-level canal could attract almost all
potential traffic from alternative routes and transportation modes.
The findings of the Shipping Study Group as to the maximum potential revenues of a
sea-level canal may be summarized as follows:
The potential traffic level of a sea-level canal is not likely to be achieved with a new
canal limited to ships of 100,000 DWT or less. It is most likely to be achieved by a
canal with a capacity to transit ships of 200,000 DWT or larger.
Toll rates in a canal of adequate dimensions could be increased an average of 50 per
cent in terms of current dollars by the use of a new system of tolls. This would
cause some loss of potential traffic, but would produce approximately 40 per cent
additonal revenue.
30
In addition to the potential for increase in current dollars, average tolls could be
increased at a rate approximating the average inflation of the costs of canal
alternatives with little impact on the volume of traffic.
If tolls are restructured to produce maximum revenues, provisions must be made for
the variations in tolls sensitivities among commodities, ship sizes, and routes.
A pricing system for structuring tolls designed to meet the costs of competing
alternatives offers the greatest revenue potential for a sea-level canal.
31
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CHAPTER IV
EXCAVATION BY NUCLEAR METHODS
The initial PLOWSHARE cratering experiments and engineering studies conducted from
1958 through 1962, as well as a number of applicable nuclear weapons effects tests,
encouraged the hopes of the scientists and engineers involved that a practical nuclear
excavation technology would soon be forthcoming. An attractive potential application then
considered was the construction of a sea-level Isthmian canal; in 1963-1964 conceptual
studies and research in the new technology were extended to include this objective. Two
Isthmian canal routes, Route 17 in Panama and Route 25 in Columbia, having sparse
populations, remoteness from population centers, and apparently favorable topography,
appeared to meet the requirements of the embryonic technology.
Preliminary engineering estimates, made without on-site investigations, put nuclear
canal construction cost for Route 17 as low as $747 million — about one-third the
then estimated cost of conventional construction on Route 14. Route 25 was estimated to
cost more because only a portion was thought suitable for nuclear excavation. However, it
was recognized that the potential economies were contingent upon proof of the feasibility
of nuclear excavation by further research and experimentation and also upon favorable
results of comprehensive physical surveys of the engineering and nuclear safety features of
the selected routes.
There was optimism in 1964 that on-site studies of the routes and the planned program
of additional nuclear cratering experiments would establish the feasibility and desirability of
nuclear excavation, although the magnitude of the technical and political obstacles to
nuclear excavation was recognized by President Johnson’s advisers. Further, the United
States was being pressed by Panama to revise the 1903 Treaty. The urgency of determining
the feasibility of a sea-level canal was then deemed to warrant proceeding with on-site route
investigations while carrying out the additional nuclear cratering experiments needed to
develop a practical nuclear excavation technology.
The authorizing legislation requested by the President and approved by the Congress
contemplated extensive data collection on the two most promising nuclear routes, 17 and
25. Only limited field investigations of the routes for conventional excavation were provided
for as the available data were thought to be sufficient for feasibility studies. No field work
was planned for Route 8 inasmuch as evaluations based upon available data showed it to be
less suitable than other routes under consideration. The original authorization for the
planned studies was $17.5 million. This amount was later augmented to $24 million, in part
to expand the investigation of routes suitable for conventional excavation. The actual
expenditure was $22.1 million, of which approximately $17.5 million was devoted to the
nuclear routes, $3.0 million to the conventional routes, and $1.6 million to all other
activities.
33
SEDAN, July 6, 1962, 100 Kiloton — The Thermonuclear explosion occurred 635 feet below surface and excavated a
crater about 1200 feet in diameter and about 320 feet deep with a volume of about 6.5 million cubic yards.
FIGURE 10
Nuclear Excavation Technology
In 1964 knowledge of nuclear cratering physics was limited to single craters in alluvium
and rock. Row crater experiments had been conducted with chemical explosives only.
However, extensive knowledge of the radioactivity, fallout, seismic, and air blast phenomena
associated with nuclear excavation operations was available from a wide variety of nuclear
tests.
It had been estimated in prior Isthmian canal studies that the deep cuts through the
Continental Divide sections of the routes would require salvo yields in the tens of megatons
(Mt).* Such levels were considered troublesome, particularly from the ground motions that
might be induced. It was recognized in these studies that radioactivity from fallout could
require extensive evacuation precautions and present problems under the restrictions of the
Limited Test Ban Treaty. There was confidence, however, that the radioactivity effects
could be held to insignificant levels.
*Nuclear explosive equivalent of one million tons of the chemical explosive, trinitrotoluene (TNT).
34
The BUGGY I crater approximately 860 feet long, 250 feet wide, and 65 feet deep produced by the simultaneous
detonation of five nuclear explosives of approximately 1 kiloton each on March 12, 1968. The explosives were buried 135
feet deep and spaced 150 feet apart in hard rock on the U.S. Atomic Energy Commission’s Nevada Test Site. The arrow
points to a pick-up truck.
FIGURE 11
When the sea-level canal investigation was initiated in 1965, it was expected that
development of the nuclear excavation technology would be advanced sufficiently during
the course of the investigation to permit determination of its feasibility for canal
construction. The AEC’s PLOWSHARE program in nuclear excavation was expanded in
order that development of the technology would be phased with the Canal Study
Commission’s timetable. A program of some six to eight nuclear tests was considered the
minimum necessary to develop the technology.
Complementary theoretical and laboratory tests and studies were also programmed and
carried out. These related to all aspects of nuclear excavation, including the development of
clean devices and the probable behavior in cratering of the different materials not so far
tested — rock, saturated rock, and clay shales as found on the Isthmian routes.
Political and budgetary constraints caused the planned PLOWSHARE nuclear excava-
tion program to move slowly. Although the Canal Study Commission’s reporting date was
extended from June 30, 1968 to December 1, 1970, only three tests were carried out during
the Commission’s investigation. The data from them materially assisted the complementary
35
—
United States Air Force CH-3 Helicopter Lifting a Drilling Mast on Route 17
FIGURE 12
studies and provided corroborative data at yields approaching usefulness for practical
excavation projects. The higher yield nuclear cratering experiments of the magnitude
required for the Isthmian canal excavation, however, remain to be carried out.
Engineering and Nuclear Operations Surveys
The engineering and nuclear operations surveys of Routes 17 and 25 were carried out
essentially as planned except for unavoidable delays. A field office in the Canal Zone and
base camps on each route were established. The latter were augmented by small satellite
36
camps along the alinements. The personnel involved numbered more than 800 at the height
of field activities.
Four weather stations were built and operated in Panama and Colombia to acquire the
weather data needed for prediction of the effects of nuclear operations and for other
purposes. Very high altitude air studies were conducted, using balloon and rocket-borne
instruments. Surveys of existing buildings and other structures within projected areas of
significant ground motion were made to estimate structural response and damage.
Bioenvironmental studies in the various radioecological systems were carried out by
scientists of different fields (marine, terrestrial, agriculture, forest, freshwater, etc.).
The engineering data program included topographic surveys to establish the preferable
alinements and their elevations. The surface geology along each route was mapped and
subsurface borings were carried out to confirm or correct geological interpretations. Rainfall
and stream flow were measured. People were counted.
As usual,in such preliminary surveys there are areas where more data and longer
collection periods would have been desirable. The data obtained, however, provide a basis
for a number of findings not previously possible.
Detailed analyses of the nuclear excavation technology and its potential application to
specific canal routes are contained in Annex V, Study of Engineering Feasibility, and its
appendices. Several of the technical evaluations developed from the surveys of Routes 17
and 25 are summarized below. Discussions of the unique political, military, and economic
aspects of these routes are contained in Chapter VII, Analysis of Alternatives.
Route 17
1. Geological drilling on Route 17 found competent rock along approximately
three-fifths of the 50-mile route. Hard materials predominate throughout the 20-mile
Continental Divide reach on the north and for 10 miles through the Pacific Hills on
the south. The center 20 miles through the Valley of the Chucunaque River,
however, consist largely of clay shales. This material, if excavated to steep slopes,
softens and slides as it weathers. Slopes as flat as one unit of vertical rise for each 12
units of horizontal measurement probably are needed for long-term stability in the
deepest excavation. Such slopes cannot be produced by single-row explosive
excavation, and the chemical explosive experiments conducted thus far indicate that
it is unlikely that multiple-row techniques can be developed to produce flatter slopes.
For this reason, cost estimates had to be based on the assumption that the center
portion of Route 17 would require conventional excavation.
2. The portions of Route 17 which appear to be suitable for nuclear excavation are
currently estimated by the United States Army Engineer Nuclear Cratering Group to
require about 250 separate explosives with a total yield of 120 megatons. They
would be fired in some 30 salvos of varying total yields over a period of 3 years or
longer. The largest salvo would have a total yield of 11 megatons. These estimates are
approximations only, based upon the limited route data available and calculated
nuclear explosive effects determined by extrapolation of low-yield experimental data
available in 1969. The AEC is confident that these estimates could be reduced, both
in number of explosives and in total yield required.
37
.
e
'
Seed TE aes
Route 17 centerline trail through the Chucunaque Valley
FIGURES
38
Site survey base camp at Santa Fe Ranch, Route 17
FIGURE 14
3. Fallout predictions based upon meteorological conditions in the vicinity of Route 17
indicate that a land area of approximately 6,500 square miles containing an
estimated 43,000 persons would have to be evacuated during the period of nuclear
operations and for several months thereafter. This includes most of the area that
might be affected by ground shock or air blast, but precautions against glass breakage
and other damage in built-up areas would be required over a large area extending out
approximately 300 miles from the route. The AEC is confident, however, that a
significant reduction in the size of the area affected is possible.
4. Tidal currents in a partially nuclear excavated sea-level canal on Route 17 without
tidal checks would reach 6.5 knots in the conventional section.
Route 25
1. Geological drilling found competent rock through the Continental Divide reach at
the Pacific end of Route 25. This constitutes approximately 20 miles of the
alinement investigated. The greater portion of this 100-mile route passes through
39
alluvial material in the flood plain of the Atrato River. This reach is not suitable for
nuclear excavation, but is well suited for economical hydraulic dredging.
2. The portion of Route 25 that appears suitable for nuclear excavation is currently
estimated by the Corps of Engineers to require 150 individual explosives with a total
yield of 120 megatons. They would be detonated in some 21 row salvos over a period
of approximately 3 years. The largest salvo would total 13 megatons. The AEC
believes these estimates, like those for Route 17, could be reduced.
3. A land area of approximately 3,100 square miles containing an estimated 10,000
inhabitants would have to be evacuated to permit nuclear operations on Route 25.
As for Route 17, additional precautions would be required within a 300-mile radius
during actual detonations.
4. Tidal currents in a Route 25 sea-level canal without tidal gates would reach a
maximum of 3 knots.
Technical Feasibility of Nuclear Excavation of Routes 17 and 25
The Commission’s Technical Associates for Geology, Slope Stability, and Foundations
were asked to assist in the evaluation of the technical feasibility of nuclear excavation of
Routes 17 and 25. Their report is Enclosure 2 to this report. The following extract
summarizes their findings as to the feasibility of nuclear canal excavation:
SB reasbiliey of excavation by nuclear explosions is discussed in terms of: (1) the
present situation, i.e., the possibility of its being used with assurance for
interoceanic canal construction within the next ten years; (2) the requirements
for a continuing program of nuclear testing to assure future feasibility; and (3) the
possibilities of future applicability to weak rocks such as the clay shales of the
Chucunaque Valley. These discussions apply exclusively to the physical develop-
ment and configuration of craters which would result in a usable canal and
exclude all other effects of nuclear explosions such as seismic, air blast, and
radiological hazards.
(1) Present Feasibility
The Technical Associates are in unanimous agreement that the techniques for
nuclear excavation of an interoceanic canal cannot be developed for any
construction that would be planned to begin within the next ten years.
The reasons for this opinion are:
a. Extension of the scaling relations now established by tests to the much higher
yield explosions is too indefinite for assured design and the “enhancementâ€
effects due to saturated rocks and row charge effects now assumed have not been
proved by large scale tests. There is a definite possibility of a major change in the
mechanics and shape of the crater formed by the much higher yield explosions
required for the canal excavations as compared to extrapolations from the
relatively small-scale tests carried out to date.
b. The effects of the strength of rock on the stability of “fall-back†slopes and
the broken rock crater slopes projecting above the fall-back to the great heights
required for an interoceanic canal have not yet been established.
40
Drilling for subsurface geological data
FIGURE 15
Therefore, the Technical Associates conclude that nuclear excavation cannot
safely be considered as a technique for assured construction of an interoceanic
canal in the near future.
(2) Future Development
The economic advantages of nuclear explosions for excavation of the very deep
cuts required by an interoceanic canal are so great that the present ““Plowshareâ€â€™
program should be continued, extended, and pursued vigorously until definitive
answers are obtained. Assured application of this technology to design and
construction of an interoceanic canal will require an orderly progression of tests
up to full prototype size, including full-scale row charge tests, in generally
comparable rock types, terrain and environment. Such a program may well
require another ten to twenty years to establish whether or not nuclear
excavation technology can be used with positive assurance of success for
construction of a canal along Routes 17 or 25.
41
(3) Application to Excavation in Clay Shales
A growing body of knowledge and experience indicates that high slopes in clay
shales, as in the Chucunaque Valley, or in more competent rocks underlaid by
clay shales, as in parts of the existing canal, may have to be very flat for long-term
stability and to avoid the danger of massive slides in the first few years after
excavation. Some attempts have been made to produce such flat slopes by
elaborate explosive techniques, such as over-excavation in anticipation of slides,
multiple row charges, and successive series of explosions or “‘nibbling†techniques
for application to problems such as construction of a sea-level canal across the
Chucunaque Valley. The Technical Associates believe this to be a highly
unpromising line of investigation with minimal chances of developing procedures
that could be used with assurance in the foreseeable future.
Experimental channel excavated by chemical explosive row charges at Fort Peck, Montana
FIGURE 16
In a letter (Enclosure 3) to the Canal Study Commission near the end of the sea-level
canal studies, the Chairman of the Atomic Energy Commission reported that any decision to
construct a sea-level canal in the near future must be made without reliance upon the
availability of nuclear excavation. He expressed the AEC’s view that, given funds and
authorization, the technical problems of nuclear excavation could be solved within a
relatively short time; that each step which has been taken in developing nuclear excavation
technology has resulted in lowering the potential risk involved; that increased understanding
of the catering mechanism has increased belief in the potential benefit of this undertaking
42
for mankind; and that, if for any reason a decision to construct an interoceanic canal is
delayed beyond the next several years, nuclear excavation technology might be available for
canal construction.
It is clear that the technical feasibility of using nuclear explosives for Isthmian canal
construction has not been established and that any conclusion as to its technical feasibility
in the future for this purpose would be a speculative judgment of the potential of nuclear
excavation for the most sophisticated task that could be asked of it. It is equally clear that
the United States could not propose such excavation until the reliability of the technology
for such an application has been proved unconditionally.
Although mindful of, and in essential agreement with, the AEC’s prognosis of eventual
availability of a nuclear excavation technology, the Canal Commission believes that many
experiments will be required in combination with practical applications in smaller projects
before the necessary degree of confidence can be assured. Although there is a considerable
body of scientific and engineering opinion that the technology has already been sufficiently
developed for application to projects of moderate size, such as harbors and highway cuts, it
is the view of this Commission that its perfection for use in canal excavation on Routes 17
or 25 is many years away.
Acceptability of Nuclear Canal Excavation
The political constraints upon the use of nuclear explosives for canal excavation were
recognized at the time the Commission’s investigation was authorized by the Congress. It
was reasoned in the authorization hearings, however, that establishment of the technical
feasibility of nuclear canal excavation through experiments and practical applications of this
technology within the United States would ease removal of treaty constraints and other
political obstacles to its use for canal excavation. This reasoning was valid in 1964 and
remains so today, but neither technical nor political developments have proceeded at the
expected pace. Consequently, the international and local obstacles to nuclear canal
excavation are essentially unchanged from 1964. Although there have been encouraging
developments in international treaties bearing upon nuclear excavation, the Limited Test
Ban Treaty constraints remain in effect, and the Commission’s studies indicate that
prospective host-country opposition to nuclear canal excavation is probably as great if not
greater than estimated in 1964.
The Limited Test Ban Treaty enjoins its signatories from conducting any nuclear
explosion which causes radioactive debris to be present outside the territorial limits of the
state under whose jurisdiction or control such explosion is conducted. The United States
recognizes, because there seems to be no possibility of excavating an Isthmian canal with
nuclear explosives without transport of some radioactive material across territorial
boundaries, that this provision could prohibit nuclear excavation of a sea-level canal. It was
also recognized by the United States and other signatories, including all canal-site countries,
that nuclear excavation for peaceful purposes could later become practicable and mutually
acceptable. Consequently, the Treaty was drafted to provide simple amendment procedures,
requiring only the concurrence of the United States, Great Britain, Russia, and a simple
majority of the parties to the Treaty.
Two other treaties bearing upon control of nuclear explosions have come into force
subsequent to the ratification of the Limited Test Ban Treaty. Both contain specific
provisions designed to facilitate the use of nuclear explosions for peaceful purposes,
including excavation, when the technology is developed and when mutually acceptable
procedures are established. In the Treaty of Tlatelaco (the Latin American Nuclear Free
Zone Treaty) fifteen Central and South American countries, including all Isthmian canal-site
43
countries, agreed to exclude nuclear weapons from their territories but specified conditions
for mutual cooperation in the employment of nuclear explosives for peaceful purposes.
The international agreement most encouraging for the future development of nuclear
excavation technology is the Nuclear Non-Proliferation Treaty now ratified by the three
principals and a majority of the signatories of the Limited Test Ban Treaty. Article V of this
Treaty provides that:
Each Party to the Treaty undertakes to take appropriate measures to ensure
that, in accordance with this Treaty, under appropriate international observation
and through appropriate international procedures, potential benefits from any
peaceful applications of nuclear explosions will be made available to non-nuclear-
weapon States Party to the Treaty on a nondiscriminatory basis and that the
charge to such Parties for the explosive devices used will be as low as possible and
exclude any charge for research and development. Non-nuclear-weapon States
Party to the Treaty shall be able to obtain such benefits, pursuant to a special
international agreement or agreements, through an appropriate international body
with adequate representation of non-nuclear-weapon States. Negotiations on this
subject shall commence as soon as possible after the Treaty enters into force.
Non-nuclear-weapon States Party to the Treaty so desiring may also obtain such
benefits pursuant to bilateral agreements.
The obligation assumed by the nuclear powers under Article V creates an environment
conducive to gaining international agreement upon modification or interpretation of the
Limited Test Ban Treaty to permit nuclear excavation projects. Discussions at the technical
level between United States and Russian representatives in 1969 and 1970 indicated that
Russia has great interest in the nuclear excavation technology and may be considerably
ahead of the United States in its development. These conferences produced joint statements
in favor of continued discussion of the technical aspects of peaceful nuclear excavation
technology; specific arrangements for dealing with the constraints of the Limited Test Ban
Treaty remain to be initiated.
Opposition to release of additional radioactive material in the world environment
probably would not be stilled by negotiation of a Limited Test Ban Treaty modification
authorizing peaceful nuclear explosive excavations. Many people throughout the world,
including some scientists, may remain convinced that the levels of radioactivity expected to
be released to the environment would not be acceptable.
The Commission’s Study of Foreign Policy Considerations (Annex I) concluded that
within the canal-site countires, fear of the effects of nuclear explosions and fear of economic
dislocations could create major obstacles to nuclear canal excavation. The problems differ in
magnitude among countries, but none appears easily overcome.
It was found that more than a half-million people would have to be evacuated from
areas of Nicaragua and Costa Rica to permit nuclear excavation of Route 8. The
Commission then concluded that nuclear excavation of this route should be given no further
consideration.
The evacuation requirements for Route 17 are formidable at this time and will grow
more so with the passage of time as the Darien area develops economically. The evacuation
area includes the homelands of Choco and Cuna Indian tribes with primitive cultural
attachments to their lands that could not be broken easily. A larger area extending to
Panama City on the west and Colombia on the east would be subject to possible ground
motion and airblast damage. The potential damages to masonry structures and window
44
panes outside the evacuation area would not be costly to repair, but the inconvenience to
thousands of inhabitants could be considerable. An additional major obstacle for Route 17
construction is the prospect of economic losses and dislocations in moving canal operations
away from Panama’s metropolitan centers (See Chapter VII). These economic disturbances,
the imagined dangers of nuclear excavation, and the objections to evacuation of inhabitants
from the Route 17 area could cause widespread Panamanian opposition to a Route 17 canal.
The employment of nuclear explosives in the Continental Divide area of Route 25 in
Colombia would involve lesser problems of acceptability than would nuclear excavation in
Panama. The land area of evacuation would be only one-half as large. Although many of the
inhabitants of this area are Choco Indians whose removal would present problems similar to
those expected in Panama, the total evacuation requirement would involve only one-quarter
as many people. The required precautions against airblast and seismic shock would affect an
area of nearly the same magnitude as for Route 17.
The problems of public acceptance of nuclear canal excavation probably could be
solved through diplomacy, public education, and compensating payments. However, the
political and financial costs to the United States in obtaining such acceptance could offset
any potential saving in construction costs and gains in intangible benefits. Obviously, a wide,
deep channel constructed at low cost by nuclear excavation would have specific advantages
in military security and ship-size capacity in comparison with a conventionally excavated
canal. However, compensation costs unique to the dislocations and damages associated with
nuclear excavation, costs that not only would be incurred prior to and during construction
but also might be incurred for many years thereafter, would remain unknown quantities
until actually negotiated. Although pioneering in such a massive nuclear excavation project
would certainly add to the scientific and engineering stature of the United States,
proceeding with nuclear construction against extensive minority opposition would detract
from that prestige.
Summary
In the judgment of the Commission, the current prospects of nuclear canal excavation
are:
— At the present state of development of the nuclear excavation technology the
feasibility of its use in excavation of an Isthmian sea-level canal has not been
established. It is possible that the technology can be perfected to where such an
application is technically feasible, but many more nuclear excavation experiments
are needed. Technical, political, and budgetary constraints probably will continue
to slow development of the technology.
— The outlook on balance favors eventual attainment of international acceptance of
practical applications of the nuclear excavation technology, but the time needed to
establish the necessary arrangements under the Limited Test Ban Treaty is
unpredictable.
— It is not possible at this time to determine whether a nuclear excavated canal would
be acceptable to Panama. The use of nuclear excavation on Route 17 may be
precluded by economic developments in the vicinity.
— It is unlikely that nuclear excavation will become technically feasible on enough of
Route 17 to permit substantial cost savings in comparison with the cost of
all-conventional sea-level canal construction elsewhere in Panama.
45
— It is probable that the technical feasibility and cost advantages of the use of nuclear
explosives for excavation of portions of Route 25 in Colombia could be established
by an adequate program of experiments. The future acceptability of such a canal in
Colombia cannot now be determined.
46
CHAPTER V
GENERAL CRITERIA
Evaluation of the costs of the several routes considered for construction of a sea-level
canal required that the basic criteria of design and construction be the same for each route.
These criteria include: the maximum size of ship to be accommodated; the maximum
acceptable velocity of tidal currents; the size and shape of the navigation prism; the side
slopes of the excavation above the water surface required for stability; and the methods of
construction.
Size of Ships
Ships up to only 65,000 deadweight tons* can be passed through the locks of the
Panama Canal and very few ports in the United States can accommodate larger ships. The
world fleet, however, now includes many tankers and dry bulk carriers twice this size or
bigger. The Shipping Study Report (Annex IV) predicts that the proportion of such ships in
the world fleet during the period from 2000 to 2040 would probably be as shown in Table
ple
The Commission concluded from these data that the demands of future world
commerce would adequately be met by providing for the transit of ships of 150,000 DWT
under all normal conditions of operation of a sea-level canal between the Atlantic and
Pacific Oceans.
TABLE 11
FORECAST PROPORTIONS OF SUPER SHIPS IN THE WORLD FLEET
Size Equaled or Exceeded — DWT
100,000 150,000 200,000
Freighters
Bulkers
Tankers
*See Footnote on page 25, i
47
Transit Capacities
Traffic through the Panama Canal has built up to more than 15,000 ships per year. It is
estimated by the Panama Canal Company that the future limit, without construction of
additional locks, will be 26,800 transits per year.
Recent trends indicate that the average amount of cargo per ship will increase more
rapidly in coming years than will the number of transits because of the increasing numbers
of large bulk carriers and tankers appearing in the canal ship mix. This divergence of the
growth rates of cargo tonnages and ship transits would undoubtedly become greater with
the opening of a sea-level canal that could accommodate ships of 150,000 DWT or greater.
The Commission concluded from the studies described in Annex IV that the demands
of world commerce would be well satisfied by providing for 35,000 transits per year initially
by means that would not preclude later expansion to at least double or even treble that
number.
Navigation and Tidal Currents
Safety of navigation of a sea-level canal will be a controlling factor. The existence of
currents will impose few restraints on the passage of small ships but very large ships might
be unmanageable in an unrestricted canal under adverse tidal conditions.
Tidal fluctuations in the Atlantic along the Isthmus of Panama are small and somewhat
erratic. The tides on the Pacific side, on the other hand, are large and quite regular. The
resulting variations in level for a typical period are shown on Figure 17. The mean level of
the Pacific at Balboa averages eight inches higher than in the Atlantic at Cristobal.
If an unrestricted sea-level canal were built to connect these oceans, there would thus
be oscillating flow with net movements of water from the Pacific to the Atlantic. The
currents so produced would depend on the difference in levels at the time, on the length of
the canal, and on the size and shape of the navigation prism. The magnitude and direction of
such currents at all points along the several canals considered are set forth in Annex V
together with a description of the mathematical methods used to compute them. It was
found, for example, that on Route 10 the velocities of flow would be greatest at the
Atlantic entrance and would reach 5.1 knots on a few days each year and 3.7 knots under
average tidal conditions. Velocities of flow in a nuclear excavated canal would be
substantially greater, because of its greater cross-sectional area.
The Commission conducted extensive studies to determine the controllability of ships,
with consideration of the effects of currents, in a navigation prism of restricted width and
depth; these included a review of operating conditions in existing canals and restricted
waterways, a comprehensive mathematical analysis, and a series of tests of large-scale ship
models in a confined channel.
These studies indicate that:
1. The desirable speed of ships with respect to the land is 7 knots, equivelant to 8.05
statute miles per hour.
2. The speed of ships with respect to the water should not be less than 4 knots for
ships smaller than 50,000 DWT nor less than 5 knots for larger ships.
3. At least one powerful tug should be provided for control of each ship long enough
to cause blockage of the channel should the forward speed of this ship become less
than the velocity of the following current.
4. Powerful tugs should also be provided for assistance in stopping and for additional
control of all large ships and of small ships of limited maneuverability.
48
STAGE IN FEET PRECISE LEVEL DATUM
19 20 21 22 23 24 25
2 2
in hs ian a len oem EANISEAIEEVE Lin is nian nn, baa
0 ae eee LF ES _O EAE _ F O Le eZ 0
-2 1 ! 1 1 1 1 1 ! I 1 1 1 ! =2
ATLANTIC TIDE (CRISTOBAL)
= =
N
=
nN
AN
MEAN SEA LEVEL
CHA ANON B@AMWAO
CHA ANON A DOD
=
SEPTEMBER 1957
PACIFIC TIDE (BALBOA)
SEVEN DAY TIDE RECORD
FIGURE 17
49
Tug assistance is required for all large ships in the present canal and is expected to be similarly required in a sea-level canal.
FIGURE 18
Tidal Checks
The uncertainty of safety of navigation under all tidal conditions led to consideration
of anew concept: the installation of a tidal control structure at each end of a long restricted
reach to limit the velocities of flow in a sea-level canal. It is contemplated that one structure
and gate would be located close to the Pacific entrance and another 24 to 25 miles north
thereof. The check gates would be moved alternately into position across or out of the
channel at intervals of 6.2 hours or some multiple thereof when the Pacific is at the same
level as the Atlantic. Under these conditions, the maximum velocity of flow would be
approximately 2 knots at the Pacific entrance and less elsewhere. It is also contemplated
that structures for gates would be built close to the Atlantic entrance where, if a gate were
installed and employed alternately with the Pacific gate, the maximum velocity could be
held to approximately 3 knots.
The contemplated tidal controls do not resemble the tidal lock and by-pass arrangement
proposed in the 1947 Study. The gates would not function as locks; no lifting of ships
would be involved, and no ship would have to stop in transit. They would be operated as a
pair; one would be rolled or floated into position across the channel at an appropriate time;
50
ae SEEN
Scale model of a 250,000 DWT tanker undergoing tests in the Naval Ship Research and Development Center to determine
the controllability of large ships in a sea-level canal.
FIGURE 19
the other would be moved simultaneously back out of the way of oncoming ships. Their
position would then be reversed 6.2 or 12.4 hours later.
These tidal check gates would not have significant military vulnerability. Even if one or
both should be rendered inoperational by sabotage or military attack, they could easily be
removed from the channel. The higher tidal currents then encountered would not materially
impede the movement of warships and military cargo vessels through the canal. Figure 20 is
an artist’s sketch of a tidal check structure at one end of the bypass in a sea-level canal.
The use of tidal checks at the ends of a one-way channel would require that all ships be
transited in convoys, scheduled to arrive at a check just after it is opened so that no ship
would have to stop or materially change its speed. These times will not be random; they can
be predicted accurately many months in advance after a few observations are made to
measure the lag in time with respect to the Pacific tides.
The length of each convoy will necessarily be limited by the distance between the tidal
checks. It has been found, as described in Annex V, that 4 ship lengths from bow to bow
would be a satisfactory average spacing. This distance between ships plus an allowance of at
least one mile of clear space ahead of the first ship in a convoy and of one-half mile behind
the last ship gives the following for certain critical locations of checks:
51
Artist’s Sketch of a Tidal Check at the Entrance to a Bypass Channel
FIGURE 20
TABLE 12
MAXIMUM NUMBERS OF SHIPS IN CONVOYS
WITH TIDAL CHECKS IN USE
DISTANCE IN MILES NUMBER OF SHIPS
BETWEEN CHECKS IN CONVOY
The shortest distance shown in this tabulation is that between the ends of a bypass,
consisting of 2 separate one-way channels, that could be constructed to augment the
transit capacity of a single-lane channel on Route 10. The largest distance is that between
the Pacific and Atlantic entrances of a canal on either Route 10 or Route 14. The
intermediate distance is the longest that would permit the use of an 18.6 hour convoy cycle;
it also would put a tidal check at the Atlantic end of a future bypass on Route 10.
The Commission elected to include in the designs structures for support of tidal gates at
or near the ends of each sea-level canal under consideration except Route 25, at each end of
S2
the potential bypass on Route 10, and at a point 24 miles north of the Pacific entrance of
Route 14.
Figure 21 schematically portrays the location and operation of the tidal checks in the
single lane configuration. Figure 22 similarly shows the operation of the bypass
configuration.
Cross Section of Navigation Prism
The Commission recognized early in its studies that the transit capacity of a single-lane
channel on all but the very long routes would meet all probable demands for many years
and that this capacity could most economically be augmented by the addition of a bypass.
The Commission also recognized that the cost of construction would be increased greatly by
providing for two-way traffic, because the width of a two-way channel should be more than
double the width of a single-lane canal.
It was developed from the comprehensive studies described in Annex V that any of the
following combinations of ship speed, channel width, and channel depth would provide
equal navigability for 150,000 DWT ships:
TABLE 13
SINGLE-LANE CHANNEL DIMENSIONS FOR
SAFE NAVIGATION OF 150,000 DWT SHIPS
Speed in Water Bottom Width Water Depth
Feet Feet
9 Knots
11 Knots
The Commission recognized that the 9-knot ship speed in the water was for the
condition of 2-knots current with tidal checks in service and that the 11-knot ship speed was
based on passage against a 4-knot current. It accepted, however, the recommendation of its
Engineering Agent that this higher velocity be used for cost estimating purposes because it
may be found practicable over the years to operate in currents of this velocity, and because
it would permit passage of 250,000 DWT ships under controlled conditions.
The Commission, therefore, elected to use for all conventionally excavated channels a
single-lane navigation prism, having a bottom width of 550 feet, a center depth of 85 feet,
and a depth at the sides of 75 feet.
Side Slopes of Excavation
At the time the Panama Canal was built there was little knowledge of soil and rock
mechanics and much steeper slide slopes were used than would now be customary. Most of
53
AM AM PM PM PM
ATLANTIC OCEAN
APPROACH
CHANNEL
Two lanes
2 miles
TIDAL
GATE
SLOT
1 =f
s)~hCUMD X
=
S .
Z|:
ols . I
=e s .
o|° = 2 . I
7) g 3 E = i
w — 2
a E es S e I
iS =
N = = = I
= o =
=|} 2 : 1
a .
= © I
S 1
=
5 ! !
= I
s
ey 2
a .
S35) = 1
qi/cs =]
Ss =
Ble = 1
= pene Seis
of a s I >
< = ls
Ss He
= = =
a . 1 Oo
a . —
<
=I
.
\ al 1
PACIFIC OCEAN Nh
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6
Gates move atmean Convoy 1 clears Convoy 2 is about Gates move at mean Convoy 2 clears Gates move at mean
tide as Convoy 1 is one-way channel to enter one-way tide as Convoy 2 is one-way channel as tide as Convoy 3is
between them and channel trom the between them and convoy 3 starts to between them and
moving toward the Atlantic. moving toward the enter it. moving toward the
Atlantic Pacific Atlantic
11:58 AM 9:43 PM
PACIFIC TIDE TRACE
ROUTE 10
SINGLE-LANE
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
18.6-HOUR CYCLE
FIGURE 21
54
=
oO
oO
oc
a
a
?
CHANNEL
Two lanes
DESIGN CHANNEL
Two lanes
APPROACH
CHANNEL
I
~ 3:00 Am
Two lanes
2 miles
AM
Convoy 1b
soeeees a
Convoy 1a
Step 1
Convoys 1a and 1b
are in the two-lane
bypass section
about to enter the
one-lane sections as
the gates shift at
mean tide
Tidal
Convoy 2b
Step 2
Convoys 1a and 1b
clear the one-lane
sections and con-
voys 2a and 2b
enter the one-lane
sections behind
them.
Gates
PACIFIC
ATLANTIC OCEAN
Step 3
Convoys 2a and 2b
are now entirely
within the bypass
section approaching
the gates which shift
on the mean tide as
they approach.
ROUTE 10
BYPASS
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
6.2 HOUR CYCLE
FIGURE 22
55
OCEAN
Convoy 3a
——
9000000000)
Convoy 3b
=== =< =—=—
Step 4
Convoys 2a and 2b
clear the one-lane
sections and con-
voys 3a and 3b
enter the one-lane
section behind
them.
PACIFIC TIDE TRACE
00000ssees D>
MEAN NNN sss
I
Step 5
Convoys 3a and 3b
are now entirely
within the bypass
section approaching
the gates which shift
on the mean tide as
they approach. This
is identical to Step
1.
the slides along the Panama Canal have stemmed from this cause.
The Technical Associates of the Commission, after review of geologic and other
conditions along the existing canal and the several routes for a sea-level canal, recommended
that the slope criteria given in Table 14 be used in calculations of the quantities of material
to be excavated.
The proper side slopes for deep excavation in hard rock and soft rocks were also
investigated by the Engineering Agent, as described in Annex V. The findings of this study
were consistent with the recommendations of the Technical Associates. The Commission
accepted, for purposes of evaluating the costs of construction of a sea-level canal on each of
the several routes, the recommended slope criteria.
Construction Methods
The potential of nuclear excavation is discussed in a separate chapter; hence, this review
of construction methods is limited to conventional procedures.
Excavation will be the largest item of cost of a sea-level canal on any of the routes
considered, because of the tremendous volumes of material to be removed. The unit costs
(dollars per cubic yard) will vary widely depending on the nature of the materials and
whether or not the channel must be excavated below water. The unit cost of excavation of
hard rock will naturally be more than that of soft rock. The unit cost of removal of any
material will be less if the work can be done above water than if it has to be dredged, except
for unconsolidated deposits at moderate depths.
The Commission recognized that, in the years before actual construction of a sea-level
canal would be started, there probably will be major changes in methods and improvements
in equipment, but it directed that all estimates of cost be based on proved methods of
construction and on only foreseeable improvements of equipment now available. Four
general methods of excavation and their application to the different routes are described in
Annex V. These methods are:
1. Power shovels and truck haul disposal for isolated portions of the work and to
remove the tops of hills.
Power shovels and railroad haul disposal for the major portion of all excavation
above water.
3. Barge mounted shovels or draglines or bucket dredges and barge haul disposal of
material excavated below water.
4. Hydraulic dredges and pipeline disposal of unconsolidated sediments below water.
i)
56
TABLE 14
RECOMMENDED SIDE SLOPES OF EXCAVATIONS FOR
DIFFERENT MATERIALS AND HEIGHTS
Nature of Material Side Slopes of Cut
Horizontal + Vertical
High Quality Rock 0.375 Overall Including
Construction Benches
Intermediate Quality Rock 0.625 Overall Including
Construction Benches
Low Quality Rock Height of Cut in Feet
Such as Clay Shale 100 200 300 #400
Condition A
Condition B
Condition C
Condition A: For locations where the canal would be remote from the
existing canal. (The existing canal would be available for
use during a proving period.)
Condition B: For locations where the canal would be separate from the
existing canal but in close proximity. (Excavation would be
performed in the dry and gradual drainage would be possible
during construction. An observational period would be
available prior to the canal becoming operational.)
Condition C: Locations where the canal would be adjacent to the existing
canal in an area with a history of slides. (The area would have
undergone long-term creep, and the slopes would be subject
to rapid drawdown. The maintenance of traffic on the
Panama Canal during construction is considered.)
SV
Earth slide blocking the Panama Canal in the Gaillard Cut, October 1915
FIGURE 23
58
CHAPTER VI
ENVIRONMENTAL CONSIDERATIONS
Construction of a sea-level Isthmian canal would impact on the land and ocean
environments in several ways. The physical effects can be estimated with some confidence
for both. The total effects upon land ecology can also be estimated with confidence, but the
effects upon ocean life are now uncertain because of the dearth of knowledge of the
regional ocean ecology.
The Land Environment
Canal excavation on any route would require clearing a right-of-way across the Isthmus
and disposal of great volumes of spoil on land and off-shore. These effects from
conventional excavation would extend a few thousand yards from the canal routes; the spoil
areas and destruction of forested areas incidental to nuclear excavation would be more
extensive. The excavation and spoil disposal plans for each conventionally excavated route
provide for containment of most spoil in areas where runoff would be least harmful and
where the fill would be most useful.
Stream courses would be altered where they intersect a canal on any route.
Construction of a sea-level canal on either Route 10 or Route 14 would divide Gatun Lake;
in the case of Route 10 there would be no material change in total area, but on Route 14
the remaining surface area would be about 62 square miles as compared to the present area
of 165 square miles.
The Panama Canal is already a barrier to faunal migration along the Isthmus. Any new
canal would be an added barrier.
Detailed estimates of the areas that would be affected on each route are contained in
Annex V, Study of Engineering Feasibility, together with specific estimates of potential
environmental effects. It can be concluded from these estimates that all permanent effects
on land areas would be limited to the immediate vicinity of the canal routes and would
result in no harmful ecological changes of significant magnitude. For the conventionally
excavated routes, the potential changes of the land environment and the freshwater ecology
appear to be less than those that were created by construction of the existing canal which
required the creation of Gatun Lake.
Medical experience in Central America and medico-ecologic studies performed for the
Commission have demonstrated the need for stringent and continuing preventive-medicine
measures and a responsive medical support program. Insect and rodent control, waste
disposal, and health education would be particularly important. Immunization would be
directed primarily against yellow fever, smallpox, typhoid fever, and tetanus. A special
effort would have to be made to control malaria and other parasitic diseases, enteric
diseases, and other tropical ailments. The present conditions in the Canal Zone demonstrate
that a healthy environment can be achieved with a well planned and executed medical
program.
59
The Ocean Environment
Physical Effects
The permanent physical changes, e.g., temperature, currents, and salinity, to the ocean
environment as a result of opening a sea-level Isthmian canal would be small and limited to
areas adjacent to the canal entrances. The water level on the Pacific side, twice each day, rises
from 5 to 11 feet above and falls 4 to 10 feet below that on the Atlantic side. A sea-level
canal without tidal control structures would thus have strong currents that would change
direction twice each day with the rise and fall of the tides. While no single tidal phase would
endure long enough to cause a complete flow-through of water from one ocean to the other,
there would be a gradual net transport of water from the Pacific to the Atlantic because of
the slightly higher mean sea level of the Pacific. The transported water, however, would be
drawn from the upper levels of Panama Bay where it is already within a few degrees of the
water temperature on the Atlantic side. It would tend to become warmer as it moved back
and forth in the canal until it ultimately emerged at the Atlantic end. The predicted effects
on the receiving ocean’s temperatures or currents are insignificant.
Spoil disposal and breakwater construction would considerably alter the existing shore
configurations and fill in large offshore areas. However, similar operations affected almost as
large an area in the construction of the present canal. Colon on the Caribbean side and Fort
Amador on the Pacific side were once ocean areas. No harmful environmental effects have
been identified with these large landfills.
Underwater excavation on Route 14 would have a very substantial effect on the water
in Gatun Lake; there would be some effect also caused by underwater excavation in the
approaches to any canal. Excavation in the dry, however, which would represent most of
the work on Route 10, could have only a nominal effect upon ocean areas near the
entrances. It is unlikely that sediment would be carried in canal flows, predominantly from
the Pacific to the Atlantic, in excess of the sediments that would reach the oceans naturally.
Biotic Interchange
An unobstructed sea-level canal across the Isthmus would allow relatively easy passage
of marine organisms. Certain forms of marine life now pass through the Panama Canal even
though Gatun Lake provides a highly effective biotic barrier. Barnacles and other immobile
organisms are carried through on the hulls of ships, and a variety of small plants and animals
is carried in ballast water from one ocean to the other. Transfers of marine life by these
means have been taking place continuously for more than 50 years. No harmful results have
yet been identified in either ocean as resulting from them. However, linking the oceans with
an unobstructed salt water channel would greatly facilitate the movement of these and other
organisms.
Taxonomic studies indicate that the Atlantic and Pacific Ocean species along the
Isthmus are closely related, even though few are identical. The similarity results from the
linking of the Atlantic and Pacific Oceans until recent geologic time, perhaps 3 million
years ago. Concern has been expressed about the potentially undesirable biologic
consequences when such closely related species are allowed to intermingle and about the
ecological consequences of the movement of marine organisms generally. Marine biologists
are not in agreement on this subject; their predictions range from disaster to possible
60
beneficial results.
Because of the great divergence of views on the ecological consequences of a sea-level
canal, the Commission had a study made of the potential effects. This study, a limited one
because of time and fund constraints, was accomplished by the Battelle Memorial Institute
(BMI) in association with the Institute of Marine Sciences of the University of Miami. The
ocean populations on both sides of the Isthmus were studied, giving special attention to the
fish and crustaceans that are important to commercial and sport fishermen. The potential
transport of water, chemicals, sediment, and planktonic organisms between the oceans was
mathematically modeled and the resultant effects postulated. The BMI findings are
summarized as follows:
On the basis of the limited ecological information currently available we were
unable to predict the specific ecological consequences of marine mixing via a
sea-level canal. Preliminary modeling studies indicate that the net flow of water
would be from the Pacific to the Atlantic. This would result in minor
environmental changes near the ends of the canal and near the shore to the east of
the Atlantic terminus. Passive migration of planktonic organisms would occur
almost entirely in the same direction. Active migration of nekton could occur in
either direction, but environmental conditions in the canal would favor migration
from the Pacific to the Atlantic. We have found no firm evidence to support the
prediction of massive migrations from one ocean to another followed by
widespread competition and extinction of thousands of species.
Evidence currently available appears to indicate a variety of barriers to migration
of species from one ocean to another and/or the subsequent establishment of
successful breeding colonies in the latter. Environmental conditions in the canal
would constitute barriers to the migration of both plankton and nekton, and the
effectiveness of these barriers could be enhanced by engineering manipulations of
freshwater inputs to the canal and other artifical means. The marine habitats and
biotic communities at the opposite ends of most proposed sea-level canal routes are
strikingly different. Where similar habitats do occur on both sides of the Isthmus,
they are already occupied by taxonomically similar or ecologically analogous
species. These differences in environmental conditions on the two sides of the
Isthmus and the prior occupancy of similar niches by related or analogous species
would constitute significant deterrents to the establishment and ecological success
of those species which may manage to get through the canal.
It is highly improbable that blue-water species like the sea snake and the
crown-of-thorns starfish could get through the canal except under the most unusual
circumstances. On the other hand, we can be fairly certain that some Pacific species
could pass through the canal and could become locally established in the Pacific
waters of the Atlantic. It is also improbable that these species would be able to
survive in the Atlantic outside the region of environmental modification due to
water flow through the canal. The Pacific species most likely to become established
along the Caribbean shore are those of estuarine and other shallow-water habitats,
the very habitats that have been least thoroughly studied.
To improve the precision and reliability of these and similar ecological
predictions would require additional information and quantitative data which
61
could be provided only by a comprehensive program of field, laboratory, and
theoretical (modeling) studies. Extensive taxonomic surveys would be required to
improve our knowledge of the biota of the Tropical Western Caribbean and
Tropical Eastern Pacific. Except for a few economically important species,
ecological life history data are virtually non-existent. Basic biological studies
would be required to obtain such information. The geographical extent and
physiochemical characteristics of the marine habitats on the two sides of the
Isthmus are imperfectly known from a few cursory surveys. The species
composition and functional-ecological structure of the biotic communities that
characterize these habitats are imperfectly known and inadequately understood.
The parameters required to predict the flow of water and plankton through the
canal have not been adequately measured. The processes of migration, establish-
ment, and competition have been but little studied and are not well understood. To
remove these deficiencies in our knowledge would require a comprehensive,
long-term program of well-coordinated physical oceanography, marine ecology, and
basic marine biology studies.
The risk of adverse ecological consequences stemming from construction and operation
of a sea-level Isthmian canal appears to be acceptable. Since it is not possible to determine
the specific ecological effects without extensive studies before, during, and after
construction, the Commission requested the National Academy of Sciences (NAS) to
recommend a program of long-term studies to be undertaken if the decision is made to build
a sea-level canal. The complete NAS report and recommendations, together with the report
of the BMI study, are included in Appendix 16 to Annex V, Study of Engineering
Feasibility.
Should future research indicate the need for a biotic barrier in addition to tidal gates, it
would be possible to install a temperature or salinity barrier. No such barrier was included in
the designs, because the need for anything in addition to tidal gates has not been
established. A thermal barrier created by discharge of hot condenser water from a power
plant into the canal between the tidal gates would be feasible, although the costs would be
high. Delivery of fresh water from Gatun Lake into a Route 10 or Route 14 sea-level canal
between the tidal gates would be practicable, but the available supply of water is limited.
Continuous operation of tidal gates on either Route 10 or Route 14 would accommodate all
potential traffic past the year 2000, by which time the consequences of increased migration
of biota through the canal should have been determined.
Combined Effects
The environmental impact statements required by Section 102 of the National
Environmental Policy Act of 1969 (Public Law 91-190) are included in Annex V, Study of
Engineering Feasibility. These statements cover not only the effect of mixing the oceans but
other environmental changes which could be expected as a result of constructing a sea-level
canal.
62
CHAPTER VII
ANALYSIS OF ALTERNATIVES
The choice of a feasible sea-level canal excavated by conventional means is limited to
Routes 10 and 14. In the analyses which follow these two alternatives are examined in
detail.
The route technically most promising for construction using nuclear explosives is Route
25 in Colombia; this is analyzed for possible future consideration, should the feasibility of
nuclear excavation eventually be established. A limited analysis of Route 17 is also included,
although its selection is considered unlikely.
As a basis for evaluating the incremental costs and benefits of a sea-level canal, an
analysis of augmentation of the existing lock canal is also provided.
Each of these alternatives is evaluated on the bases of its engineering feasibility, cost,
capacity, expandability, political acceptability, and its defense aspects.
Routes 5, 8 and 23 are analyzed only briefly, inasmuch as they are clearly less desirable
than other routes.
A brief description of the capabilities of the present lock canal is provided as a point of
departure.
The Panama Canal
The existing lock canal (Route 15) consists of short sea-level approaches to an elevated
midsection formed by Gatun Lake, which is regulated between elevations 82 and 87 feet
above sea level (Figure 24). The Gatun Locks on the Atlantic side consist of parallel twin
locks of three equal lifts. On the Pacific side there are two lock structures — a double lift at
Miraflores which raises transiting vessels to an intermediate pool called Miraflores Lake, and
a single lift at Pedro Miguel raising the vessels to the level of Gatun Lake. All lock chambers
are 1,000 feet long, 110 feet wide, and at least 41 feet deep. The lock dimensions limit
transits to ships with lengths of less than 1,000 feet, beams of not more than 106 feet, and
drafts of less than 40 feet (approximately 65,000 DWT). Its annual capacity is now limited
by the available water supply to approximately 18,000 transits per year. The ultimate
capacity of the existing locks, upon completion of the long-term improvement program of
the Panama Canal Company, is estimated to be 26,800 annual transits. This program.
involving costs of approximately $100 million, includes provisions for pumping sea water
into Gatun Lake or recirculating lockage water.
Alternatives Eliminated from Further Consideration
Routes 5, 8, 17, and 23 were found to have disadvantages of sufficient magnitude to
eliminate them from consideration as alternatives to other routes. The reasons for doing so
are briefly summarized. Details are in the Annexes to this report.
63
CARIBBEAN
SEA
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SCALE IN MILES
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FIGURE 24
THE CANAL ZONE
SCALE IN MILES
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DEPTH IN FATHOMS
64
al ST ERA PO ON a a
Gatun Locks at the Caribbean end of the Panama Canal
FIGURE 25
Widening the Panama Canal channel from 300 feet to 500 feet was completed in 1970.
FIGURE 26
65
we
Miraflores Locks and excavation for third locks at left. Pedro Miguel Lock and Gaillard Cut are in the background.
FIGURE 27
The Panama Canal is now lighted throughout its length and operates around the clock.
FIGURE 28
66
Route 5 Lock Canal (Figure 29)
Data available from 1931, 1947, and 1964 studies of the 167-mile route in Nicaragua
indicate that a lock canal capable of accommodating 110,000 DWT ships and having
approximately the same annual transit capacity as the existing Panama Canal would cost
about $4 billion. A lock canal designed to meet the 150,000 DWT ship size and 35,000
annual transit capacity criteria would cost much more.
Route 8 Sea-Level Canal Excavated by Either Nuclear or Conventional Excavation
A sea-level canal on Route 8 through Nicaragua and Costa Rica (Figure 29) would cost
an estimated $5 billion to construct by nuclear methods, if available, and $11 billion by
conventional methods. This latter cost is prohibitive, and nuclear excavation is infeasible for
the reasons given in Chapter IV.
Route 17 Sea-Level Canal Excavated by a Combination of Nuclear and Conventional
Excavation
Route 17, approximately 100 miles east of the present Panama Canal (Figure 30) is
remote from Panama’s developed areas — an essential requirement for nuclear excavation.
Approximately 30 miles of its length through the high elevations (that involve the greater
portion of the total excavation volume) appear technically suitable for nuclear excavation.
Estimated construction costs, assuming partial nuclear excavation would be feasible, total
$3.1 billion — more than the estimated cost of all-conventional construction on Route 10 or
Route 14.
The problems related to nuclear excavation described in Chapter IV are not the only
obstacles to a Route 17 canal. Panama could be expected to object, for the Route would
involve major dislocations of the economy of Panama. Panama City and Colon depend upon
the present canal and its associated military bases directly and indirectly for some 74 per
cent of their economic activity. Although the United States military bases could be left
where they are if canal operations were transferred to Route 17, a large phasedown of
employment and business activity would accompany the closure of the present canal. The
Stanford Research Institute estimates that employment within 30 miles of the present canal
would decline by 45,000 with the changeover to Route 17 and only 36,000 new jobs would
develop in the new area. The total Panamanian GDP is also estimated to grow somewhat
more slowly with the construction and operation of a Route 17 canal than with one on
Route 10 or Route 14.
Route 17 offers some military advantages because of its remoteness and its partially
nuclear excavated channel (Annex II, Study of Canal Defense). The wide, deep nuclear
reaches, comprising three-fifths of the total land cut, would be relatively invulnerable to
blockage by scuttled ships, making defense a less difficult problem than on other routes.
However, its potential advantages do not now appear to be significant in comparison with
the magnitude of the potential problems in nuclear excavation and in transfer of canal
operations away from the vicinity of the present canal.
Route 23 Conventional or Combined Nuclear and Conventional Sea-Level Canal
The sea-level canal_on Route 23 (Figure 30), proposed by a representative of the
Government of Colombia, would have a length of 146 miles, including more than 27 miles
67
NICARAGUA
AREA OF
COVERAGE
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ae
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SCALE IN MILES
LAKE
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68 SCALE IN MILES
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CARDE EH AN SEA
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SCALE IN MILES
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GULF OF
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FIGURE 30 SEA-LEVEL CANAL ROUTES
17, 23, AND 25
SCALE IN MILES 69
Sia eV? See eS
DEPTHS IN FATHOMS
"AS
ad oS
Line camp at 1000 foot elevation where Route 17 crosses the Continental Divide
FIGURE 31
of seaward approach channels. This alone makes it non-competitive with other routes.
Approximately one-third the length would be in Colombia, generally along the trace of
Route 25, and two-thirds in Panama. The Pacific terminus would be the same as for Route
17 and its Caribbean terminus the same as for Route 25.
Were nuclear excavation feasible, about 20 miles through the Continental Divide would
be excavated by nuclear explosives. The remainder at lower elevations would be
conventionally excavated. Construction costs, based on the limited data available, are
estimated to range from $2.4 billion with partial nuclear excavation to $5.3 billion for
excavation wholly by conventional methods.
The great length of a Route 23 sea-level canal would involve greater operating and
maintenance costs than would other routes. Although there could be political advantages in
having a canal pass through two host countries, the technical disadvantages of Route 23 and
the obvious economic disadvantages for Panama in a remote canal that shared its revenues
with Colombia combine to eliminate this route from further consideration.
Route 25 Conventional and Nuclear Sea-Level Canal
Route 25 (Figure 32) is wholly within Colombia near the Panamanian border. It is
approximately 200 miles east of the existing Panama Canal. Its total length is 101 miles. A
70
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LOWER SALAQUI DIVERSION
UPPER SALAQUI DIVERSION
INTERCEPTOR CANAL
[Teese
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(
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FIGURE 32
SEA-LEVEL CANAL ROUTE 25
SCALE IN MILES 71
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The town of Rio Sucio on the bank of the Atrato River. Excavation of this section of Route 25 through the flood plain of
the Atrato River would be accomplished by hydraulic dredging.
FIGURE 33
sea-level canal on this route would not be competitive in cost with other routes without the
economies promised by nuclear excavation.
Approximately 20 miles of Route 25 through the Continental Divide, the upper
Truando River Valley, and the Saltos Highlands would be excavated by nuclear explosives.
The remainder of the route, starting with elevations below 75 feet in the Truando Valley,
would be excavated conventionally almost entirely by hydraulic dredging. Most of this
portion of the route is through the flood plain of the Atrato River at elevations only a few
feet above sea level. At isolated high spots and at the juncture of the nuclear and
conventionally excavated reaches conventional dry excavation methods would be used.
Hydraulic excavation along nearly 80 miles of Route 25 at low elevations would be
relatively inexpensive, and the incremental costs of wider channels would be small in
comparison with the costs of wider channels on other routes.
Two alternatives, shown schematically in Figure 34, are:
— The single bypass configuration.
— The dual lane configuration.
In order to meet the initial 35,000 annual transit capacity criterion, the length of the
route would require at least one bypass, which ideally should be located in the center of the
single-lane channel and be equal to one-third the length of that channel. The 101-mile length
72
ELEVATION—FEET
rm
4 ~~ ATRATO
FLOOD PLAIN
"RIQ SUCIO
HUMBOLDT Phen
BAY COLOMBIA
PACIFIC ATLANTIC
SIDE CONTINENTAL SIDE
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500
300 TRUANDO VALLEY ATRATO VALLEY
100 NUCLEAR
0 EXCAVATION
CHANNEL BOTTOM—™*
-100
0 20 40 60 80 100
DISTANCE—MILES
PROFILE
20 MILES 25 MILES
28 MILES
(BY-PASS)
(SINGLE
(2—LANE) (SINGLE LANE)
98 MILES
c 2 MILE LAND CUT 3 MILE
APPROACH CHANNEL APPROACH CHANNEL
(2-LANE) BYPASS PLAN
LEAR
EXCAVATION 2—550' X 70’ CHANNEL SECTIONS
78 MILES
20 MILES APPROACH CHANNEL
APPROACH CHANNEL (2 MILES)
(2 MILES) DUAL LANE PLAN
ROUTE 25 CHANNEL CONFIGURATIONS
FIGURE 34
5
of a canal on Route 25 would limit peak tidal currents to 3 knots. The capital cost of this
canal has been estimated, as shown in Annex V, to be $2.1 billion. However, as stated in the
report of the Commission’s Technical Associates:
RK
A valid comparison cannot be made between Routes 10, 14C and 14S, all
of which would be excavated entirely by conventional means, and Routes 17
and 25, both of which require nuclear excavation for the planned
construction. Nuclear excavation is not yet a proven construction technique
and there is no assurance that construction plans and cost estimates based
on present knowledge are valid. Therefore, dollar cost comparisons at this
time have no true significance.
Alto Curiche weather station near southern end of Route 25
FIGURE 35
Colombia’s lack of enthusiasm for a United States-controlled canal on her territory is
discussed in Chapter II, and the current uncertainties in regard to the feasibility of nuclear
canal excavation are described in Chapter IV. However, both the technical and political
prospects of eventually employing nuclear explosives for canal excavation appear more
promising for Route 25 than for any other route.
Defense of a sea-level canal on Route 25 would present complex problems. Its land
length is nearly three times that of routes in Panama, and all defense facilities — buildings,
roads, airfields, etc. — would have to be provided. It is unlikely that United States military
74
forces could be stationed in Colombia. Although the Colombian armed forces would be
capable of providing a measure of security for a Route 25 canal, outside assistance would be
required to provide a level of security acceptable to the United States.
A critical defense problem that would accompany construction on Route 25 is that of
security of the present canal during the 10- to 15-year construction period. If construction
were undertaken as a result of inability to reach agreement in negotiations for a new canal in
Panama, a hostile environment would almost certainly develop. In this event, defense of the
existing canal could be difficult and expensive.
At the present, a canal in Colombia controlled by the United States appears neither
desirable for the United States nor acceptable to Colombia. Should construction of a new
canal elsewhere be long deferred and the practicality of nuclear canal excavation be proved
in the meantime, it is possible that other factors bearing on the acceptability of a sea-level
canal in Colombia would have changed and Route 25 would merit reconsideration.
The Third Locks Plan
There have been many proposals for increasing the capacity of the present canal by
construction of additional locks. The most promising are variations of two basic plans: The
Third Locks Plan and the Terminal Lake Plan. The former was actually initiated in 1939 and
discontinued after expenditure of approximately $75 million on excavations for larger locks
adjacent to the existing ones. The new locks would have been 140 feet wide, 1200 feet long,
and 50 feet deep. Locks of this size would accommodate vessels of up to approximately
110,000 DWT.
The Terminal Lake Plan would consolidate Miraflores and Pedro Miguel Locks on the
Pacific side, raising Miraflores Lake to the level of Gatun Lake. In the process a third lane of
locks would be added on both the Atlantic and Pacific sides. This plan has the advantage of
providing an anchorage area above the Pacific locks which would eliminate navigation
hazards now encountered in that area. A variation of the Terminal Lake Plan, proposed by
S.2228 and H.R. 3792, 91st Congress, provides for three lanes of locks, the largest being
140 feet wide, 1200 feet long, and 45 feet deep. The Pedro Miguel Lock would be
eliminated and the operating level of Gatun Lake would be raised 5 feet to a maximum of
92 feet above sea level.
None of the proposed lock plans would provide for the transiting of 150,000 DWT
ships, the minimum size that would enable the canal to compete with alternate routing for
bulk cargo. Hence, a Deep Draft Lock Canal Plan was developed that incorporates the best
features of the proposed plans with locks (160 feet by 1450 feet by 65 feet) capable of
accommodating 150,000 DWT ships. This plan (Figure 36) provides a reference base for
evaluation of sea-level canal alternatives. Table 15 summarizes its characteristics and costs.
None of the proposed lock plans, including the Deep Draft Lock Canal Plan, would
permit transit of the United States Navy’s largest aircraft carriers which have angled flight
decks too wide for the locks. The estimated construction cost of locks adequate for these
carriers was $800 million more than the cost of locks for 150,000 DWT ships. Therefore, a
lock canal capable of transiting these carriers was given no further consideration.
The addition of a third lane of locks would increase annual transit capacity by
approximately 8,000, making the toal annual capacity 35,000. This capacity could
75
CARIBBEAN
CARIB. BoB es a
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FIGURE 36
DEEP DRAFT LOCK CANAL
76 SCALE IN MILES F
es
DEPTH IN FATHOMS
TABLE 15
ROUTE 15 DATA ESTIMATES
Total construction cost $1,530,000,000
Channel excavation volume 560,000,000 cubic yards
Channel excavation cost $570,000,000
Cost of new locks $550,000,000
Construction time 10 years
Operation and maintenance costs $71,000,000/year
(for 35,000 transits)
These data are based on construction and operation of a deep
draft lock canal with a land cut of 36 miles and 20 miles of
approach channels. Eight miles will have a 500- by 65-foot
channel (75-feet deep at centerline). The remainder will accommodate
two-way traffic. A third lane of locks will be added to the
existing locks. They will be 160- by 1450- by 65-feet and will
accept 150,000 DWT ships.
This improved lock canal would have an effective capacity of
35,000 transits per year. At this capacity, the time lost by
the average ship in slowing down, awaiting its turn to enter
the canal, transiting, and then regaining open ocean speed is
estimated to be about 25 hours.
meet projected demands for commercial transits through this century at a lesser cost than
that of a sea-level canal. This is its only major advantage. However, expansion to meet
further traffic growth would not be practicable.
The United States has held that the provisions of the Treaty of 1903 permit the
building of a third lane of locks. This may not be a practicable alternative because a
controlling determinant of the long-term viability of any course of action in Panama is its
acceptability to the government and people of Panama, the United States, and, hopefully, to
Latin America generally. It seems obvious that major augmentation of the existing canal
would not serve United States interests unless accomplished under a new treaty arrangement
or major revision of the present treaty willingly entered into by Panama.
Augmentation of the existing canal under treaty arrangements comparable with those
proposed in 1967, with an appropriate extension of the period of United States control,
would have favorable effects on the economy of Panama (see Annex I, Foreign Policy
Considerations). The political disadvantage of the third-locks solution is that it would tend
to increase operating personnel and defense requirements that are currently causes of
concern to Panama.
Construction of a third lane of locks would not reduce the vulnerability of the lock
canal to long-term interruption by sabotage or military attack. The critical weaknesses of
the locks and the high level lake would remain unchanged. The basic vulnerability of the
i
lock canal would continue to require large defense forces on site and provisions in United
States strategic plans for the contingency of long-term closure of the canal in wartime. The
lock canal’s current inability to transit the Navy’s aircraft carriers would continue.
Route 14 Conventionally Excavated Sea-Level Canal
The two alinements of Route 14 that were evaluated are identical except through the
Continental Divide (see Figure 37). Both follow the trace of the present Panama Canal
without its many angularities. Route 14 Combined (14C) would involve deepening and
widening of the present Gaillard Cut; Route 14 Separate (14S) would require a new cut
through the Divide about one mile to the southwest of the present cut. Both alinements pass
under the existing bridge at the Pacific end of the present canal and utilize excavation
already accomplished for the unfinished third locks project.
The combined cut offers considerable savings in the volume of excavation because of
the lower elevation through the Divide. However, only the separate cut permits excavation
in the dry to project depth in the Continental Divide area. A major disadvantage of the
combined alinement is its inevitable interference with the operation of the existing canal
during the ten or more years of actual construction. The Gaillard Cut is now only 500 feet
wide and must be operated on a one-way basis for the largest ships that transit the canal.
Cut widening and deepening would further limit capacity during the construction years.
Excavation to 85 feet below sea level in this cut could induce slides that would block the
existing canal for long periods. These and other potential disadvantages of Route 14C
discussed in detail in Annex V led the Commission to conclude that Route 14S would be
the preferable sea-level canal alinement within the existing Canal Zone, regardless of its
slightly greater cost.
Three feasible design configurations for Route 14S have been considered (Figure 38).
Two include a centrally located single-lane section while the other includes two parallel
single-lane sections; all sections are cut to the design channel criteria. Each configuration
includes 1400 by 85 foot two-lane approach channels at both its Atlantic and Pacific ends.
The configurations, in the ascending order of cost and capacity, are:
— A 33 mile single-lane section.
— A 24 mile single-lane section.
— Two parallel 19 mile single-lane sections.
Each of these could be constructed with check gates to limit the tidal currents. The location
of the tidal checks would vary with the configuration and the maximum acceptable current.
The methods of operation with tidal gates in the various configurations of Route 14S,
channel design, and convoy operations would be essentially the same as for Route 10,
discussed later in more detail. The initial transit capacity would be at least 35,000 annually.
The topography of Route 14S does not lend itself to a bypass, which should be located
along the center third of a canal alinement to be effective. Consequently, the logical
expansion steps involve progressive shortening of the one-way section by extending the
Atlantic approach across Gatun Lake, where elevations are much lower than those close to
the Pacific. The maximum currents in the single-lane section would tend to increase as this
section became shorter, but tidal gates could provide appropriate control. Shortening the
restricted section would significantly increase capacity.
78
CARIBBEAN
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SCALE IN MILES 79
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—_————E———————
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FIGURE 37
ELEVATION — FEET
7 z v8 eulcy OF Pamanga ——
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DISTANCE — MILES
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TIDAL CHECKS _____, +
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SINGLE LANE
33 Miles
APPROACH
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8 Miles
(2-Lane)
(2-Lane)
a TIDAL CHECKS
4
APPROACH CHANNEL 24 MILES CHANNEL:
17 MILES RESTRICTED SECTION 13 MILES
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m<— TIDAL CHECK
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22 MILES jG MILES: oe eee 713 MILES
DUAL CHANNEL — C
ROUTE 14S CHANNEL CONFIGURATIONS
FIGURE 38
80
In the final phase of construction of a sea-level canal on Route 14S the water in the
channel would be lowered from the level of Gatun Lake to sea level. This would be
accomplished by removal of the plugs left at either end of Gatun Lake and the simultaneous
construction of an earth dam in the old canal channel near Gamboa to divert the Chagres
River to the Pacific. This drawdown would create a hazard of slides. As much as three
months would be required for the changeover, during which time there could be no traffic
through the canal.
Political factors bearing on the feasibility of a sea-level canal on any route within or
near the Canal Zone and the effects upon the economy of Panama would not be measurably
different (Annex I). Route 14 has the advantage, however, of being wholly within the Canal
Zone. Construction on Route 14 would require no acquisition of privately owned land and
would create the minimum local disturbances.
TABLE 16
ROUTE 14S DATA ESTIMATES
Total construction cost $3,040,000,000
Channel excavation volume 1,950,000,000 cubic yards
Channel excavation cost $2,210,000,000
Construction time 16 years (includes 2 years
for preconstruction design)
Operation and maintenance cost $56,000,000/year (for
35,000 transits)
These data are based on construction and operation of a sea-level
canal with a 33-mile single-lane land cut and 21 miles of two-lane
approach channels. Ships up to 150,000 DWT could be accommo-
dated under all conditions; larger ships up to 250,000 DWT could
be accommodated under controlled conditions. Tidal gates would
be installed and used continuously to limit current to no more than
2 knots.
This configuration would have an effective capacity of 39,000
transits/year. At this capacity, the time lost by a ship in slowing
down, forming into a convoy, passing through the canal, and re-
gaining open ocean speed would be comparable to time lost by a
ship passing through the Panama Canal in 1970. At lower traffic
levels, time lost would be significantly less.
If experience showed that additional capacity would be required,
the two-lane approach channel on the Atlantic end could be extended
inland across Gatun Lake for 9 miles, reducing the single lane reach
to 24 miles. The cost of this additional effort would be $430,000,000
The new configuration would have an effective capacity of 55,000
transits/year.
81
Interference with traffic through the existing canal during construction of a sea-level
canal and the ultimate elimination of the existing canal and the partial elimination of Gatun
Lake would be significant disadvantages from both United States and Panamanian
viewpoints.
Route 14 has the military advantage of being in practically the same location as the
Panama Canal for which all existing defense installations have been sited, but there are two
disadvantages to Route 14 from the defense viewpoint: the vulnerability of the existing
canal during the construction period to interruption by slides or by military attack would be
greater than at present, and there would be many miles of barrier dams to defend along each
side of the sea-level canal across Gatun Lake.
Route 10 Conventionally Excavated Sea-Level Canal
Route 10 (Figure 39) is approximately 10 miles to the west of the existing Panama
Canal. With the exception of two short reaches across arms of Gatun Lake, the route lies
outside the present Canal Zone. The area is undeveloped except for a few small farms and
grazing lands interspersed with jungle. The proximity of the Canal Zone would permit use of
existing Panama Canal facilities in support of canal operations.
An analysis of possible sea-level canal configurations on this route leads to three distinct
alternatives, each of which would be 36 miles in length between two double-lane approach
channels 1400 feet wide and 85 feet deep (Figure 40). Listed in ascending order according
to capacity and cost, they are:
— A single-lane channel for the full length of 36 miles.
— An 11 mile single-lane channel on each end connecting with a 14 mile centrally
located bypass section consisting of two single-lane channels.
— Two parallel 36 mile single-lane channels separated by a berm.
This order is also the sequence in which the canal could be constructed to provide
progressively greater capacity. The ultimate capacity would be reached by extension of the
bypass across the Isthmus, providing two parallel one-way channels.
A combination of conventional excavation techniques would be used. A system of
barrier dams would be employed to isolate the construction area from Gatun Lake and the
present canal and thereby permit excavation in the dry of the bulk of the material.
Table 17 gives the capacity-cost data for the single lane configuration.
Prism design and ship spacing have been based on operating in 4-knot currents, but the
Commission considered it prudent to base initial capacity calculations on tidal currents
being limited to 2 knots and to incorporate into conceptual designs and cost estimates the
facilities required for that purpose. The installation of a tidal control structure at the Pacific
entrance and another 25 miles north thereof in the basic one-way channel would accomplish
this purpose and permit more than 35,000 transits per year.
Past negotiations indicate that a sea-level canal on Route 10 should be acceptable to
Panama under reasonable treaty conditions. The precise treaty provisions can be determined
only by further negotiation, but the objectives of the United States and Panama in any canal
on Panamanian territory do not appear to be irreconcilable.
Construction of a canal on Route 10 would not bring about any shift of canal
operations from near Panama’s metropolitan centers. The avoidance of interference with
traffic during the construction phase and the preservation intact of the existing canal after a
82
e
CARIBBEAN
CART BOB BMAD SHEA DEA
7
AREA OF
| _ COVERAGE
ATLANTIC BREAKWATERS
LOCATION MAP COLOMBIA
SCALE IN MILES
0 50__100
o e
2 LA CHORRERA
PUERTO CAIMITO
\ J
H-SPANAMA CITY
eM
PACIFIC TOWNSITE paciric *
AND HARBOR FACILITIES JETTY \ \
om
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TABOGA ISLA 4)
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ay TABOGUILLA ISLAND
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FIGURE 39
SEA-LEVEL CANAL ROUTE 10
SCALE IN MILES
9 0 5 10
SE
DEPTH IN FATHOMS
83
ot,
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Le PANAMA >
3
ATLANTIC PACIFIC
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o
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-100
CHANNEL BOTTOM——
0 10 20 30 40 50
DISTANCE MILES
PROFILE
fz 4 i <—— TIDAL ChECKS oa
APPROACH APPROACH
CHANNEL | 11_MILES 25 MILES CHANNEL
2 MILES (SINGLE LANE) (SINGLE LANE) 15 MILES
(2 — LANE) (2 — LANE)
INITIAL CHANNEL — A
TIDAL CHECK—>"1
? ~
us
APPROACH 2—-LANE '\ TIDAL CHECK APPROACH
CHANNEL 1-WAY CHANNEL BY-PASS CHANNEL
2 MILES 11 MILES 14 MILES 11 MILES 15 MILES
(2 — LANE) (2 — LANE)
ADDITION OF BYPASS — B
m<— TIDAL CHECK
| —— ew eww eww ew ew ew ww ew ew ew! ewe a= == —.
ae Se ee -
APPROACH TIDAL CHECK —— LU! APPROACH
CHANNEL 2-36 MILE RESTRICTED SECTIONS CHANNEL
2 MILES 15 MILES
(2 — LANE) (2 — LANE)
EXTENSION OF BYPASS — C
ROUTE 10 CHANNEL CONFIGURATIONS
FIGURE 40
84
TABLE 17
ROUTE 10 DATA ESTIMATES
Total construction cost $2,880,000,000
Channel excavation volume 1,870,000,000 cubic yards
Channel excavation cost $2,030,000,000
Construction time 14 years (includes 2 years for
preconstruction design)
Operation and maintenance cost $57,000,000/year (for 35,000
transits)
These data are based on construction and operation of a sea-level
canal with a 36-mile single-lane land cut and 17 miles of two-lane
approach channels. Ships up to 150,000 DWT could be accommo-
dated under all conditions; larger ships up to 250,000 DWT could be
accommodated under controlled conditions. Tidal gates would be
installed and used continuously to limit current to no more than
2 knots.
This configuration would have an effective capacity of 38,000
transits/year. At this capacity, the time lost by a ship in slowing
down, forming into a convoy, passing through the canal, and
regaining open ocean speed would be comparable to time lost by
a ship passing through the Panama Canal in 1970. At lower traffic
levels, time lost would be significantly less.
If experience showed that additional capacity would be required on
this route, a 14-mile bypass would be constructed for about
$460,000,000. It would have an effective capacity of 56,000
transits/year and, at all levels of capacity, would allow less
time in transit than a single-lane canal.
new canal is opened would have distinct advantages for Panama. Construction of a canal on
Route 10 would permit future operation of the existing canal in combination with the
sea-level canal and leave Route 14 available for construction of a second sea-level canal if
one were ever needed.
While the advantages for Panama in either a Route 14 or a Route 10 sea-level canal
should make either acceptable under a mutually satisfactory treaty arrangement, the
comparative advantages and disadvantages on balance favor Route 10. In any arrangement
for operation of a sea-level canal on Route 10, it would be unacceptable for the present
canal to pass to Panamanian control and be operated in competition with the sea-level canal.
The Stanford Research Institute’s study of sea-level canal economic impacts estimated
that the maximum reduction in canal employment for a sea-level canal on Route 10, in
comparison with continuing the present lock canal, would be 6,300 employees. On the
85
other hand, more than 7,000 employees would be needed during the sea-level canal
construction period. The foreign exchange earnings for Panama from sea-level canal
construction, estimated to be more than $1 billion, plus the greater long-term earnings from
the new canal capacity, would permit greater total economic development and employment
in Panama than continuation of the existing canal. The Stanford Research Institute
estimated that the gross domestic product (GDP) and total employment in Panama would
not only grow rapidly during the sea-level canal construction years but also would thereafter
continue to be greater than it would be were the present canal continued under the existing
treaty (Annex I).
One disadvantage of Route 10 is that it lies outside the existing Canal Zone.
Construction on it would require acquisition of some privately owned land, but the needed
land is relatively undeveloped and its acquisition should involve no significant problems or
cost. The question of jurisdiction in the canal area is not material to the choice of sea-level
canal routes in Panama, inasmuch as a new treaty is expected to be negotiated for
construction on any route. Resolution of the issues of Panamanian sovereignty and
jurisdiction of the canal operating authority should affect all routes equally.
Defense of a sea-level canal on Route 10 would require only limited expenditures for
new defense facilities, such as helicopter landing areas, access roads, and facilities at the
canal entrances for small Navy elements. The additional distance to Route 10 is so small
that all major defense requirements would continue to be met by existing military
installations in the Canal Zone. Not only would a sea-level canal on Route 10 be far less
vulnerable than a lock canal, but also it would be somewhat less vulnerable than one on
Route 14 with its more extensive barrier dams needed to preserve Gatun Lake.
The distance of Route 10 from the metropolitan centers of Panama City and Colon is a
slight military advantage, but continued use of existing Zone facilities in support of a canal
on Route 10 would leave many facilities and canal personnel in the same location regardless
of the choice of Route 10 or Route 14.
The major military advantages of Route 10 over Route 14 are that construction on
Route 10 would avoid the long period of vulnerability of the existing canal during
construction of a sea-level canal adjacent to it on Route 14, and the additional capacity and
safety offered by the continued availability of the old canal after a new one is opened on
Route 10.
Route 10 Sea-Level Canal Operated in Combination with the Existing Lock Canal as
One System
The present canal would continue in operation during the construction period of any
sea-level canal. When the sea-level canal is opened, the existing canal would be needed to
provide an emergency alternative until the new canal had been operated for a period of
years, its capabilities proved, and there was reasonable certainty that it would not be
seriously affected by slides. The Commission has been advised by its Technical Associates
for Geology, Slope Stability, and Foundations that 10 years is a minimum period for this
purpose. It would be desirable also to maintain it on a standby basis for an extended period
thereafter.
The existing canal with improvements short of additional locks has, as previously been
indicated, a potential annual transit capacity of 26,800 ships of all sizes below 65,000 DWT.
86
Farmland on southern portion of Route 10
FIGURE 41
In the mix of ships projected for Isthmian canal traffic in the year 2000 and thereafter,
more than 85 per cent of the total continues to be in these smaller sizes. Although the
combined capacities of the old canal and a sea-level canal on Route 10 are not likely to be
needed in this century, it would be unwise for the United States to commit itself to discard
the old canal permanently until the lack of ultimate need for it was certain.
There are no unique engineering problems in maintaining the lock canal on a standby
basis. The cost of operating it on a one-shift basis after a new canal is opened is estimated to
be approximately $4 million a year. This amount would provide for personnel for
maintenance and operation, dual training of sea-level canal operating personnel for lock
canal operations in an emergency, and periodic channel dredging. When no longer needed,
maintaining it on a non-operating standby status is estimated to cost $1 million a year.
Integration of the operation of a new canal on Route 10 with operation of the existing
canal would have great advantages over operation of a canal on Route 10 as a separate
entity.
If a new treaty should authorize such a system, all feasible alternatives for providing
canal capacity greater than now existing would be available. Initial expansion could be
accomplished by adding lock lanes to the existing canal or by building a sea-level canal on
Route 10. Subsequent needs in excess of the minimum capacity of the sea-level canal could
be met in three different ways:
87
_
Reactivating the existing lock canal,
2. Providing a bypass on Route 10, and
3. Constructing a second sea-level channel either along Route 10 or generally along
the trace of the existing canal (Route 14).
Reactivating the lock canal would permit a total of at least 60,000 annual transits;
addition of a bypass to the sea-level channel on Route 10 would permit approximately
56,000 annual transits; Route 10 with a bypass in combination with the existing lock canal
would permit at least 80,000 annual transits; a second sea-level channel would permit well in
excess of 100,000 annual transits.
This flexibility in future canal possibilities, providing as it would maximum transits and
other economic benefits, would be as advantageous to Panama as to the United States. Such
a system should be welcomed also by all canal-using nations as indicative of the intent of the
United States and Panama to ensure adequate canal capacity indefinitely.
The Stanford Research Institute’s evaluations of the economic impacts of various
sea-level canals showed that the combined operation of the old and new canals would be the
most beneficial to Panama of all the plans considered. Appropriate Canal Zone facilities
would continue to be used by the canal system operating authorities to administer and
support canal-system operations and the Canal Zone military bases would continue in
essentially the present status for defense. In addition, however, maintenance of the old canal
in service, or even on a standby status, would create, directly and indirectly, more jobs for
Panamanians than would a sea-level canal on Route 10 alone and would generate greater
foreign exchange earnings for Panama.
Adoption of the system concept would not foreclose relinquishment to Panama of
excess Canal Zone properties such as contemplated in the 1967 draft treaties. Zone water
resources, unneeded facilities, and excess land areas that could be made available to Panama
were a sea-level canal operated alone on Route 10, would be almost equally available were
the channels and locks of the existing canal maintained for reactivation when needed.
The defense advantages of a sea-level canal on Route 10 have been discussed above.
These advantages would be somewhat greater in the canal system as envisioned because the
present canal would be useful if the sea-level canal were blocked. Defense of the standby
canal should cause no major additional problems. The existing military bases are already
suitably sited, and the forces planned for the defense of Route 10 could, with acceptable
risks, provide protection for the standby facilities. In periods of increased tension, defense
forces could be augmented as necessary.
88
CHAPTER VIII
FINANCIAL FEASIBILITY
The financial feasibility of the sea-level Isthmian Canal is dependent on a number of
variables, none of which can with confidence be assigned a value. The Commission had to
consider a range of values for some and make reasonable assumptions for others as described
in this Chapter. Detailed discussions of these matters and financial analyses of sea-level canal
arrangements and the third-locks alternative are contained in Annex III, Study of Canal
Finance. The discussion in this Chapter is directed primarily to the financial feasibility of
construction of a sea-level canal on Route 10 that would be operated in conjunction with
the existing Panama Canal as a single system.
Considerations for Financial Analyses
Revenues
Revenues expected from tolls on a sea-level canal at current toll rates and the maximum
potential under an increased toll schedule are summarized in Table 18:
TABLE 18
FORECASTS OF SEA-LEVEL CANAL REVENUES
Millions of Dollars
Potential Tonnage Low Growth
Forecast Forecast
Current Maximum Current Maximum
Fiscal Year Tolls Tolls Tolls Tolls
Costs of Operations
The Panama Canal Company and Canal Zone Government now conduct many
revenue-producing activities not directly connected with operating and maintaining the
canal. The costs of these operations taken together approximately equal their total revenues.
Government functions, such as police and education, are financed from general revenues.
89
In estimating the operating costs of a sea-level canal, the Commission included only
those activities directly associated with canal operation and maintenance, including
administrative overhead. Commercial and government activities were assumed to be neither
a cost nor a source of revenue in sea-level canal operations.
Payment to Host Country
The unratified 1967 draft of a treaty with Panama for the continued operation of the
present canal would have replaced the 1955 Treaty provision for a fixed $1,930,000 annuity
to Panama with royalty payments for each long ton of cargo transported through the canal.
The draft suggested that the royalty payment start at 17 cents per long ton of cargo and rise
1 cent annually for 5 years to 22 cents per long ton, at which level it would remain. This
1967 plan has recently been rejected by Panama and is in no way binding upon the United
States. The Commission, however, used, for purposes of comparison, the suggested royalty
payments as one possible compensation arrangement in estimating the total cost of
operating a sea-level canal in Panama.
The level of host-country compensation that might be required for a canal in Colombia
cannot be established until the United States is prepared to discuss detailed canal treaty
terms with the government of that country. Meaningful estimates of the operating revenues
of a sea-level canal in Colombia require assumptions as to what use would be made of the
existing canal subsequent to the opening of the new canal. The Commission could find no
basis for such assumptions and hence was unable to make a financial analysis of a sea-level
canal on Route 25, except to recognize that competition by the existing Panama Canal
could make it impossible for the new canal to meet operating costs and debt service charges
from revenues.
Inflation
The inflation of costs over time is an established trend that cannot be disregarded in
financial analyses of prospective sea-level canals. Maintenance of the Panama Canal tolls at
the same dollar level for more than a half a century was made possible only by political
decisions that reduced costs funded from tolls. Similar decisions could be made in financing
a new canal, but they were not assumed in developing the financial analyses in Annex III,
Study of Canal Finance.
A self-amortizing sea-level canal would require provisions in its financial plan to
compensate for the effects of inflation. However, reliable estimates of the effects of
inflation on costs and revenues for a 75-year period into the future are not possible;
attempting to incorporate them would not add to the validity of the financial analyses. The
conclusion was reached in the evaluation of the toll revenue potential of a sea-level canal in
Annex IV, Study of Interoceanic and Intercoastal Shipping, that costs of alternatives to
using the canal will tend to increase in parallel with increases in canal costs, and tolls could
be increased in proportion without discouraging traffic growth materially. Therefore, the
assumption was made that future tolls would be increased periodically in proportion to
inflation of costs. All estimated costs and revenues, therefore, are stated in 1970 dollars.
Construction and Amortization Periods
Estimated construction periods vary only slightly among canal routes, but estimates of
the time required for negotiations with the host country and the passage of appropriate
90
|
| Full Text |
a INTEROCEANIC
CANAL STUDIES 1970
_ Atlantic-Pacific Interoceanic or
sae LY, Commission |
Digitized by the Internet Archive
in 2011 with funding from
University of Florida, George A. Smathers Libraries with support from LYRASIS and the Sloan Foundation
http://www.archive.org/details/interoceaniccana0Ounit
Y2.At. 6: 1/970
ATLANTIC-PACIFIC INTEROCEANIC CANAL STUDY COMMISSION
726 JACKSON PLACE, N.W.
WASHINGTON, D.C. 20506
December 1, 1970
The President
The White House
Washington, D. C.
Dear Mr. President:
We have the honor to submit herewith the final report of the Atlantic-
Pacific Interoceanic Canal Study Commission as required by Public Law
88-609, 88th Congress, as amended.
One provision of the law required us to determine the practicability
of nuclear canal excavation. Unfortunately, neither the technical
feasibility nor the international acceptability of such an application of
nuclear excavation technology has been established at this date. It is not
possible to foresee the future progress of the technology or to determine
when international agreements can be effectuated that would permit its use
in the construction of an interoceanic canal. Hence, although we are
confident that someday nuclear explosions will be used in a wide variety
of massive earth-moving projects, no current decision on United States
canal policy should be made in the expectation that nuclear excavation
technology will be available for canal construction.
The construction of a sea-level canal by conventional means is
physically feasible. The most suitable site for such a canal is on Route 10
in the Republic of Panama. Its construction cost would be approximately
$2.88 billion at 1970 price levels. Amortization of this cost from toll
revenues may or may not be possible, depending on the growth in traffic,
the time when the canal becomes operative, the interest rate on the
indebtedness, and payments to the host country. We believe that the
potential national defense and foreign policy benefits to the United States
justify acceptance of a substantial financial risk.
As a first step, we urge that the United States negotiate with Panama
a treaty that provides for a unified canal system, comprising both the
existing canal and a sea-level canal on Route 10, to be operated and
defended under the effective control of the United States with participation
by Panama.
If suitable treaty arrangements are negotiated and ratified and if the
requisite funds can then be made available, we recommend that construction
of a sea-level canal be initiated on Route 10 no later than 15 years in
advance of the probable date when traffic through the present canal will
reach its transit capacity. Current trends indicate that this will be near
the end of this century; the specific year can be projected with increasing
confidence as it draws nearer.
We recognize, however, that the President of the United States and
the Congress will continue to face many serious funding problems and
must establish the relative priorities of the requirements for defense,
welfare, pollution, civil rights, crime, and other problems in social
undertakings then existing.
We specifically recommend that, when the rights and obligations
of the United States under new treaties with Panama are determined, the
President reevaluate the need and desirability for additional canal
capacity in the light of canal traffic and other developments subsequent
to 1970, and take such further steps in planning the construction of a
sea-level canal on Route 10 as are then deemed appropriate.
Respectfully,
Robert G. Storey Milton S. Eisenhower
iene VAT A
Kenneth E. Fields Raymond A, Hill
Kiba IO COSHES
Robert B. Anderson, Chairman
CONTENTS
Page
Chapter sINGRO DW GIMON) sso ee eee se ele edt, De te SEIS. DO. 1
Chapter II - ISTHMIAN CANAL INTERESTS OF THE UNITED
STPAMESSANDIO THE RINATIONS:, 2285 9 0 7
Chapter III - POTENTIAL CANAL TRAFFIC AND REVENUES ................ 17
Chapter IV — EXCAVATION BY NUCLEAR METHODS ...................... 33
Chapter GENE RAMI CRIME RTA Ws fan oo see ee See oe 47
Chapter VI - ENVIRONMENTAL CONSIDERATIONS ....................... 59
Chapter Vile SANA YSISIORSALLERNATIVESISeeeeeeeeee een ore 63
Chhavoniere WAIL — TSIINPAINICHAUL, T3BVNSIIBIULINIDS 5565055000000 000000000000000c0000 89
Chapter IX — MANAGEMENT OF SEA-LEVEL CANAL CON-
SPRUGHONVANDIORERATION, —... Rae eee eerie. Sai ay es 101
Chapter X — CONCLUSIONS AND RECOMMENDATIONS .................... 105
Enclosure 1 — Commission Authorizing Legislation ......................... 113
Enclosure 2 — Report by the Technical Associates for Geology,
Sloperstabilityaandshoundationsie eee ae interne nee 117
Enclosure 3 — Atomic Energy Commission Views on Develop-
MenwoMmNuclamexcavationmechnolosvanaane ee ereee eee nne en eee ee 27
ANNEXES
ANNEX I — STUDY OF FOREIGN POLICY CONSIDERATIONS
ANNEX II — STUDY OF NATIONAL DEFENSE ASPECTS
ANNEX IIT — STUDY OF CANAL FINANCE
ANNEXIV — STUDY OF INTEROCEANIC AND INTERCOASTAL SHIPPING
ANNEX V — STUDY OF ENGINEERING FEASIBILITY
List of Tables
Table Page
1) ‘Canal Routes Selected for Commissioninvestigation) 25 4-— 4 ene eee 5
2 ‘Panama CanaliWsers: FiscaliViear 1969) enn oe oe ee eee 15
3 Commercial Ocean Transits of an Isthmian Canal
Relative! to\€ommerciali@cean Carsonny cates eine | oer eee 20
4. (Growth. of Panama:Camnall Tiraificysie.5 4. 6 anos sere nO ae eee eee 22
5: Influence'of Japan Trade.tas 24se8 SBA Ano feeds ee ae Ast Ae eee 22
6 Cargo Tonnage Forecasts for an Unrestricted
Isthmian: Canal _ 5.0 5 capa nqtheeee eo oe Bea ae ae al AP eee 28
7 Averace DWT Projectionsy 6.4). c a. dares ue a ee donna so eee eee 25
88 Projected Sea=eveliCanal Mransits) 4.) sea acces okie See eee 26
9 Estimated Sea-Level Canal Revenue Relative to
Total Gatgo Tonnage. 5.5 ose e Poe ee dee ee ee ee eee 29
N@ ITReneeasis Ot Seas lLewell (Camel IRQWEMNUIES, coonecaconaooadaadonedbasoneceauoe 29
1) Forecast Propontionsjof super shipsanithe Worlds Rlect ante eee 47
12 Maximum Numbers of Ships in Convoys with Tidal
Checksiin Use) csssiscsctids sccct A ane, Ra ee eee ect a a2
13. Single-Lane Channel Dimensions for Safe Navigation
of 150.000 DWT Shipsy £42 24.6 Ach tao odene ce ee oe tenes 53
14 Recommended Side Slopes of Excavations for
DififerentsMatenalsgancduileiohiisie.s ewer eerie sien ene eee SW
1S) | Route 5 Data Estimates: 5.254% S215 eA eee ee eee 77
16)" Route 4S Datasbstimates) ..2¢ « sees io oe aos Seniesa PO ee eens 81
lt y Route, 10 Data Estimates’ . « ; «.<.2.
118) Borecasts of Sea-Wevell€analsRevenulicsmeeire enero cinerea ene nee 89
19 Average Toll Revenues Per Long Ton of Cargo Required for
Amortization of CapitaliGostini6 OYiecarsae eye | eee oe einer eee 93
20 Estimated Peak Debt at 6 Per Cent for Construction
NnhWN
of Sea-Level Canal on Route 10 Operated in
Conjunctionswithithe}Ranamva:Garnalleeyer reer eee 98
List of Figures
Canal Routes 3.5.54. .8b dec ote on Ree eee Vi
Interoceanic:CanalURoutesi( 947. Study) pase reine iene eee 3
CulebralCutExcayation® JumeuliOilsy eae ears net cee eee 8
United States|Navy Aircrait (Carrier CONS TEDW ARIO NGS see eee 10
Canal'Zone Townof Balboa ~...: 2) Joe on eo eee 13
Comparison of Previous Panama Canal Traffic Forecasts and
Panama Canal Actual Total Cargo Tonnage Experience ................... 18
List of Figures (Cont’d)
Figure Page
7 Projected Panama Canal Commercial and Bypass
Traffic, Long Tons of Cargo (Economic Research
INSSOCIAUES)) 1 Pee Vee R as cE SM ee EEN Bothy dso ap ERIE HIS RT IEE AE ls 19
8 Cargo Tonnage Forecasts for a Non-Restricted
ESthimnann Cari all eee errr = see peta co AIR eae SL Seay ee er gem ee 24
9 Isthmian Canal Transits Based on Potential
Monnage MOKnecast. eeueened ites Siete ee yen 2 the TAN Tete err yet VEE A ENE 27
NO Rie SE DYAINT Great 1a t eget ers coed xo: CUBE RAI es ted etna oy Suavoeue sioner th clbleday ets ap 34
(PIER WG GNA Crater ess ss ete | cp eeonen recy ce lenis carey minen. (0. atm fe, La cetwa seca 35
12 Helicopter Lifting a Drilling Mast on Route 17 ........................... 36
Se Routewe/aEentenlinesnailyecves ise s otk cn sc ther acaniceeen mask e le Ona eee 38
A BascyEamn pi ROutemli/AMnr base = cscs, SR eres: ers coraus, aud oi aE sehen ci git cnc see 39
iS Drillinssior SubsurtacelGeolopicallDatayannene eee eee 41
lOmeExpenmentaliChannelMRortisheckeiMontanaeemn nee oer: 42
Vigne SevicnwDay alu deVReCORd ene. te cts ae arin) cance sous tene este) hath cee es eRe 49
Seu SSPASSistin ey Shipnnethe banamalCanallsyee a. sae eee eae ooo e se oeaaoee. 50
19 Scale Model Test, Naval Ship Research and
DevelopmentG@enter ypc ys es ro nen eee CRY SE ceo 51
QOMPATtistisisketchron Midali@hecks i aem.an8 cer ce cee on ery ce ees i a ie Fae ID,
2 iil Creek Operation, Simulealaine Canell 550000000ccn0000000500000000056 54
22 Tidal Check Operation, Canal with Center Bypass ....................200-- 55
DS EartihysidenntherGaillardiCuresOctoben ISIS esaeenne eee nee eee 58
DA Meehan ale onc errr es cao he see ea eee crraies Oye Sm eeu dl ac OE 64
25 Gatun Locks at the Caribbean end of the Panama Canal .................... 65
AS Wicloning Wine Panam Camel Camel sooseo0ces550050d0000050050000000EC 65
Dime Miratloresseocksmimnne ree iee War Pine CRW et eta le es MINED. ak ce acs 66
ySmeelihetkanamaiCanaliatsNicht Ae yore. ees series sentra een Ca, 5 Slee cae arcane ec 66
29 WockiCanal)Route 5, Sea-Wevel Canali Routers) 35-4255 500 4ses coca ae ae 68
30 Sendleyell Camel lRowies 17/73, amgl PS 2 caccccscnnccccc00D000DDDDDD0NDOE 69
31 Line Camp where Route 17 Crosses the Continental
DYN VORS i sets a: ere of Gael acta Sena eR BE Ua Sata hy Sear et elon SE rer 70
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Figure Page
42a Tolls Versus Opening Dates, Potential Tonnage
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42b Tolls Versus Opening Dates, Low Tonnage
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44 Average Tolls Required for Amortization of a
Route 10. Canal £4.4.5.456 wah. (Se a eee eee 100
THE ATLANTIC-PACIFIC INTEROCEANIC CANAL STUDY COMMISSION:
Raymond A. Robert G. Robert B. Milton S. Kenneth E.
Hill Storey Anderson Eisenhower Fields
Vice Chm. Chairman
COMMISSION EXECUTIVES
Executive Director John P. Sheffey
Brigadier General Harry G. Woodbury, U.S. Army
(June 24, 1965 to June 18, 1967)
Engineering Agents
— Brigadier General Charles C. Noble, U.S. Army
(June 19, 1967 to January 26, 1969)
— Brigadier General Richard H. Groves, U.S. Army
(January 27, 1969 to the present)
Secretary — Edward W. McGregor
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REPORT OF THE
ATLANTIC-PACIFIC INTEROCEANIC CANAL
STUDY COMMISSION
CHAPTER I
INTRODUCTION
The Atlantic-Pacific Interoceanic Canal Study Commission was required by Public Law
88-609 of the 88th Congress, September 22, 1964, (Enclosure 1) “. . . to make a full and
complete investigation and study, including necessary on-site surveys, and considering
national defense, foreign relations, intercoastal shipping, interoceanic shipping, and such
other matters as they may determine to be important, for the purpose of determining the
feasibility of, and the most suitable site for, the construction of a sea-level canal connecting
the Atlantic and Pacific Oceans; the best means of constructing such a canal, whether by
conventional or nuclear excavation, and the estimated cost thereof.’ The Commission
interpreted its mission also to require, for the purpose of comparison, an evaluation of the
merits of improving and augmenting the existing Panama Canal to accommodate forecast
traffic.
On December 18, 1964, President Lyndon B. Johnson announced the willingness of the
United States to negotiate with the Republic of Panama a new treaty to replace the Treaty
of 1903. At the same time he stated that the United States would request rights to conduct
on-site investigations of potential sea-level canal routes not only in Panama but also in
Colombia, Nicaragua, and Costa Rica. The President said:
ok KK
“For fifty years the Panama Canal has carried ships of all nations in peaceful
trade between the two great oceans — on terms of entire equality and at no profit
to this country. The Canal has also served the cause of peace and freedom in two
world wars. It has brought great economic contributions to Panama. For the rest
of its life the Canal will continue to serve trade, and peace, and the people of
Panama.
But that life is now limited. The Canal is growing old, and so are the Treaties
for its management, which go back to 1903.
KKK
So I think it is time to plan in earnest for a sea-level canal. Such a canal will be
more modern, more economical, and will be far easier to defend. It will be free of
complex, costly, vulnerable locks and séa-ways. It will serve the future as the
Panama Canal we know has served the past and the present.â€
When President Richard M. Nixon took office in January 1969, he retained the
originally appointed Commission and requested it to continue the investigation to its
completion.
The Commission has been guided in its investigation by numerous earlier canal studies.
The most recent of these were:
— The 1947 study conducted by the Governor of the Panama Canal.
— The 1960 study by the House Committee on Merchant Marine and Fisheries.
— The 1960 and 1964 studies by the Panama Canal Company.
These earlier studies evaluated all potential canal routes across Central America and thus
enabled the Commission to concentrate its efforts on the most promising ones.
Canal Treaties
The Commission has had no role in the treaty negotiations with Panama conducted by
its Chairman, Robert B. Anderson, in his separate capacity as Special Representative of the
United States for United States-Panama Relations.
The Commission assumed at the outset of its studies that construction of any sea-level
canal would require new treaty arrangements between the United States and the host
country. Existing treaties with Panama and Nicaragua do not provide authority for
construction of a sea-level canal in either country, and no existing treaties provide the
United States canal rights in Costa Rica or Colombia. In addition, no treaty in force
provides for multinational participation in canal finance or management.
During the first 2 years of the Commission’s investigation, treaty negotiations with
the Republic of Panama were in progress. In June 1967, the negotiators reached agreement
on drafts of three new treaties to replace the Treaty of 1903 — one for the continued
operation of the existing canal, another for United States rights to build and operate a
sea-level canal in Panama, and a third for canal defense. However, neither Government
initiated ratification procedures thereafter, and in 1970 the Government of Panama
announced its rejection of the draft treaties. In both countries new administrations have
replaced those in office when the draft treaties were developed. The drafts have no legal
status; they represent only the United States and Panamanian negotiators’ judgments in
1967 of what might have been acceptable to their respective Governments at that time.
However, the Commission has been mindful of relevant provisions of the draft treaties in its
consideration of possible future treaty arrangements that would bear upon the feasibility of
a sea-level canal in Panama.
Selection of Alternatives for Evaluation
In October 1962, the Secretary of the Army formed a Technical Steering Committee to
review prior studies and to develop a new canal study plan for presentation to the Congress.
The sea-level canal routes recommended in this plan were selected from those found most
promising in the 1947 study conducted by the Governor of the Panama Canal which
identified 30 potential routes and assigned them numbers that have been used in all
subsequent studies (Figure 2). Those recommended for investigation in the plan proposed to
the Congress by the Secretary of the Army, with consideration of the potential of nuclear
excavation, were
— Route 8 in Nicaragua and Costa Rica for a sea-level canal constructed primarily by
nuclear excavation.
— Route 14 in the Canal Zone for conversion of the present lock canal to sea level by
conventional construction methods.
— Route 17 in Panama for a sea-level canal constructed primarily by nuclear
excavation.
— Route 25 in Colombia for a sea-level canal constructed by a combination of nuclear
and conventional excavation methods.
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INTEROCEANIC CANAL ROUTES
(1947 STUDY)
The Congress authorized the new canal study on September 22, 1964. The original
legislation contemplated investigation of these four routes and authorized funds for field
surveys only of Routes 17 and 25. Data available from previous studies were believed to be
adequate for evaluations of Routes 8 and 14.
When the Commission was appointed in April 1965, it requested the Secretary of State,
the Secretary of the Army, and the Chairman of the Atomic Energy Commission to serve as
its Advisory Council. Interdepartmental study groups were then organized to conduct
studies under the Commission’s direction as follows:
— Study of Foreign Policy Considerations.
— Study of National Defense Aspects.
— Study of Canal Finance.
— Study of Interoceanic and Intercoastal Shipping.
— Study of Engineering Feasibility (directed by the Chief of Engineers, United States
Army, in coordination with the Atomic Energy Commission and the Panama Canal
Company).
— Study of Public Information Requirements
(subsequently combined with the Study of Foreign Policy Considerations).
The study groups included representation from all government agencies with significant
interests in an Isthmian canal. They also used private contract agencies for supporting
technical studies.
The Commission employed a panel of eminent private consultants which it
designated as its Technical Associates for Geology, Slope Stability, and Foundations. These
specialists provided technical advice directly to the Commission on engineering matters and
were also made available to the Commission’s Engineering Agent to advise and assist him in
the conduct of the Study of Engineering Feasibility.
At the outset of its studies, the Commission approved investigation of the four routes
recommended to the Congress by the Secretary of the Army. A few months later the
Commission directed its Engineering Agent to update earlier cost estimates for improve-
ments to the existing lock canal and for construction of a new lock canal in Nicaragua; these
estimates were needed to permit comparisons with the alternative sea-level canals in terms of
capacities and construction, operation, and maintenance costs.
As the engineering study of Route 14 progressed it became apparent that an alternate
route nearby, one that did not interfere with the existing canal, might be preferable.
Consequently, in June 1966 Route 10 was added to the routes under consideration. The
Congress subsequently provided additional funds for a limited field investigation of this
route.
As the geological drilling program on Route 17 progressed, it became apparent that there
was little possibility that nuclear means could be used for excavation of approximately
one-third of the route. Hence, the plan for evaluation of this route was revised late in 1967
to provide for excavation of approximately 20 miles of its length by conventional methods.
In 1969 the Government of Colombia informally proposed a joint U.S.-Colombian-
Panamanian investigation of Route 23. The Commission advised Colombian representatives
that the route did not appear to be competitive with routes already under consideration but
agreed to include in its final report an analysis of it based upon available data.
Table 1 lists all the routes given specific consideration in the course of the
Commission’s investigation. A detailed discussion of the selection of these routes is
contained in Annex V, Study of Engineering Feasibility.
Route No.
14-
Combined
14-
Separate
15
17
23
Route Name
San Juan del
Norte-Brito
San Juan del
Norte-Salinas Bay
Chorrera-Lagarto
Panama Canal
Sea-Level
Conversion
Panama Canal
Sea-Level
Conversion
Panama Canal
Sasardi-Morti
Atrato-T uira
Atrato-T ruando
Nicaragua and
Costa Rica
Nicaragua and
Costa Rica
Panama
Canal Zone
Canal Zone
Canal Zone
Panama
Colombia and
Panama
Colombia
TABLE 1
Type of Canal/
Excavation Method
Lock/Conventional
Sea-Level/Conventional
or Nuclear
Sea-Level/Conventional
Sea-Level/Conventional
Sea-Level/Conventional
Lock/Conventional
Sea-Level/Conventional
and Nuclear Combination
Sea-Level/Conventional
or partially Nuclear
Sea-Level/Conventional
and Nuclear Combination
CANAL ROUTES SELECTED FOR COMMISSION INVESTIGATION
Basis of Evaluation
Available data
Available data
Available data augmented by
geological investigations
Available data augmented by
geological investigations
Available data augmented by
geological investigations
Available data
Comprehensive on-site survey
Available data augmented by
data from surveys on Routes
17 and 25.
Comprehensive on-site survey
CHAPTER II
ISTHMIAN CANAL INTERESTS OF THE
UNITED STATES AND OTHER NATIONS
The United States entered the Isthmus of Panama in 1903 to build a canal to serve
world commerce and contribute significantly to the national security of the United States.
In the years since its opening in August 1914, the Panama Canal has played a major role in
the defense of the United States and its value as an international public utility serving ocean
trade has increased dramatically.
Although less than 5 per cent of canal tonnages in recent years has been United States
intercoastal trade and although most merchant ships now using the Panama Canal are not of
United States registry, approximately 70 per cent of all canal cargoes either originate in or
are destined for the United States. More than 40 per cent of the ocean trade of the Pacific
Coast countries of South America passes through the canal. Japan, Canada, Venezuela, and
Chile are major users, and almost every country in the world has some trade on the canal
routes.
The policy of the United States has been to operate the Panama Canal on a non-profit
basis for the benefit of all users. No specific effort has been made to amortize the United
States investment in the canal. With the exception of a few small repayments to the
Treasury, revenues in excess of operating and interest costs have been devoted to capital
improvements.
The initial investment of $387 million was too great to be amortized by reasonable tolls
during the canal’s early years. Tolls were set at 90 cents per measurement ton (100 cubic
feet of cargo space) for laden vessels, 72 cents per measurement ton for vessels in ballast,
and 50 cents per displacement ton for warships and other non-cargo vessels. From
1914 to 1951 the canal was maintained and operated by annual appropriations from the
United States Treasury, while annual receipts were returned to the Treasury. Not until after
World War II did revenues approach operating costs. In 1951 the Panama Canal Company
was organized as a United States Government corporation under legislation which permitted
continuation of the previously established toll levels but authorized increases when needed
to meet operating costs, interest on the unamortized investment, and a proportionate share
of the cost of the Canal Zone Government. In arriving at the interest-bearing debt* of the
Company the Congress set it at a minimum to lessen the interest burden on toll revenues.
All capital costs that reasonably could be attributed to defense or other activities not
required for ship transits were written off. No provision was made for payment of the
*The Panama Canal Company’s interest-bearing debt was established in 1951 at $373 million. (See Public Law 841, 81st
Congress, September 26, 1950, 64 Stat. 1041; Hearings before the Subcommittee on the Panama Canal of the Committee
on Merchant Marine and Fisheries, House of Representatives, on H.R. 8677, 81st Congress, June 26-28, 1950; Hearing
before the Committee on Armed Services, United States Senate, on H.R. 8677, 81st Congress, September 7, 1950.) As of
June 30, 1970 it had been reduced by write-offs and repayments to $317 million. As of this same date the total
unrecovered United States investment in the canal, including unpaid interest accrued since 1903, was estimated by the
Company to be $700 million, excluding defense costs.
Culebra Cut, the deepest excavation of the Panama Canal, June 1913
FIGURE 3
interest obligation which had accumulated prior to the creation of the Company, and the
formula prescribed for calculating the interest rate on the debt was designed to keep current
interest payments low. The legislation creating the Company did not permit it to increase
tolls for the purpose of amortizing its debts.
Since 1951 the Congress has continued to confirm its intent to maintain low tolls.
When the canal annuity to Panama was increased $1.5 million by treaty agreement in 1955
the Congress stipulated that the increase be paid through an appropriation to the
Department of State. This arrangement continues today; only $430,000 of the $1,930,000
annuity is included as a cost of canal operation. Hence, meeting the legally established
payment objectives of the Panama Canal Company has not required an increase in the toll
rates set in 1914.
Interests of the United States
The objectives of the United States in an Isthmian canal are:
— That it always be available to the world’s vessels on an equal basis and at reasonable
tolls,
— That it serve its users efficiently, and
— That the United States have unimpaired rights to defend the canal from any threat
and to keep it open in any circumstances, peace or war.
National Security
The present Panama Canal plays an important role in the United States national
defense; this is analyzed in Annex II, Study of National Defense Aspects. In World War II
(1941-1945), United States Government vessels made 20,276 transits, and 24 million tons
of military supplies passed through the canal. During the Korean War (1951-1954), United
States Government vessels made 3,331 transits, and 12 million tons of supplies went
through. It played an important role in the deployment of naval vessels during the Cuban
crisis in 1962, and currently a large portion of the military vessels and military supplies
bound for Vietnam passes through the canal.
Closure of the Panama Canal in wartime would have the same effect on United States
military capabilities as the loss of a large number of ships. Many additional ships would be
needed to support military operations effectively via alternate \routes, particularly
operations in the Pacific area. The canal’s major military importance is in the logistic
support of combat forces overseas; internal United States transportation systems and port
complexes could be severely burdened in wartime if cargo movements had to be diverted
from canal routes. In an emergency, combat vessels can be deployed between the oceans by
other routes, but the capacities of available shipping, ports, and domestic transportation
cannot be quickly augmented to compensate for canal closure.
Panama has neither sufficient military strength to defend the Panama Canal nor the
capability of developing such strength. The presence of United States forces is essential for
the security of the canal. This limited role of the United States forces in the Canal Zone has
created no great difficulties with Panama. The defense of the canal, however, is an integral
part of the defense of the Americas; Panamanian Governments in the past have expressed
objections to the planning and execution of hemisphere defense activities from Zone bases.
The existing Panama Canal is vulnerable to many forms of attack, even though
extensive protective measures have been taken to strengthen the dams holding its water
supply, to double-gate the canal locks, and to guard its power sources. Drainage of Gatun
Lake is the greatest danger. A guerrilla raid on the locks or dams or the demolition of a
shipload of explosives in the locks could result in the loss of stored water that could take as
long as 2 years to replace. Shorter term interruptions could readily be created by sabotage
of power supplies and lock machinery, by scuttling ships in the locks or channel, or by
harrassment by fire on ships in transit. Considering its vulnerabilities, little comfort can be
drawn from the fact that no interruption of canal operations by hostile forces has occurred,
for no military or guerrilla attack on the canal has yet been attempted. The United States
must have a secure Isthmian canal, and its defense can best be accomplished in conjunction
with defense of the surrounding area at great distances from the canal itself.
Although it could not be put in operation for many years to come, a sea-level canal
across the American Isthmus would increase the security of the United States and other
countries in the Western Hemisphere. It would be much less vulnerable to interruptions and
hence easier to defend. The current weaknesses of locks and power and water supply would
SANA
ay oe
The United States Navy Aircraft Carrier CONSTELLATION passing under the Thatcher Ferry Bridge over the Panama
Canal. This carrier, with a 250-foot wide flight deck, is too wide to pass through the 110-foot wide locks of the present
canal.
FIGURE 4
not exist. Blockages by scuttled ships or bomb-induced slides could be removed relatively
quickly and the possibility is remote that it could be closed for long periods by hostile
action.
Canal Treaties
The principal treaties bearing upon United States canal rights and obligations on the
American Isthmus are:
— The Gadsden Treaty of 1853 with Mexico which guaranteed to the United States
freedom of transit across the Isthmus of Tehuantepec should any means of transit
be constructed there.
— The Hay-Pauncefote Treaty of 1901 with Great Britain which cancelled an earlier
agreement with Britain that the United States would not fortify any canal across
the Isthmus and provided that the United States could alone build, operate, and
protect the Isthmian canal, provided it was neutral and open to the world’s vessels
on an equal basis.
— The Hay-Herran Treaty of 1903 with Colombia (never ratified) which would have
given the United States the right to construct a canal in the Province of Panama.
Failure of the Colombian Government to ratify this treaty led to the creation of
10
the Republic of Panama, and signature of the Hay-Bunau Varilla Treaty of 1903
with Panama.
— The Hay-Bunau Varilla Treaty of 1903 with Panama which gave the United States
in perpetuity the exclusive right to build and operate a canal across Panamanian
territory and all the rights as if sovereign in the Canal Zone.
— The Bryan-Chamorro Treaty of 1914 with Nicaragua (now in process of being
abrogated) which gave the United States the right in perpetuity to construct an
interoceanic canal across Nicaraguan territory.
— The Thompson-Urrutia Treaty of 1914 (ratified in 1922) with Colombia which
gave to Colombia the right of toll-free passage of the Panama Canal for her
government-owned vessels.
— The 1936 and 1955 treaties with Panama which relinquished some United States
rights acquired in 1903 and provided additional benefits for Panama but did not
fundamentally change the 1903 Treaty relationship.
Treaty Negotiations, 1964-1967
The draft three-treaty package developed by United States and Panamanian negotiators
between 1964 and 1967, never signed or ratified, and rejected by the Government of
Panama in 1970, contained these major provisions:
— The first of the proposed treaties, that for the continued operation of the present
canal, would have abrogated the Treaty of 1903 and provided for: (a) recognition
of Panamanian sovereignty and the sharing of jurisdiction in the canal area, (b)
operation of the canal by a joint authority consisting of five United States citizens
and four Panamanian citizens, (c) royalty payments to Panama rising from 17 cents
to 22 cents per long ton of cargo through the canal, and (d) exclusive possession of
the canal by Panama in 1999 if no new canal were constructed or shortly after the
opening date of a sea-level canal, but no later than 2009, if one were built.
— The second, for a sea-level canal, would have granted the United States an option
for 20 years after ratification to start constructing a sea-level canal in Panama, 15
more years for its construction, and United States majority membership in the
controlling authority for 60 years after the opening date or until 2067, whichever
was earlier. It would have required additional agreements on the location, method
of construction, and financial arrangements for a sea-level canal, these matters to be
negotiated when the United States decided to execute its option.
— The third, for the United States military bases in Panama, would have provided for
their continued use by United States forces 5 years beyond the termination date of
the proposed treaty for the continued operation of the existing canal. If the United
States constructed a sea-level canal in Panama, the base rights treaty would have
been extended for the duration of the treaty for the new canal.
Interests of the Canal-Site Countries
Panama
The Treaty of 1903 with Panama for the construction and operation of the Panama
Canal granted to the United States in perpetuity all of the rights as if sovereign in a | O-mile-
11
wide zone across the Isthmus, to the entire exclusion of the exercise of such rights by the
Republic of Panama. The Republic of Panama has sought since 1903 to terminate the
sovereignty and perpetuity clauses of the treaty, to increase her participation in the
employment and financial benefits deriving from the canal, and to reduce both the
substance and the appearance of United States control of Panamanian territory. The treaties
of 1936 and 1955 made limited concessions to Panama, but were short of meeting
Panamanian aspirations.
Panama has indicated in past treaty negotiations that she considers her fundamental
interests in any canal across her territory to be:
— That it be operated and defended with full recognition of the sovereignty of the
Government of Panama.
— That Panama obtain the maximum possible revenues from the canal in direct
payments and through Panamanian employment and sales of goods and services in
the canal enterprise.
— That Panama eventually become sole owner and operator of the canal.
The differing canal objectives of the United States and Panama have continued to
impair tranquil relations. Destructive riots took place along the Canal Zone border in 1959
and in 1964. New treaty negotiations, begun in 1964 and as yet unfinished, have as their
goal the reconciliation of the interests of both countries in a lasting agreement.
There are many constraints upon the United States in meeting Panamanian aspirations,
but the United States has demonstrated, in the treaties of 1936 and 1955 and in negotiating
the 1967 draft treaties, a sincere desire to go as far as it can without jeopardy to its own
canal objectives.
The existing lock canal requires a large staff of skilled operating personnel, and its
defense requires substantial military forces. The Canal Zone provides a United States
standard of living for the 4,000 United States citizen employees of the canal, mostly
executives and skilled craftsmen. The Zone military bases provide similar living standards for
13,500 military and civilian personnel. These canal and military personnel are accompanied
by approximately 20,500 dependents. This results in some 38,000 United States citizens
living in an enclave extending across the middle of the Republic of Panama.
The living conditions provided by the Canal Zone were needed in the past to attract and
retain skilled employees, but modern Panama’s economy could provide housing and
commercial services equivalent to those of the present Canal Zone. Panama’s capability of
providing skilled personnel is steadily increasing, and the Panama Canal Company has for
some years maintained training programs for its Panamanian employees. Consequently,
skilled employee positions are increasingly being filled by Panamanian citizens. An
employee phase down in a change over to a sea-level canal would hasten the elimination of
what is now deemed by Panamanians to be discrimination in favor of United States citizens
in canal employment. These prospects offer means for reducing or eliminating several
politically sensitive elements in the current situation.
The Panama Canal and its associated United States military bases provide a major
portion of the economic lifeblood of Panama. Although Panama’s direct annual compensa-
tion is slightly less than $2 million, more than $100 million each year is paid to
Panamanians for goods and services supplied to the Canal Zone. Panama’s economy is
growing more rapidly than the economies of other Latin American countries. Canal
12
operations and defense are expected to continue to be the basis for about two-thirds of her
foreign exchange earnings and one-third of her total economic activity, at least during the
remainder of this century.
A United States decision to construct a sea-level canal in another country would be an
economic catastrophe for Panama. The potential effects are analyzed in Chapter VII,
Analysis of Alternatives.
Colombia
The economy of Colombia is larger and more broadly based than that of Panama.
Colombia’s population is more than 10 times greater, and her metropolitan centers are far
removed from Route 25. A sea-level canal constructed in Colombia would be, at least
initially, remote from public view and its economic impact would be favorable, although
relatively small.
Formal negotiations for sea-level canal treaty arrangements with Colombia have not
taken place. Informal discussions by members of the Commission with her representatives
and public statements by her officials indicate that a treaty giving the United States
effective control of a canal on Colombian territory might be unobtainable in the foreseeable
future, and that United States military forces for canal defense could not be stationed in
The Canal Zone town of Balboa at the Pacific end of the canal
FIGURE 5
13
Colombia. Colombia’s representatives acknowledged that construction of a new canal
wholly on Colombian territory could be destructive to the economy of Panama; hence, they
indicated that any canal arrangement involving Colombia would have to contribute to
regional cooperation and not be a source of friction with her neighbors. The Government of
Colombia did express willingness to cooperate with the United States and Panama in
investigating the feasibility of multilateral finance, control, and defense of a canal on Route
23 traversing the territories of both Panama and Colombia.
Nicaragua-Costa Rica
United States relations with Nicaragua and Costa Rica have traditionally been friendly.
The Bryan-Chamorro Treaty of 1914 established United States rights to build a canal in
Nicaragua, subject to further agreement upon detailed terms for its construction and
operation. Plans for abrogation of this treaty were initiated early in 1970, but new treaty
terms attractive to the United States probably would be attainable for a sea-level canal on
Route 8, generally along the border between Nicaragua and Costa Rica.
Interests of Canal Users
As previously indicated, the present Panama Canal plays an important role in the
economic life of some dozen nations and is used in lesser degrees by most other nations of
the world. Although the United States is the largest user of the Panama Canal, its economic
importance is greater to several smaller countries, particularly those of the Pacific Coast of
South America. Table 2 compares the exports and imports through the canal for various
countries in relation to their total ocean trade as a measure of its importance to each. The
United States’ 15.8 per cent is exceeded by the proportions of 10 other countries whose
economies are vitally linked with the canal.
A recent informal opinion survey of Panama Canal users by United States embassies
found general satisfaction with operation of the present canal by the United States. The
survey also indicated that the maritime nations of the world assume that the United States
will continue to provide an adequate interoceanic passage.
Country Origin Destination Total Oceanborne Trade
United States 44,010,410 27,618,123 15.8
(U.S. Intercoastal) (3,851,326) (3,85 1,326)
Japan 7,396,528 33,558,400 11.7
Canada 7,280,101 2,335,207 75
Venezuela 8,528,294 704,973 4.7
Chile 3,325,839 4,063,013 39.6
Peru 4,678,162 1,768,126 39.0
United Kingdom 979,589 3,362,642 2.0
Netherlands West
Indies 3,720,671 113,646 4.5
Netherlands 470,062 2,/37,548 ey
Australia 1,668,788 1,367,957 4.1
West Germany 790,825 2,085,378 2.6
Ecuador 969,258 1,215,417 72.4
Philippine Islands 1,534,594 545,703 8.3
New Zealand 1,309,822 702,091 17.6
South Korea 252,799 1,672,353 12.2
Colombia 1,061,716 611,011 22.2
Cuba 1,084,094 479,554 9.8
Panama 1,229 607 331,358 31.5
Canal Zone 17,165 1,436,424 ———
Mexico 677,417 758,039 12.8
Belgium 706,125 794,153 1.9
France 334,326 941,959 0.9
Italy 185,766 1,032,002 0.6
Formosa 307,414 823,642 8.9
El Salvador 207,868 870,014 68.1
Poland 843,564 75,297 2.9
Trinidad/T obago 680,661 108,642 2ES
South Vietnam = ————— 772,063 10.2
Nicaragua 166,801 494,675 55m
Brazil 387,816 240,668 1.3
Puerto Rico 100,397 514,360 --——
TABLE 2
PANAMA CANAL USERS, FISCAL YEAR 1969'
Long Tons of Commercial Cargo
Per Cent of Country’s
(Continued on following page)
' Countries are ranked in accordance with total of origin and destination cargoes in Fiscal
Year 1969. Canal per cent of country’s total oceanborne trade is based upon data
contained in the United Nations Statistical Yearbook, 1970.
IES
TABLE 2 (Cont'd)
PANAMA CANAL USERS, FISCAL YEAR 1969!
Long Tons of Commercial Cargo Per Cent of Country’s
Country Origin Destination Total Oceanborne Trade
Spain/Portugal 108,216 452,971 0.8
Jamacia 427,746 113,646 4.0
China 343,290 192,271 2.5
Costa Rica 276,139 237,150 30.9
Guatemala 74,396 407,349 30.9
Indonesia 66,578 413,416 1.8
Hong Kong 193,990 230,662 So/
East Germany 355,160 48,179 4.2
French Oceania 130,498 246,157 sa
Sweden 164,508 195,267 0.5
British Oceania 319,320 38,007 oe
British East Indies 188,277 122,919 ———
Netherlands Guiana 288,765 aan =
Honduras 210,642 20,602 13.6
USSR 187,477 S2P7 Sil 0.2
Thailand 68,656 151,272 ey,
North Korea 57,493 127 ,350 12.1
Denmark 52.777 128,345 0.6
West Indies
Associated States 134,371 40,023 --—
Norway 103,574 66,836 0.3
Finland 158,050 ——— 0.6
Guyana 140,418 a 2.8
Yugoslavia 11,491 128,840 1.1
Argentina 36,886 56,355 0.5
South Africa ae 92,317 0.4
Irish Republic —--— 75,831 0.7
Haiti and Dominican
Republic 10,004 59 844 1.6
Rumania 62,867 aaa 0.9
Israel os 56,452 0.9
Libya ---- 40,278 ---—
Greece ed 32,423 0.2
Lebanon -—--— 26,380 0.1
Morocco ---- 12,995 0.1
Mozambique —— 10,100 0.1
British Honduras 1,636 ---- 0.8
All Others 2,311,328 3,299,726 0.8
TOTAL 101,391,132 101,391,132
CHAPTER III
POTENTIAL CANAL TRAFFIC AND REVENUES
Canal traffic forecasts are required to determine (a) when the present canal will become
incapable of meeting estimated demand for transits and (b) whether a new sea-level canal
could be financed from toll revenues. Legislation authorizing a sea-level canal, and the
subsequent detailed planning and construction, would require approximately 15 years, and
60 years or more thereafter might be required for amortization. This period of 75 years into
the future is excessive for economic forecasting; hence, the estimates of potential canal
traffic and revenues described herein of necessity incorporate assumptions and judgments.
Previous Canal Traffic Forecasts
Many forecasts have been made of traffic through the Panama Canal. Figure 6 compares
actual Panama Canal experience with forecasts by Hans Kramer in 1927; Norman Padelford
in 1944; Roland Kramer in 1947; Stanford Research Institute in 1958, 1964 and 1967; and
Gardner Ackley in 1961. These forecasts have almost without exception soon been
exceeded by the traffic which subsequently developed. As the forecast periods became
history, unforeseen new commodity movements appeared in ever-increasing proportions of
the total tonnages passing through the canal.
The Economic Research Associates, Inc., Forecast
The Shipping Study Group, in its report to the Commission, did not estimate future
traffic through the existing canal; it limited its considerations to the potential traffic
through an unrestricted canal. However, early in 1970 a traffic forecast through 1985 for
the present canal was independently developed by Economic Research Associates, Inc.
(ERA) under a contract with the Panama Canal Company (Figure 7). It arrived at a
projection of potential canal traffic essentially the same for the 1970-1985 period as in the
Commission’s forecasts, described later in this chapter, produced by a different method-
ology. ERA also forecast the division of potential traffic between the present canal and
alternate routes. As will be shown later in this Chapter, the ERA forecast provides a logical
basis for estimating the saturation date of the present canal if no sea-level canal is built.*
Capacity of the Present Canal
The average amount of commercial cargo per ship transiting the Panama Canal increased
slowly from approximately 4,000 to 5,500 long tons from 1920 to 1960. During the past ten
years, however, there was a rapid increase: 6,470 long tons per transit in 1965; 7,710 long
tons per transit in 1969; and 8,366 long tons per transit in 1970. The average amount of
cargo per ship passing through the Panama Canal in future years will certainly not lessen; it
*Saturation date is the year in which the number of transits through the canal reaches the maximum number that can be
passed through the locks, estimated to be 26,800 per year.
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COMPARISON OF PREVIOUS PANAMA CANAL TRAFFIC FORECASTS AND
PANAMA CANAL ACTUAL TOTAL CARGO TONNAGE EXPERIENCE
FIGURE 6
18
MILLIONS
OF TONS
220
200
ecoooooe CANAL TRAFFIC PROJECTION
eee TOTAL POTENTIAL TRAFFIC PROJECTION
(INCLUDES BYPASS TRAFFIC)
180
160
140
120
100
80
60
40
20
1947 1950 1955 1960 1965 1970 1975 1980 1985
YEAR
PROJECTED PANAMA CANAL COMMERCIAL
AND BYPASS TRAFFIC, LONG TONS OF CARGO
Source: Economic Research Associates
FIGURE 7
19
should continue to increase as more and more intermediate sized tankers and large bulk
carriers are used to carry crude oil and petroleum products and dry bulk commodities
through the Panama Canal. The indications from this \10-year trend are that the average will
be 9,500 long tons per ship by the time traffic reaches 150 million long tons of cargo per
year, and at least 12,000 tons per transit when 250 million tons of commercial cargo per
year are carried through the Panama Canal.
The numbers of commercial transits of an interoceanic canal with respect to the
amount of commercial cargo in the future, as variously estimated, are shown in Table 3.
TABLE 3
COMMERCIAL OCEAN TRANSITS OF AN ISTHMIAN CANAL
RELATIVE TO COMMERCIAL OCEAN CARGO IN YEAR
Annual Shipping Study Report!
Cargo Transited 46 Per Cent 25 Per Cent
(Millions Of Tonnages Of Tonnages ERA Historical
of Long Tons) In Freighters In Freighters Report
‘ Annex IV, Study of Interoceanic and Intercoastal Shipping, transit data are related to
forecasts of total potential tonnage, including all categories of traffic that transit the
Panama Canal. This table relates to commercial ocean traffic only.
The Panama Canal Company has determined that 26,800 transits per year of all
classifications could be accommodated by completion of improvements now underway and
by augmentation of the water supply for lock operation. There generally have been less
than 1,500 noncommercial transits per year, although the total did exceed 2,000 in the
years of United States military actions in Asia. The effective transit capacity of the existing
Panama Canal may thus be taken to be 25,000 commercial cargo ships per year. The
corresponding upper limit of capacity of the Panama Canal, expressed in long tons of
commercial cargo per year, has been estimated by the Shipping Study Group to be:
—Forecast assuming 46 percent of tonnages
moving in freighters and an average
of 8,800 tons per transit: 220 million long tons
20
—Forecast assuming 25 percent of tonnages
moving in freighters and an average
of 12,400 tons per transit: 310 million long tons
If the average size of the ships transiting the Panama Canal continues to increase at the rate
that has prevailed for the past 10 years, the capacity at the saturation level will be at least
300 million long tons per year.
It may be inferred from estimates of probable bypass traffic during the next 15 years
that the demand on the Panama Canal (if it is not superseded) will be approximately 50
million tons less in the year 2000 than the traffic that would pass through an unrestricted
canal. The corresponding demand on the Panama Canal would thus be approximately 300
million long tons in the year 2000 if the potential forecast of the Commission were realized
or 200 million long tons if its low forecast prevails. These estimates are consistent with the
Shipping Study Group analysis of the economics of alternatives of the existing canal (Annex
IV).
It is apparent from this analysis of its capacity and the projections of future demand
that the Panama Canal can accommodate the demand for transits by ships of the size that
can pass the existing locks for at least 20 years and more probably to the end of this
century.
Forecast of World Trade Growth
A 1968 study of world oceanborne trade by Litton Systems, Inc. forecast that the
growth of aggregate ocean cargo tonnages would slow from the current 7.2 per cent annual
rate to around 4 per cent by the end of the century and would continue to grow thereafter
at approximately that rate. For the past 20 years the Panama Canal portion of total cargoes
moving in ocean trade each year has been consistent, varying less than one percentage point
above or below 5.1 per cent of the total. A forecast based upon this relationship, using the
Litton forecast of world trade, would justify high expectations for a sea-level canal.
However, a projection of potential canal traffic growth into the future at the exponential
rates of the Litton Study reaches economically questionable levels toward the end of the
century and unrealistic levels thereafter.
The Commission’s Forecasts
The traffic growth pattern of the Panama Canal (Figure 6) shows a rapid increase in the
years immediately after its opening in Fiscal Year 1915 followed by a levelling off to
insignificant growth during the depression and war years from 1929 to 1945. Since World
War II, however, there has been sustained growth, and there are no indications of a marked
decline in this growth in the near future. The data are given in detail in Table II-1 of Annex
IV and are summarized in Table 4 of this report. Much of the rapid increase in Panama
Canal traffic in recent years stemmed from trade with Japan, as shown in Table 5.
Two long-range forecasts of traffic through a non-restricted Isthmian canal, made by
the Shipping Study Group, are given in Table 6 and shown graphically in Figure 8. The
forecast of potential canal tonnages recommended to the Commission was in essence a
summation of separate estimates of canal traffic originating in 15 different regions, based in
each case on the historical relationship between such traffic and the respective Gross
Regional Product (GRP) and on extrapolation of that GRP through the year 2000. This
Ah
TABLE 4
GROWTH OF PANAMA CANAL TRAFFIC
Total Transits Commercial Ocean Transits
Fiscal Cargo Cargo
Year Number Million Tons Number Million Tons
TABLE 5
INFLUENCE OF JAPAN TRADE
Millions of Long Tons
Total Commercial
Cargo in Year Japan Trade Other Cargo
TABLE 6
CARGO TONNAGE FORECASTS FOR AN
UNRESTRICTED ISTHMIAN CANAL
Millions of Long Tons Per Year Including
Allowances for Non-Commercial Traffic
Fiscal
Year
Potential Tonnage Forecast Low Tonnage Forecast
forecast was accepted by the Commission for planning purposes. The other forecast was
developed by isolating the traffic to and from Japan from other commercial traffic and then
making separate forecasts for Japan trade and for the remainder of all potential traffic. The
Commission accepted this lower forecast for evaluation of the financial risk that could stem
from construction of a sea-level canal.
Ship Sizes and Potential Canal Transits
The Panama Canal satisfied all demands for shipping between the Atlantic and the
Pacific Oceans from the start of operations in August 1914 until recent years when very
large tankers and bulk carriers began to be built. In 1970 there were approximately 1300
such ships afloat and under construction or on order which could not pass through the
existing locks under any circumstances because of beam width and approximately 1750
others that could not pass through fully laden at all times because of draft limitations. All of
the former and most of the latter are now being used, or will be used, on trade routes that
do not involve the Panama Canal, such as shipments of petroleum from the Middle East to
Europe and iron ore from Australia to Japan. On the other hand, if it were not for the
physical limitations of the Panama Canal, some of these bulk carriers would undoubtedly be
used on canal routes. Distinction must therefore be made between the traffic that the
Zs
Millions of long tons of cargo
1920 1960 1980 2000 2020 2040
FISCAL YEAR
CARGO TONNAGE FORECASTS
FOR A NON-RESTRICTED ISTHMIAN CANAL
FIGURE 8
24
Panama Canal will be called upon to handle and the potential traffic that an unrestricted
sea-level canal might attract.
The dimensions of the existing locks of the Panama Canal preclude the passage of ships
larger than 65,000 deadweight tons* (DWT) when fully laden. This size limitation and the
time required for passage of ships through the locks now impose few restraints on free
movement of oceanborne commerce, but both will become progressively more restrictive as
the average size of the ships and the number of transits increase. Few general cargo vessels
are likely to be built that could not pass through the present canal. Approximately 1 per
cent of the bulk carriers now in service are larger than 65,000 DWT, but by the year 2000
about 10 per cent are expected to be. Only 7 per cent of the tankers now afloat cannot
transit the Panama Canal, but it is predicted that within 30 years more than half of the
tankers in the world fleet will be too large to do so. Table 7, developed by the Commission’s
Shipping Study Group, lists the projected average sizes of ships that would use a future
Isthmian canal, considering a range of maximum size ships to be accommodated.
TABLE 7
AVERAGE DWT PROJECTIONS
Maximum
Ship Type Ship Size 1970 1980 1990 2000 2020
Freighter All Limits 10,800 11,500 12,200 13,000' 14,600 16,500
Bulker 65,000 27,800 33,900 39,800 44,400 48 800 52,000
100,000 28,000 35,900 43,000 50,000 61,500 69,000
150,000 28,000 36,000 43,700 51,600 65,800 81,000
200,000 28,000 36,200 44,100 52,000 67,000 84,000
250,000 28,000 36,200 44,100 52,200 67,200 85,000
Tanker 65,000 19,200 27,700 33,000 36,000 37,000 37,000
100,000 20,000 31,800 41,600 49,200 54,300 56,000
150,000 20,100 33,000 44,800 55,000' 66,600 74,600
200,000 20,100 33,300 45,500 56,600 71,000 83,200
250,000 20,100 33,300 46,000 57,500 72,300 87,200
‘Example: In a canal that could accommodate ships up to 150,000 DWT the average freighter in the year 2000
would be 13,000 DWT; dry bulker, 51,600 DWT; and tanker, 55,000 DWT.
Panama Canal ship mixes and likely variations in canal ship mixes in the future are
discussed in detail in Annex IV, Study of Interoceanic and Intercoastal Shipping. In recent
years, freighters have carried 46 per cent of the cargo tonnage, dry bulkers (some also
carried liquid cargo) 37 per cent, and tankers 17 per cent. It is anticipated that the
proportion of freighter tonnage will diminish progressively as more and more large bulk
*Deadweight tonnage of a ship is its fully laden capacity in long tons (2240 pounds), including cargo, fuel, and stores, but
excluding the weight of the ship itself.
DS
carriers come into use. Since any specific forecast of transits for many years in the future
would have little reliability, transit requirements were calculated for a range of cargo mixes:
a maximum of 46 per cent freighter tonnage; a minimum of 25 per cent of freighter
tonnage. The resulting range of transit possibilities is shown in Table 8. Figure 9 graphically
portrays the range of possible transits for the potential tonnage forecast, used by the
Commission for sea-level canal capacity planning. It is probable that future sea-level canal
transits would remain above the middle range during the remainder of this century and fall
into the lower portion in later years.
TABLE 8
PROJECTED SEA-LEVEL CANAL TRANSITS
(150,000 DWT Maximum Ship Size Capacity)
Potential’ Tonnage Forecast Low? Tonnage Forecast
2000 2020 2040 2000 2020 2040
Tankers 2,252 3,350 3,618 1,602 1,693 1,874
Dry Bulkers 5,652 7,983 7,846 2,565 2,574 2,593
Freighters 16,745 26,854 28,751 21,921 24,975 27,403
Totals 24,649 38,187 40,215 26,088 29,242 31,870
' Assumes most tonnage growth will be in bulk cargoes and current Panama Canal ratio
of 46 per cent of cargo tonnages transiting in freighters will decline to 25 per cent by
2000.
? Assumes uniform growth rate of freighter and bulk cargo tonnages with 46 per cent
of tonnages continuing to transit in freighters through the forecast period.
Estimated Sea-Level Canal Revenues at Current Toll Rates
A canal capable of accommodating large bulk carriers will attract more bulk cargoes
than the present canal. Therefore, revenue estimates must take cognizance of the projected
range of future possibilities: the present Panama Canal cargo mix in which 46 per cent of
tonnages move on freighters, 37 per cent on dry bulk carriers, and 17 per cent on tankers;
and a possible future mix of 25 per cent freighter cargoes, 58 per cent dry bulk cargoes, and
17 per cent tanker cargoes. The average revenue per ton of cargo transited on dry bulk
carriers is the lowest since they usually transit fully laden and have relatively few ballast
transits. The revenue from tankers is higher because of their higher ratio of ballast transits.
The revenue per ton for freighters is highest; they have few ballast transits but usually carry
bulky, light cargoes and are often not fully laden.
26
6% Freighter
Vv
f.
L
PEE EEE EEE EERE
EERE RRB
spuesnoy| — s}isuesy
2030 2040
2020
2010
2000
1990
1980
1970
FISCAL YEARS
ISTHMIAN CANAL TRANSITS BASED ON POTENTIAL TONNAGE FORECAST
FIGURE 9
27
Because the Panama Canal tolls are assessed on the basis of measurement tons (100
cubic feet of cargo capacity), revenues per weight ton of cargo vary widely. The average
revenue per weight ton of cargo passing through the canal during the past 20 years has
fluctuated between 80 and 90 cents per long ton of commercial cargo with a trend toward
the higher amount. Continuation of this upward trend of the average toll per cargo ton
carried through the Panama Canal is indicated by the findings in the recent report of the
Economic Research Associates to the Panama Canal Company. This trend would probably
reverse whenever a sea-level canal became available for use by ships that cannot pass the
locks of the present canal, because of the relatively low revenue per cargo ton realized from
such ships. Therefore, the average toll per long ton of commercial cargo that would be
carried through a sea-level canal can be expected to decrease as the volume of traffic
becomes greater and larger and larger ships come into service. A probable relationship
between such traffic and the average toll is shown in Table 9.
The potential revenues from tolls and toll credits at these average rates per cargo ton are
shown in Table 10 for the traffic forecast recommended by the Shipping Study Group and
for the lower forecast described in the report of that group. It is assumed, as has been
generally true in the past, that the average toll per commercial cargo ton is a fair measure of
toll credits of non-commercial transits.
Maximum Sea-Level Canal Toll Revenues
Three independent studies of potential revenue from the present canal have been made
in recent years. These are the Arthur D. Little Company Study in 1966 for the United
Nations Special Fund, the Stanford Research Institute’s Study in 1967 for the Panama
Canal Company, and the Panama Canal Company’s 1970 Study in connection with its
evaluation of the Intergovernmental Maritime Consultative Organization’s proposed Uni-
versal Measurement Tonnage System.
The Arthur D. Little Study evaluated the movements of major commodities through
the canal in comparison with shipping costs between the same sources and destinations via
alternate routes. The study concluded that, for the short run, an upward revision of the
present tolls could double or triple gross revenues. However, extensive readjustments would
take place over the long run with loss of much of the potential traffic.
The Stanford Research Institute’s (SRI) study involved a judgmental determination of
the responses of commodity movements to toll increase by comparing the estimated costs of
alternatives to the canal. It concluded that across-the-board increases up to 25 per cent
would have little effect on traffic, but larger increases would discourage traffic growth. A
100 per cent increase would cause traffic growth to cease entirely and perhaps even cause
traffic to decline. However, the study concluded that the maximum revenues could be
obtained over the long run by selective toll increases on a commodity basis, ranging from 25
per cent to 150 per cent.
The findings of the Panama Canal Company’s 1970 Study were generally consistent
with those of the SRI Study. The 1970 Study concluded that maximum toll revenues could
be obtained through selective increases averaging approximately 50 per cent. It was
estimated that this would produce revenues about 40 per cent greater than would be
produced by continuation of the present system.
28
TABLE 9
ESTIMATED SEA-LEVEL CANAL REVENUE RELATIVE
TO TOTAL. CARGO TONNAGE
$0.90 per Laden Panama Canal Ton
$0.72 per Ballast Panama Canal Ton
Cargo
Millions of Long Toll Revenue
Tons in Year Average Toll Millions of Dollars
$0.848
0:812
0.777
0.777
0.777
0.777
0.777
TABLE 10
FORECASTS OF SEA-LEVEL CANAL REVENUES
$0.90 Per Laden Panama Canal Ton
$0.72 per Ballast Panama Canal Ton
Potential Tonnage Forecast Low Growth Forecast
Fiscal Year $ Millions $ Millions
It is apparent from these studies that it would be necessary to do away with the present
Panama Canal toll structure to realize the maximum potential revenues in an Isthmian canal.
This toll structure, however, which does not discriminate among types of cargo, is
established by law and has the advantages of simplicity of administration, conformity with
systems used in many other canals and ship facilities, and established acceptability to canal
users. Furthermore, this schedule is currently producing revenues adequate to meet
29
legislatively established obligations of the Panama Canal Company.
The Commission recognizes that United States law requires public hearings before canal
tolls can be increased and that the views of the Congress, canal users, and others would have
to be considered in setting tolls in a sea-level canal. However, in view of the large capital
investment required for a sea-level canal (or for additional locks for the present canal) and
possible future increases in host-country compensation, the Congress may determine that
higher revenue objectives are warranted. The Commission’s study of the potential for toll
increases and higher revenues was directed to the practical options available. These are set
forth in detail in Annex IV, Study of Interoceanic and Intercoastal Shipping. In general, it
was found that:
1
The A.D. Little Company, the Stanford Research Institute, and the Panama Canal
Company studies of the lock canal are applicable to an analysis of the revenue
potential of a sea-level canal.
The alternatives to the use of any Isthmian canal place an upper limit on the
charges it can impose for its services. These alternatives include:
a. Alternative ship routing to avoid the canal, and alternative ship sizes in
conjunction;
b. Transithmian pipelines for petroleum and dry bulk materials transported in
liquid slurry form;
c. The land bridge concept in which rail movement in the United States and
Canada substitutes for canal routing;
d. Air transport; and
e. Substitute sources and markets.
The potential bulk commodity traffic of the sea-level canal is very large, but the
alternatives to the canal limit the ability to increase tolls on these commodities
above present Panama Canal tolls.
The tolls on other categories of cargo could be increased on a selective basis in
varying amounts up to 300 per cent without exceeding the cost of available
alternatives.
The toll system that would produce the greatest revenue without discouraging
traffic growth is one with rates based upon the value to each user. The direct cost
of rendering the services would determine the minimum level for a tolls charge, and
the cost of the most attractive alternative would determine the maximum charge. If
permitted to use such a pricing structure, a sea-level canal could attract almost all
potential traffic from alternative routes and transportation modes.
The findings of the Shipping Study Group as to the maximum potential revenues of a
sea-level canal may be summarized as follows:
The potential traffic level of a sea-level canal is not likely to be achieved with a new
canal limited to ships of 100,000 DWT or less. It is most likely to be achieved by a
canal with a capacity to transit ships of 200,000 DWT or larger.
Toll rates in a canal of adequate dimensions could be increased an average of 50 per
cent in terms of current dollars by the use of a new system of tolls. This would
cause some loss of potential traffic, but would produce approximately 40 per cent
additonal revenue.
30
In addition to the potential for increase in current dollars, average tolls could be
increased at a rate approximating the average inflation of the costs of canal
alternatives with little impact on the volume of traffic.
If tolls are restructured to produce maximum revenues, provisions must be made for
the variations in tolls sensitivities among commodities, ship sizes, and routes.
A pricing system for structuring tolls designed to meet the costs of competing
alternatives offers the greatest revenue potential for a sea-level canal.
31
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CHAPTER IV
EXCAVATION BY NUCLEAR METHODS
The initial PLOWSHARE cratering experiments and engineering studies conducted from
1958 through 1962, as well as a number of applicable nuclear weapons effects tests,
encouraged the hopes of the scientists and engineers involved that a practical nuclear
excavation technology would soon be forthcoming. An attractive potential application then
considered was the construction of a sea-level Isthmian canal; in 1963-1964 conceptual
studies and research in the new technology were extended to include this objective. Two
Isthmian canal routes, Route 17 in Panama and Route 25 in Columbia, having sparse
populations, remoteness from population centers, and apparently favorable topography,
appeared to meet the requirements of the embryonic technology.
Preliminary engineering estimates, made without on-site investigations, put nuclear
canal construction cost for Route 17 as low as $747 million — about one-third the
then estimated cost of conventional construction on Route 14. Route 25 was estimated to
cost more because only a portion was thought suitable for nuclear excavation. However, it
was recognized that the potential economies were contingent upon proof of the feasibility
of nuclear excavation by further research and experimentation and also upon favorable
results of comprehensive physical surveys of the engineering and nuclear safety features of
the selected routes.
There was optimism in 1964 that on-site studies of the routes and the planned program
of additional nuclear cratering experiments would establish the feasibility and desirability of
nuclear excavation, although the magnitude of the technical and political obstacles to
nuclear excavation was recognized by President Johnson’s advisers. Further, the United
States was being pressed by Panama to revise the 1903 Treaty. The urgency of determining
the feasibility of a sea-level canal was then deemed to warrant proceeding with on-site route
investigations while carrying out the additional nuclear cratering experiments needed to
develop a practical nuclear excavation technology.
The authorizing legislation requested by the President and approved by the Congress
contemplated extensive data collection on the two most promising nuclear routes, 17 and
25. Only limited field investigations of the routes for conventional excavation were provided
for as the available data were thought to be sufficient for feasibility studies. No field work
was planned for Route 8 inasmuch as evaluations based upon available data showed it to be
less suitable than other routes under consideration. The original authorization for the
planned studies was $17.5 million. This amount was later augmented to $24 million, in part
to expand the investigation of routes suitable for conventional excavation. The actual
expenditure was $22.1 million, of which approximately $17.5 million was devoted to the
nuclear routes, $3.0 million to the conventional routes, and $1.6 million to all other
activities.
33
SEDAN, July 6, 1962, 100 Kiloton — The Thermonuclear explosion occurred 635 feet below surface and excavated a
crater about 1200 feet in diameter and about 320 feet deep with a volume of about 6.5 million cubic yards.
FIGURE 10
Nuclear Excavation Technology
In 1964 knowledge of nuclear cratering physics was limited to single craters in alluvium
and rock. Row crater experiments had been conducted with chemical explosives only.
However, extensive knowledge of the radioactivity, fallout, seismic, and air blast phenomena
associated with nuclear excavation operations was available from a wide variety of nuclear
tests.
It had been estimated in prior Isthmian canal studies that the deep cuts through the
Continental Divide sections of the routes would require salvo yields in the tens of megatons
(Mt).* Such levels were considered troublesome, particularly from the ground motions that
might be induced. It was recognized in these studies that radioactivity from fallout could
require extensive evacuation precautions and present problems under the restrictions of the
Limited Test Ban Treaty. There was confidence, however, that the radioactivity effects
could be held to insignificant levels.
*Nuclear explosive equivalent of one million tons of the chemical explosive, trinitrotoluene (TNT).
34
The BUGGY I crater approximately 860 feet long, 250 feet wide, and 65 feet deep produced by the simultaneous
detonation of five nuclear explosives of approximately 1 kiloton each on March 12, 1968. The explosives were buried 135
feet deep and spaced 150 feet apart in hard rock on the U.S. Atomic Energy Commission’s Nevada Test Site. The arrow
points to a pick-up truck.
FIGURE 11
When the sea-level canal investigation was initiated in 1965, it was expected that
development of the nuclear excavation technology would be advanced sufficiently during
the course of the investigation to permit determination of its feasibility for canal
construction. The AEC’s PLOWSHARE program in nuclear excavation was expanded in
order that development of the technology would be phased with the Canal Study
Commission’s timetable. A program of some six to eight nuclear tests was considered the
minimum necessary to develop the technology.
Complementary theoretical and laboratory tests and studies were also programmed and
carried out. These related to all aspects of nuclear excavation, including the development of
clean devices and the probable behavior in cratering of the different materials not so far
tested — rock, saturated rock, and clay shales as found on the Isthmian routes.
Political and budgetary constraints caused the planned PLOWSHARE nuclear excava-
tion program to move slowly. Although the Canal Study Commission’s reporting date was
extended from June 30, 1968 to December 1, 1970, only three tests were carried out during
the Commission’s investigation. The data from them materially assisted the complementary
35
—
United States Air Force CH-3 Helicopter Lifting a Drilling Mast on Route 17
FIGURE 12
studies and provided corroborative data at yields approaching usefulness for practical
excavation projects. The higher yield nuclear cratering experiments of the magnitude
required for the Isthmian canal excavation, however, remain to be carried out.
Engineering and Nuclear Operations Surveys
The engineering and nuclear operations surveys of Routes 17 and 25 were carried out
essentially as planned except for unavoidable delays. A field office in the Canal Zone and
base camps on each route were established. The latter were augmented by small satellite
36
camps along the alinements. The personnel involved numbered more than 800 at the height
of field activities.
Four weather stations were built and operated in Panama and Colombia to acquire the
weather data needed for prediction of the effects of nuclear operations and for other
purposes. Very high altitude air studies were conducted, using balloon and rocket-borne
instruments. Surveys of existing buildings and other structures within projected areas of
significant ground motion were made to estimate structural response and damage.
Bioenvironmental studies in the various radioecological systems were carried out by
scientists of different fields (marine, terrestrial, agriculture, forest, freshwater, etc.).
The engineering data program included topographic surveys to establish the preferable
alinements and their elevations. The surface geology along each route was mapped and
subsurface borings were carried out to confirm or correct geological interpretations. Rainfall
and stream flow were measured. People were counted.
As usual,in such preliminary surveys there are areas where more data and longer
collection periods would have been desirable. The data obtained, however, provide a basis
for a number of findings not previously possible.
Detailed analyses of the nuclear excavation technology and its potential application to
specific canal routes are contained in Annex V, Study of Engineering Feasibility, and its
appendices. Several of the technical evaluations developed from the surveys of Routes 17
and 25 are summarized below. Discussions of the unique political, military, and economic
aspects of these routes are contained in Chapter VII, Analysis of Alternatives.
Route 17
1. Geological drilling on Route 17 found competent rock along approximately
three-fifths of the 50-mile route. Hard materials predominate throughout the 20-mile
Continental Divide reach on the north and for 10 miles through the Pacific Hills on
the south. The center 20 miles through the Valley of the Chucunaque River,
however, consist largely of clay shales. This material, if excavated to steep slopes,
softens and slides as it weathers. Slopes as flat as one unit of vertical rise for each 12
units of horizontal measurement probably are needed for long-term stability in the
deepest excavation. Such slopes cannot be produced by single-row explosive
excavation, and the chemical explosive experiments conducted thus far indicate that
it is unlikely that multiple-row techniques can be developed to produce flatter slopes.
For this reason, cost estimates had to be based on the assumption that the center
portion of Route 17 would require conventional excavation.
2. The portions of Route 17 which appear to be suitable for nuclear excavation are
currently estimated by the United States Army Engineer Nuclear Cratering Group to
require about 250 separate explosives with a total yield of 120 megatons. They
would be fired in some 30 salvos of varying total yields over a period of 3 years or
longer. The largest salvo would have a total yield of 11 megatons. These estimates are
approximations only, based upon the limited route data available and calculated
nuclear explosive effects determined by extrapolation of low-yield experimental data
available in 1969. The AEC is confident that these estimates could be reduced, both
in number of explosives and in total yield required.
37
.
e
'
Seed TE aes
Route 17 centerline trail through the Chucunaque Valley
FIGURES
38
Site survey base camp at Santa Fe Ranch, Route 17
FIGURE 14
3. Fallout predictions based upon meteorological conditions in the vicinity of Route 17
indicate that a land area of approximately 6,500 square miles containing an
estimated 43,000 persons would have to be evacuated during the period of nuclear
operations and for several months thereafter. This includes most of the area that
might be affected by ground shock or air blast, but precautions against glass breakage
and other damage in built-up areas would be required over a large area extending out
approximately 300 miles from the route. The AEC is confident, however, that a
significant reduction in the size of the area affected is possible.
4. Tidal currents in a partially nuclear excavated sea-level canal on Route 17 without
tidal checks would reach 6.5 knots in the conventional section.
Route 25
1. Geological drilling found competent rock through the Continental Divide reach at
the Pacific end of Route 25. This constitutes approximately 20 miles of the
alinement investigated. The greater portion of this 100-mile route passes through
39
alluvial material in the flood plain of the Atrato River. This reach is not suitable for
nuclear excavation, but is well suited for economical hydraulic dredging.
2. The portion of Route 25 that appears suitable for nuclear excavation is currently
estimated by the Corps of Engineers to require 150 individual explosives with a total
yield of 120 megatons. They would be detonated in some 21 row salvos over a period
of approximately 3 years. The largest salvo would total 13 megatons. The AEC
believes these estimates, like those for Route 17, could be reduced.
3. A land area of approximately 3,100 square miles containing an estimated 10,000
inhabitants would have to be evacuated to permit nuclear operations on Route 25.
As for Route 17, additional precautions would be required within a 300-mile radius
during actual detonations.
4. Tidal currents in a Route 25 sea-level canal without tidal gates would reach a
maximum of 3 knots.
Technical Feasibility of Nuclear Excavation of Routes 17 and 25
The Commission’s Technical Associates for Geology, Slope Stability, and Foundations
were asked to assist in the evaluation of the technical feasibility of nuclear excavation of
Routes 17 and 25. Their report is Enclosure 2 to this report. The following extract
summarizes their findings as to the feasibility of nuclear canal excavation:
SB reasbiliey of excavation by nuclear explosions is discussed in terms of: (1) the
present situation, i.e., the possibility of its being used with assurance for
interoceanic canal construction within the next ten years; (2) the requirements
for a continuing program of nuclear testing to assure future feasibility; and (3) the
possibilities of future applicability to weak rocks such as the clay shales of the
Chucunaque Valley. These discussions apply exclusively to the physical develop-
ment and configuration of craters which would result in a usable canal and
exclude all other effects of nuclear explosions such as seismic, air blast, and
radiological hazards.
(1) Present Feasibility
The Technical Associates are in unanimous agreement that the techniques for
nuclear excavation of an interoceanic canal cannot be developed for any
construction that would be planned to begin within the next ten years.
The reasons for this opinion are:
a. Extension of the scaling relations now established by tests to the much higher
yield explosions is too indefinite for assured design and the “enhancementâ€
effects due to saturated rocks and row charge effects now assumed have not been
proved by large scale tests. There is a definite possibility of a major change in the
mechanics and shape of the crater formed by the much higher yield explosions
required for the canal excavations as compared to extrapolations from the
relatively small-scale tests carried out to date.
b. The effects of the strength of rock on the stability of “fall-back†slopes and
the broken rock crater slopes projecting above the fall-back to the great heights
required for an interoceanic canal have not yet been established.
40
Drilling for subsurface geological data
FIGURE 15
Therefore, the Technical Associates conclude that nuclear excavation cannot
safely be considered as a technique for assured construction of an interoceanic
canal in the near future.
(2) Future Development
The economic advantages of nuclear explosions for excavation of the very deep
cuts required by an interoceanic canal are so great that the present ““Plowshareâ€â€™
program should be continued, extended, and pursued vigorously until definitive
answers are obtained. Assured application of this technology to design and
construction of an interoceanic canal will require an orderly progression of tests
up to full prototype size, including full-scale row charge tests, in generally
comparable rock types, terrain and environment. Such a program may well
require another ten to twenty years to establish whether or not nuclear
excavation technology can be used with positive assurance of success for
construction of a canal along Routes 17 or 25.
41
(3) Application to Excavation in Clay Shales
A growing body of knowledge and experience indicates that high slopes in clay
shales, as in the Chucunaque Valley, or in more competent rocks underlaid by
clay shales, as in parts of the existing canal, may have to be very flat for long-term
stability and to avoid the danger of massive slides in the first few years after
excavation. Some attempts have been made to produce such flat slopes by
elaborate explosive techniques, such as over-excavation in anticipation of slides,
multiple row charges, and successive series of explosions or “‘nibbling†techniques
for application to problems such as construction of a sea-level canal across the
Chucunaque Valley. The Technical Associates believe this to be a highly
unpromising line of investigation with minimal chances of developing procedures
that could be used with assurance in the foreseeable future.
Experimental channel excavated by chemical explosive row charges at Fort Peck, Montana
FIGURE 16
In a letter (Enclosure 3) to the Canal Study Commission near the end of the sea-level
canal studies, the Chairman of the Atomic Energy Commission reported that any decision to
construct a sea-level canal in the near future must be made without reliance upon the
availability of nuclear excavation. He expressed the AEC’s view that, given funds and
authorization, the technical problems of nuclear excavation could be solved within a
relatively short time; that each step which has been taken in developing nuclear excavation
technology has resulted in lowering the potential risk involved; that increased understanding
of the catering mechanism has increased belief in the potential benefit of this undertaking
42
for mankind; and that, if for any reason a decision to construct an interoceanic canal is
delayed beyond the next several years, nuclear excavation technology might be available for
canal construction.
It is clear that the technical feasibility of using nuclear explosives for Isthmian canal
construction has not been established and that any conclusion as to its technical feasibility
in the future for this purpose would be a speculative judgment of the potential of nuclear
excavation for the most sophisticated task that could be asked of it. It is equally clear that
the United States could not propose such excavation until the reliability of the technology
for such an application has been proved unconditionally.
Although mindful of, and in essential agreement with, the AEC’s prognosis of eventual
availability of a nuclear excavation technology, the Canal Commission believes that many
experiments will be required in combination with practical applications in smaller projects
before the necessary degree of confidence can be assured. Although there is a considerable
body of scientific and engineering opinion that the technology has already been sufficiently
developed for application to projects of moderate size, such as harbors and highway cuts, it
is the view of this Commission that its perfection for use in canal excavation on Routes 17
or 25 is many years away.
Acceptability of Nuclear Canal Excavation
The political constraints upon the use of nuclear explosives for canal excavation were
recognized at the time the Commission’s investigation was authorized by the Congress. It
was reasoned in the authorization hearings, however, that establishment of the technical
feasibility of nuclear canal excavation through experiments and practical applications of this
technology within the United States would ease removal of treaty constraints and other
political obstacles to its use for canal excavation. This reasoning was valid in 1964 and
remains so today, but neither technical nor political developments have proceeded at the
expected pace. Consequently, the international and local obstacles to nuclear canal
excavation are essentially unchanged from 1964. Although there have been encouraging
developments in international treaties bearing upon nuclear excavation, the Limited Test
Ban Treaty constraints remain in effect, and the Commission’s studies indicate that
prospective host-country opposition to nuclear canal excavation is probably as great if not
greater than estimated in 1964.
The Limited Test Ban Treaty enjoins its signatories from conducting any nuclear
explosion which causes radioactive debris to be present outside the territorial limits of the
state under whose jurisdiction or control such explosion is conducted. The United States
recognizes, because there seems to be no possibility of excavating an Isthmian canal with
nuclear explosives without transport of some radioactive material across territorial
boundaries, that this provision could prohibit nuclear excavation of a sea-level canal. It was
also recognized by the United States and other signatories, including all canal-site countries,
that nuclear excavation for peaceful purposes could later become practicable and mutually
acceptable. Consequently, the Treaty was drafted to provide simple amendment procedures,
requiring only the concurrence of the United States, Great Britain, Russia, and a simple
majority of the parties to the Treaty.
Two other treaties bearing upon control of nuclear explosions have come into force
subsequent to the ratification of the Limited Test Ban Treaty. Both contain specific
provisions designed to facilitate the use of nuclear explosions for peaceful purposes,
including excavation, when the technology is developed and when mutually acceptable
procedures are established. In the Treaty of Tlatelaco (the Latin American Nuclear Free
Zone Treaty) fifteen Central and South American countries, including all Isthmian canal-site
43
countries, agreed to exclude nuclear weapons from their territories but specified conditions
for mutual cooperation in the employment of nuclear explosives for peaceful purposes.
The international agreement most encouraging for the future development of nuclear
excavation technology is the Nuclear Non-Proliferation Treaty now ratified by the three
principals and a majority of the signatories of the Limited Test Ban Treaty. Article V of this
Treaty provides that:
Each Party to the Treaty undertakes to take appropriate measures to ensure
that, in accordance with this Treaty, under appropriate international observation
and through appropriate international procedures, potential benefits from any
peaceful applications of nuclear explosions will be made available to non-nuclear-
weapon States Party to the Treaty on a nondiscriminatory basis and that the
charge to such Parties for the explosive devices used will be as low as possible and
exclude any charge for research and development. Non-nuclear-weapon States
Party to the Treaty shall be able to obtain such benefits, pursuant to a special
international agreement or agreements, through an appropriate international body
with adequate representation of non-nuclear-weapon States. Negotiations on this
subject shall commence as soon as possible after the Treaty enters into force.
Non-nuclear-weapon States Party to the Treaty so desiring may also obtain such
benefits pursuant to bilateral agreements.
The obligation assumed by the nuclear powers under Article V creates an environment
conducive to gaining international agreement upon modification or interpretation of the
Limited Test Ban Treaty to permit nuclear excavation projects. Discussions at the technical
level between United States and Russian representatives in 1969 and 1970 indicated that
Russia has great interest in the nuclear excavation technology and may be considerably
ahead of the United States in its development. These conferences produced joint statements
in favor of continued discussion of the technical aspects of peaceful nuclear excavation
technology; specific arrangements for dealing with the constraints of the Limited Test Ban
Treaty remain to be initiated.
Opposition to release of additional radioactive material in the world environment
probably would not be stilled by negotiation of a Limited Test Ban Treaty modification
authorizing peaceful nuclear explosive excavations. Many people throughout the world,
including some scientists, may remain convinced that the levels of radioactivity expected to
be released to the environment would not be acceptable.
The Commission’s Study of Foreign Policy Considerations (Annex I) concluded that
within the canal-site countires, fear of the effects of nuclear explosions and fear of economic
dislocations could create major obstacles to nuclear canal excavation. The problems differ in
magnitude among countries, but none appears easily overcome.
It was found that more than a half-million people would have to be evacuated from
areas of Nicaragua and Costa Rica to permit nuclear excavation of Route 8. The
Commission then concluded that nuclear excavation of this route should be given no further
consideration.
The evacuation requirements for Route 17 are formidable at this time and will grow
more so with the passage of time as the Darien area develops economically. The evacuation
area includes the homelands of Choco and Cuna Indian tribes with primitive cultural
attachments to their lands that could not be broken easily. A larger area extending to
Panama City on the west and Colombia on the east would be subject to possible ground
motion and airblast damage. The potential damages to masonry structures and window
44
panes outside the evacuation area would not be costly to repair, but the inconvenience to
thousands of inhabitants could be considerable. An additional major obstacle for Route 17
construction is the prospect of economic losses and dislocations in moving canal operations
away from Panama’s metropolitan centers (See Chapter VII). These economic disturbances,
the imagined dangers of nuclear excavation, and the objections to evacuation of inhabitants
from the Route 17 area could cause widespread Panamanian opposition to a Route 17 canal.
The employment of nuclear explosives in the Continental Divide area of Route 25 in
Colombia would involve lesser problems of acceptability than would nuclear excavation in
Panama. The land area of evacuation would be only one-half as large. Although many of the
inhabitants of this area are Choco Indians whose removal would present problems similar to
those expected in Panama, the total evacuation requirement would involve only one-quarter
as many people. The required precautions against airblast and seismic shock would affect an
area of nearly the same magnitude as for Route 17.
The problems of public acceptance of nuclear canal excavation probably could be
solved through diplomacy, public education, and compensating payments. However, the
political and financial costs to the United States in obtaining such acceptance could offset
any potential saving in construction costs and gains in intangible benefits. Obviously, a wide,
deep channel constructed at low cost by nuclear excavation would have specific advantages
in military security and ship-size capacity in comparison with a conventionally excavated
canal. However, compensation costs unique to the dislocations and damages associated with
nuclear excavation, costs that not only would be incurred prior to and during construction
but also might be incurred for many years thereafter, would remain unknown quantities
until actually negotiated. Although pioneering in such a massive nuclear excavation project
would certainly add to the scientific and engineering stature of the United States,
proceeding with nuclear construction against extensive minority opposition would detract
from that prestige.
Summary
In the judgment of the Commission, the current prospects of nuclear canal excavation
are:
— At the present state of development of the nuclear excavation technology the
feasibility of its use in excavation of an Isthmian sea-level canal has not been
established. It is possible that the technology can be perfected to where such an
application is technically feasible, but many more nuclear excavation experiments
are needed. Technical, political, and budgetary constraints probably will continue
to slow development of the technology.
— The outlook on balance favors eventual attainment of international acceptance of
practical applications of the nuclear excavation technology, but the time needed to
establish the necessary arrangements under the Limited Test Ban Treaty is
unpredictable.
— It is not possible at this time to determine whether a nuclear excavated canal would
be acceptable to Panama. The use of nuclear excavation on Route 17 may be
precluded by economic developments in the vicinity.
— It is unlikely that nuclear excavation will become technically feasible on enough of
Route 17 to permit substantial cost savings in comparison with the cost of
all-conventional sea-level canal construction elsewhere in Panama.
45
— It is probable that the technical feasibility and cost advantages of the use of nuclear
explosives for excavation of portions of Route 25 in Colombia could be established
by an adequate program of experiments. The future acceptability of such a canal in
Colombia cannot now be determined.
46
CHAPTER V
GENERAL CRITERIA
Evaluation of the costs of the several routes considered for construction of a sea-level
canal required that the basic criteria of design and construction be the same for each route.
These criteria include: the maximum size of ship to be accommodated; the maximum
acceptable velocity of tidal currents; the size and shape of the navigation prism; the side
slopes of the excavation above the water surface required for stability; and the methods of
construction.
Size of Ships
Ships up to only 65,000 deadweight tons* can be passed through the locks of the
Panama Canal and very few ports in the United States can accommodate larger ships. The
world fleet, however, now includes many tankers and dry bulk carriers twice this size or
bigger. The Shipping Study Report (Annex IV) predicts that the proportion of such ships in
the world fleet during the period from 2000 to 2040 would probably be as shown in Table
ple
The Commission concluded from these data that the demands of future world
commerce would adequately be met by providing for the transit of ships of 150,000 DWT
under all normal conditions of operation of a sea-level canal between the Atlantic and
Pacific Oceans.
TABLE 11
FORECAST PROPORTIONS OF SUPER SHIPS IN THE WORLD FLEET
Size Equaled or Exceeded — DWT
100,000 150,000 200,000
Freighters
Bulkers
Tankers
*See Footnote on page 25, i
47
Transit Capacities
Traffic through the Panama Canal has built up to more than 15,000 ships per year. It is
estimated by the Panama Canal Company that the future limit, without construction of
additional locks, will be 26,800 transits per year.
Recent trends indicate that the average amount of cargo per ship will increase more
rapidly in coming years than will the number of transits because of the increasing numbers
of large bulk carriers and tankers appearing in the canal ship mix. This divergence of the
growth rates of cargo tonnages and ship transits would undoubtedly become greater with
the opening of a sea-level canal that could accommodate ships of 150,000 DWT or greater.
The Commission concluded from the studies described in Annex IV that the demands
of world commerce would be well satisfied by providing for 35,000 transits per year initially
by means that would not preclude later expansion to at least double or even treble that
number.
Navigation and Tidal Currents
Safety of navigation of a sea-level canal will be a controlling factor. The existence of
currents will impose few restraints on the passage of small ships but very large ships might
be unmanageable in an unrestricted canal under adverse tidal conditions.
Tidal fluctuations in the Atlantic along the Isthmus of Panama are small and somewhat
erratic. The tides on the Pacific side, on the other hand, are large and quite regular. The
resulting variations in level for a typical period are shown on Figure 17. The mean level of
the Pacific at Balboa averages eight inches higher than in the Atlantic at Cristobal.
If an unrestricted sea-level canal were built to connect these oceans, there would thus
be oscillating flow with net movements of water from the Pacific to the Atlantic. The
currents so produced would depend on the difference in levels at the time, on the length of
the canal, and on the size and shape of the navigation prism. The magnitude and direction of
such currents at all points along the several canals considered are set forth in Annex V
together with a description of the mathematical methods used to compute them. It was
found, for example, that on Route 10 the velocities of flow would be greatest at the
Atlantic entrance and would reach 5.1 knots on a few days each year and 3.7 knots under
average tidal conditions. Velocities of flow in a nuclear excavated canal would be
substantially greater, because of its greater cross-sectional area.
The Commission conducted extensive studies to determine the controllability of ships,
with consideration of the effects of currents, in a navigation prism of restricted width and
depth; these included a review of operating conditions in existing canals and restricted
waterways, a comprehensive mathematical analysis, and a series of tests of large-scale ship
models in a confined channel.
These studies indicate that:
1. The desirable speed of ships with respect to the land is 7 knots, equivelant to 8.05
statute miles per hour.
2. The speed of ships with respect to the water should not be less than 4 knots for
ships smaller than 50,000 DWT nor less than 5 knots for larger ships.
3. At least one powerful tug should be provided for control of each ship long enough
to cause blockage of the channel should the forward speed of this ship become less
than the velocity of the following current.
4. Powerful tugs should also be provided for assistance in stopping and for additional
control of all large ships and of small ships of limited maneuverability.
48
STAGE IN FEET PRECISE LEVEL DATUM
19 20 21 22 23 24 25
2 2
in hs ian a len oem EANISEAIEEVE Lin is nian nn, baa
0 ae eee LF ES _O EAE _ F O Le eZ 0
-2 1 ! 1 1 1 1 1 ! I 1 1 1 ! =2
ATLANTIC TIDE (CRISTOBAL)
= =
N
=
nN
AN
MEAN SEA LEVEL
CHA ANON B@AMWAO
CHA ANON A DOD
=
SEPTEMBER 1957
PACIFIC TIDE (BALBOA)
SEVEN DAY TIDE RECORD
FIGURE 17
49
Tug assistance is required for all large ships in the present canal and is expected to be similarly required in a sea-level canal.
FIGURE 18
Tidal Checks
The uncertainty of safety of navigation under all tidal conditions led to consideration
of anew concept: the installation of a tidal control structure at each end of a long restricted
reach to limit the velocities of flow in a sea-level canal. It is contemplated that one structure
and gate would be located close to the Pacific entrance and another 24 to 25 miles north
thereof. The check gates would be moved alternately into position across or out of the
channel at intervals of 6.2 hours or some multiple thereof when the Pacific is at the same
level as the Atlantic. Under these conditions, the maximum velocity of flow would be
approximately 2 knots at the Pacific entrance and less elsewhere. It is also contemplated
that structures for gates would be built close to the Atlantic entrance where, if a gate were
installed and employed alternately with the Pacific gate, the maximum velocity could be
held to approximately 3 knots.
The contemplated tidal controls do not resemble the tidal lock and by-pass arrangement
proposed in the 1947 Study. The gates would not function as locks; no lifting of ships
would be involved, and no ship would have to stop in transit. They would be operated as a
pair; one would be rolled or floated into position across the channel at an appropriate time;
50
ae SEEN
Scale model of a 250,000 DWT tanker undergoing tests in the Naval Ship Research and Development Center to determine
the controllability of large ships in a sea-level canal.
FIGURE 19
the other would be moved simultaneously back out of the way of oncoming ships. Their
position would then be reversed 6.2 or 12.4 hours later.
These tidal check gates would not have significant military vulnerability. Even if one or
both should be rendered inoperational by sabotage or military attack, they could easily be
removed from the channel. The higher tidal currents then encountered would not materially
impede the movement of warships and military cargo vessels through the canal. Figure 20 is
an artist’s sketch of a tidal check structure at one end of the bypass in a sea-level canal.
The use of tidal checks at the ends of a one-way channel would require that all ships be
transited in convoys, scheduled to arrive at a check just after it is opened so that no ship
would have to stop or materially change its speed. These times will not be random; they can
be predicted accurately many months in advance after a few observations are made to
measure the lag in time with respect to the Pacific tides.
The length of each convoy will necessarily be limited by the distance between the tidal
checks. It has been found, as described in Annex V, that 4 ship lengths from bow to bow
would be a satisfactory average spacing. This distance between ships plus an allowance of at
least one mile of clear space ahead of the first ship in a convoy and of one-half mile behind
the last ship gives the following for certain critical locations of checks:
51
Artist’s Sketch of a Tidal Check at the Entrance to a Bypass Channel
FIGURE 20
TABLE 12
MAXIMUM NUMBERS OF SHIPS IN CONVOYS
WITH TIDAL CHECKS IN USE
DISTANCE IN MILES NUMBER OF SHIPS
BETWEEN CHECKS IN CONVOY
The shortest distance shown in this tabulation is that between the ends of a bypass,
consisting of 2 separate one-way channels, that could be constructed to augment the
transit capacity of a single-lane channel on Route 10. The largest distance is that between
the Pacific and Atlantic entrances of a canal on either Route 10 or Route 14. The
intermediate distance is the longest that would permit the use of an 18.6 hour convoy cycle;
it also would put a tidal check at the Atlantic end of a future bypass on Route 10.
The Commission elected to include in the designs structures for support of tidal gates at
or near the ends of each sea-level canal under consideration except Route 25, at each end of
S2
the potential bypass on Route 10, and at a point 24 miles north of the Pacific entrance of
Route 14.
Figure 21 schematically portrays the location and operation of the tidal checks in the
single lane configuration. Figure 22 similarly shows the operation of the bypass
configuration.
Cross Section of Navigation Prism
The Commission recognized early in its studies that the transit capacity of a single-lane
channel on all but the very long routes would meet all probable demands for many years
and that this capacity could most economically be augmented by the addition of a bypass.
The Commission also recognized that the cost of construction would be increased greatly by
providing for two-way traffic, because the width of a two-way channel should be more than
double the width of a single-lane canal.
It was developed from the comprehensive studies described in Annex V that any of the
following combinations of ship speed, channel width, and channel depth would provide
equal navigability for 150,000 DWT ships:
TABLE 13
SINGLE-LANE CHANNEL DIMENSIONS FOR
SAFE NAVIGATION OF 150,000 DWT SHIPS
Speed in Water Bottom Width Water Depth
Feet Feet
9 Knots
11 Knots
The Commission recognized that the 9-knot ship speed in the water was for the
condition of 2-knots current with tidal checks in service and that the 11-knot ship speed was
based on passage against a 4-knot current. It accepted, however, the recommendation of its
Engineering Agent that this higher velocity be used for cost estimating purposes because it
may be found practicable over the years to operate in currents of this velocity, and because
it would permit passage of 250,000 DWT ships under controlled conditions.
The Commission, therefore, elected to use for all conventionally excavated channels a
single-lane navigation prism, having a bottom width of 550 feet, a center depth of 85 feet,
and a depth at the sides of 75 feet.
Side Slopes of Excavation
At the time the Panama Canal was built there was little knowledge of soil and rock
mechanics and much steeper slide slopes were used than would now be customary. Most of
53
AM AM PM PM PM
ATLANTIC OCEAN
APPROACH
CHANNEL
Two lanes
2 miles
TIDAL
GATE
SLOT
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PACIFIC OCEAN Nh
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6
Gates move atmean Convoy 1 clears Convoy 2 is about Gates move at mean Convoy 2 clears Gates move at mean
tide as Convoy 1 is one-way channel to enter one-way tide as Convoy 2 is one-way channel as tide as Convoy 3is
between them and channel trom the between them and convoy 3 starts to between them and
moving toward the Atlantic. moving toward the enter it. moving toward the
Atlantic Pacific Atlantic
11:58 AM 9:43 PM
PACIFIC TIDE TRACE
ROUTE 10
SINGLE-LANE
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
18.6-HOUR CYCLE
FIGURE 21
54
=
oO
oO
oc
a
a
?
CHANNEL
Two lanes
DESIGN CHANNEL
Two lanes
APPROACH
CHANNEL
I
~ 3:00 Am
Two lanes
2 miles
AM
Convoy 1b
soeeees a
Convoy 1a
Step 1
Convoys 1a and 1b
are in the two-lane
bypass section
about to enter the
one-lane sections as
the gates shift at
mean tide
Tidal
Convoy 2b
Step 2
Convoys 1a and 1b
clear the one-lane
sections and con-
voys 2a and 2b
enter the one-lane
sections behind
them.
Gates
PACIFIC
ATLANTIC OCEAN
Step 3
Convoys 2a and 2b
are now entirely
within the bypass
section approaching
the gates which shift
on the mean tide as
they approach.
ROUTE 10
BYPASS
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
6.2 HOUR CYCLE
FIGURE 22
55
OCEAN
Convoy 3a
——
9000000000)
Convoy 3b
=== =< =—=—
Step 4
Convoys 2a and 2b
clear the one-lane
sections and con-
voys 3a and 3b
enter the one-lane
section behind
them.
PACIFIC TIDE TRACE
00000ssees D>
MEAN NNN sss
I
Step 5
Convoys 3a and 3b
are now entirely
within the bypass
section approaching
the gates which shift
on the mean tide as
they approach. This
is identical to Step
1.
the slides along the Panama Canal have stemmed from this cause.
The Technical Associates of the Commission, after review of geologic and other
conditions along the existing canal and the several routes for a sea-level canal, recommended
that the slope criteria given in Table 14 be used in calculations of the quantities of material
to be excavated.
The proper side slopes for deep excavation in hard rock and soft rocks were also
investigated by the Engineering Agent, as described in Annex V. The findings of this study
were consistent with the recommendations of the Technical Associates. The Commission
accepted, for purposes of evaluating the costs of construction of a sea-level canal on each of
the several routes, the recommended slope criteria.
Construction Methods
The potential of nuclear excavation is discussed in a separate chapter; hence, this review
of construction methods is limited to conventional procedures.
Excavation will be the largest item of cost of a sea-level canal on any of the routes
considered, because of the tremendous volumes of material to be removed. The unit costs
(dollars per cubic yard) will vary widely depending on the nature of the materials and
whether or not the channel must be excavated below water. The unit cost of excavation of
hard rock will naturally be more than that of soft rock. The unit cost of removal of any
material will be less if the work can be done above water than if it has to be dredged, except
for unconsolidated deposits at moderate depths.
The Commission recognized that, in the years before actual construction of a sea-level
canal would be started, there probably will be major changes in methods and improvements
in equipment, but it directed that all estimates of cost be based on proved methods of
construction and on only foreseeable improvements of equipment now available. Four
general methods of excavation and their application to the different routes are described in
Annex V. These methods are:
1. Power shovels and truck haul disposal for isolated portions of the work and to
remove the tops of hills.
Power shovels and railroad haul disposal for the major portion of all excavation
above water.
3. Barge mounted shovels or draglines or bucket dredges and barge haul disposal of
material excavated below water.
4. Hydraulic dredges and pipeline disposal of unconsolidated sediments below water.
i)
56
TABLE 14
RECOMMENDED SIDE SLOPES OF EXCAVATIONS FOR
DIFFERENT MATERIALS AND HEIGHTS
Nature of Material Side Slopes of Cut
Horizontal + Vertical
High Quality Rock 0.375 Overall Including
Construction Benches
Intermediate Quality Rock 0.625 Overall Including
Construction Benches
Low Quality Rock Height of Cut in Feet
Such as Clay Shale 100 200 300 #400
Condition A
Condition B
Condition C
Condition A: For locations where the canal would be remote from the
existing canal. (The existing canal would be available for
use during a proving period.)
Condition B: For locations where the canal would be separate from the
existing canal but in close proximity. (Excavation would be
performed in the dry and gradual drainage would be possible
during construction. An observational period would be
available prior to the canal becoming operational.)
Condition C: Locations where the canal would be adjacent to the existing
canal in an area with a history of slides. (The area would have
undergone long-term creep, and the slopes would be subject
to rapid drawdown. The maintenance of traffic on the
Panama Canal during construction is considered.)
SV
Earth slide blocking the Panama Canal in the Gaillard Cut, October 1915
FIGURE 23
58
CHAPTER VI
ENVIRONMENTAL CONSIDERATIONS
Construction of a sea-level Isthmian canal would impact on the land and ocean
environments in several ways. The physical effects can be estimated with some confidence
for both. The total effects upon land ecology can also be estimated with confidence, but the
effects upon ocean life are now uncertain because of the dearth of knowledge of the
regional ocean ecology.
The Land Environment
Canal excavation on any route would require clearing a right-of-way across the Isthmus
and disposal of great volumes of spoil on land and off-shore. These effects from
conventional excavation would extend a few thousand yards from the canal routes; the spoil
areas and destruction of forested areas incidental to nuclear excavation would be more
extensive. The excavation and spoil disposal plans for each conventionally excavated route
provide for containment of most spoil in areas where runoff would be least harmful and
where the fill would be most useful.
Stream courses would be altered where they intersect a canal on any route.
Construction of a sea-level canal on either Route 10 or Route 14 would divide Gatun Lake;
in the case of Route 10 there would be no material change in total area, but on Route 14
the remaining surface area would be about 62 square miles as compared to the present area
of 165 square miles.
The Panama Canal is already a barrier to faunal migration along the Isthmus. Any new
canal would be an added barrier.
Detailed estimates of the areas that would be affected on each route are contained in
Annex V, Study of Engineering Feasibility, together with specific estimates of potential
environmental effects. It can be concluded from these estimates that all permanent effects
on land areas would be limited to the immediate vicinity of the canal routes and would
result in no harmful ecological changes of significant magnitude. For the conventionally
excavated routes, the potential changes of the land environment and the freshwater ecology
appear to be less than those that were created by construction of the existing canal which
required the creation of Gatun Lake.
Medical experience in Central America and medico-ecologic studies performed for the
Commission have demonstrated the need for stringent and continuing preventive-medicine
measures and a responsive medical support program. Insect and rodent control, waste
disposal, and health education would be particularly important. Immunization would be
directed primarily against yellow fever, smallpox, typhoid fever, and tetanus. A special
effort would have to be made to control malaria and other parasitic diseases, enteric
diseases, and other tropical ailments. The present conditions in the Canal Zone demonstrate
that a healthy environment can be achieved with a well planned and executed medical
program.
59
The Ocean Environment
Physical Effects
The permanent physical changes, e.g., temperature, currents, and salinity, to the ocean
environment as a result of opening a sea-level Isthmian canal would be small and limited to
areas adjacent to the canal entrances. The water level on the Pacific side, twice each day, rises
from 5 to 11 feet above and falls 4 to 10 feet below that on the Atlantic side. A sea-level
canal without tidal control structures would thus have strong currents that would change
direction twice each day with the rise and fall of the tides. While no single tidal phase would
endure long enough to cause a complete flow-through of water from one ocean to the other,
there would be a gradual net transport of water from the Pacific to the Atlantic because of
the slightly higher mean sea level of the Pacific. The transported water, however, would be
drawn from the upper levels of Panama Bay where it is already within a few degrees of the
water temperature on the Atlantic side. It would tend to become warmer as it moved back
and forth in the canal until it ultimately emerged at the Atlantic end. The predicted effects
on the receiving ocean’s temperatures or currents are insignificant.
Spoil disposal and breakwater construction would considerably alter the existing shore
configurations and fill in large offshore areas. However, similar operations affected almost as
large an area in the construction of the present canal. Colon on the Caribbean side and Fort
Amador on the Pacific side were once ocean areas. No harmful environmental effects have
been identified with these large landfills.
Underwater excavation on Route 14 would have a very substantial effect on the water
in Gatun Lake; there would be some effect also caused by underwater excavation in the
approaches to any canal. Excavation in the dry, however, which would represent most of
the work on Route 10, could have only a nominal effect upon ocean areas near the
entrances. It is unlikely that sediment would be carried in canal flows, predominantly from
the Pacific to the Atlantic, in excess of the sediments that would reach the oceans naturally.
Biotic Interchange
An unobstructed sea-level canal across the Isthmus would allow relatively easy passage
of marine organisms. Certain forms of marine life now pass through the Panama Canal even
though Gatun Lake provides a highly effective biotic barrier. Barnacles and other immobile
organisms are carried through on the hulls of ships, and a variety of small plants and animals
is carried in ballast water from one ocean to the other. Transfers of marine life by these
means have been taking place continuously for more than 50 years. No harmful results have
yet been identified in either ocean as resulting from them. However, linking the oceans with
an unobstructed salt water channel would greatly facilitate the movement of these and other
organisms.
Taxonomic studies indicate that the Atlantic and Pacific Ocean species along the
Isthmus are closely related, even though few are identical. The similarity results from the
linking of the Atlantic and Pacific Oceans until recent geologic time, perhaps 3 million
years ago. Concern has been expressed about the potentially undesirable biologic
consequences when such closely related species are allowed to intermingle and about the
ecological consequences of the movement of marine organisms generally. Marine biologists
are not in agreement on this subject; their predictions range from disaster to possible
60
beneficial results.
Because of the great divergence of views on the ecological consequences of a sea-level
canal, the Commission had a study made of the potential effects. This study, a limited one
because of time and fund constraints, was accomplished by the Battelle Memorial Institute
(BMI) in association with the Institute of Marine Sciences of the University of Miami. The
ocean populations on both sides of the Isthmus were studied, giving special attention to the
fish and crustaceans that are important to commercial and sport fishermen. The potential
transport of water, chemicals, sediment, and planktonic organisms between the oceans was
mathematically modeled and the resultant effects postulated. The BMI findings are
summarized as follows:
On the basis of the limited ecological information currently available we were
unable to predict the specific ecological consequences of marine mixing via a
sea-level canal. Preliminary modeling studies indicate that the net flow of water
would be from the Pacific to the Atlantic. This would result in minor
environmental changes near the ends of the canal and near the shore to the east of
the Atlantic terminus. Passive migration of planktonic organisms would occur
almost entirely in the same direction. Active migration of nekton could occur in
either direction, but environmental conditions in the canal would favor migration
from the Pacific to the Atlantic. We have found no firm evidence to support the
prediction of massive migrations from one ocean to another followed by
widespread competition and extinction of thousands of species.
Evidence currently available appears to indicate a variety of barriers to migration
of species from one ocean to another and/or the subsequent establishment of
successful breeding colonies in the latter. Environmental conditions in the canal
would constitute barriers to the migration of both plankton and nekton, and the
effectiveness of these barriers could be enhanced by engineering manipulations of
freshwater inputs to the canal and other artifical means. The marine habitats and
biotic communities at the opposite ends of most proposed sea-level canal routes are
strikingly different. Where similar habitats do occur on both sides of the Isthmus,
they are already occupied by taxonomically similar or ecologically analogous
species. These differences in environmental conditions on the two sides of the
Isthmus and the prior occupancy of similar niches by related or analogous species
would constitute significant deterrents to the establishment and ecological success
of those species which may manage to get through the canal.
It is highly improbable that blue-water species like the sea snake and the
crown-of-thorns starfish could get through the canal except under the most unusual
circumstances. On the other hand, we can be fairly certain that some Pacific species
could pass through the canal and could become locally established in the Pacific
waters of the Atlantic. It is also improbable that these species would be able to
survive in the Atlantic outside the region of environmental modification due to
water flow through the canal. The Pacific species most likely to become established
along the Caribbean shore are those of estuarine and other shallow-water habitats,
the very habitats that have been least thoroughly studied.
To improve the precision and reliability of these and similar ecological
predictions would require additional information and quantitative data which
61
could be provided only by a comprehensive program of field, laboratory, and
theoretical (modeling) studies. Extensive taxonomic surveys would be required to
improve our knowledge of the biota of the Tropical Western Caribbean and
Tropical Eastern Pacific. Except for a few economically important species,
ecological life history data are virtually non-existent. Basic biological studies
would be required to obtain such information. The geographical extent and
physiochemical characteristics of the marine habitats on the two sides of the
Isthmus are imperfectly known from a few cursory surveys. The species
composition and functional-ecological structure of the biotic communities that
characterize these habitats are imperfectly known and inadequately understood.
The parameters required to predict the flow of water and plankton through the
canal have not been adequately measured. The processes of migration, establish-
ment, and competition have been but little studied and are not well understood. To
remove these deficiencies in our knowledge would require a comprehensive,
long-term program of well-coordinated physical oceanography, marine ecology, and
basic marine biology studies.
The risk of adverse ecological consequences stemming from construction and operation
of a sea-level Isthmian canal appears to be acceptable. Since it is not possible to determine
the specific ecological effects without extensive studies before, during, and after
construction, the Commission requested the National Academy of Sciences (NAS) to
recommend a program of long-term studies to be undertaken if the decision is made to build
a sea-level canal. The complete NAS report and recommendations, together with the report
of the BMI study, are included in Appendix 16 to Annex V, Study of Engineering
Feasibility.
Should future research indicate the need for a biotic barrier in addition to tidal gates, it
would be possible to install a temperature or salinity barrier. No such barrier was included in
the designs, because the need for anything in addition to tidal gates has not been
established. A thermal barrier created by discharge of hot condenser water from a power
plant into the canal between the tidal gates would be feasible, although the costs would be
high. Delivery of fresh water from Gatun Lake into a Route 10 or Route 14 sea-level canal
between the tidal gates would be practicable, but the available supply of water is limited.
Continuous operation of tidal gates on either Route 10 or Route 14 would accommodate all
potential traffic past the year 2000, by which time the consequences of increased migration
of biota through the canal should have been determined.
Combined Effects
The environmental impact statements required by Section 102 of the National
Environmental Policy Act of 1969 (Public Law 91-190) are included in Annex V, Study of
Engineering Feasibility. These statements cover not only the effect of mixing the oceans but
other environmental changes which could be expected as a result of constructing a sea-level
canal.
62
CHAPTER VII
ANALYSIS OF ALTERNATIVES
The choice of a feasible sea-level canal excavated by conventional means is limited to
Routes 10 and 14. In the analyses which follow these two alternatives are examined in
detail.
The route technically most promising for construction using nuclear explosives is Route
25 in Colombia; this is analyzed for possible future consideration, should the feasibility of
nuclear excavation eventually be established. A limited analysis of Route 17 is also included,
although its selection is considered unlikely.
As a basis for evaluating the incremental costs and benefits of a sea-level canal, an
analysis of augmentation of the existing lock canal is also provided.
Each of these alternatives is evaluated on the bases of its engineering feasibility, cost,
capacity, expandability, political acceptability, and its defense aspects.
Routes 5, 8 and 23 are analyzed only briefly, inasmuch as they are clearly less desirable
than other routes.
A brief description of the capabilities of the present lock canal is provided as a point of
departure.
The Panama Canal
The existing lock canal (Route 15) consists of short sea-level approaches to an elevated
midsection formed by Gatun Lake, which is regulated between elevations 82 and 87 feet
above sea level (Figure 24). The Gatun Locks on the Atlantic side consist of parallel twin
locks of three equal lifts. On the Pacific side there are two lock structures — a double lift at
Miraflores which raises transiting vessels to an intermediate pool called Miraflores Lake, and
a single lift at Pedro Miguel raising the vessels to the level of Gatun Lake. All lock chambers
are 1,000 feet long, 110 feet wide, and at least 41 feet deep. The lock dimensions limit
transits to ships with lengths of less than 1,000 feet, beams of not more than 106 feet, and
drafts of less than 40 feet (approximately 65,000 DWT). Its annual capacity is now limited
by the available water supply to approximately 18,000 transits per year. The ultimate
capacity of the existing locks, upon completion of the long-term improvement program of
the Panama Canal Company, is estimated to be 26,800 annual transits. This program.
involving costs of approximately $100 million, includes provisions for pumping sea water
into Gatun Lake or recirculating lockage water.
Alternatives Eliminated from Further Consideration
Routes 5, 8, 17, and 23 were found to have disadvantages of sufficient magnitude to
eliminate them from consideration as alternatives to other routes. The reasons for doing so
are briefly summarized. Details are in the Annexes to this report.
63
CARIBBEAN
SEA
CA RPE BEAN OOSse A
AREA OF
| COVERAGE
LOCATION MAP
SCALE IN MILES
Oo 50 100
4
\ .
> as CHORRERA
ct, PUERTO CAIMITO »
\o
PA C.1 FF 1 CoO faa a,
FIGURE 24
THE CANAL ZONE
SCALE IN MILES
5 0 5
EEE
DEPTH IN FATHOMS
64
al ST ERA PO ON a a
Gatun Locks at the Caribbean end of the Panama Canal
FIGURE 25
Widening the Panama Canal channel from 300 feet to 500 feet was completed in 1970.
FIGURE 26
65
we
Miraflores Locks and excavation for third locks at left. Pedro Miguel Lock and Gaillard Cut are in the background.
FIGURE 27
The Panama Canal is now lighted throughout its length and operates around the clock.
FIGURE 28
66
Route 5 Lock Canal (Figure 29)
Data available from 1931, 1947, and 1964 studies of the 167-mile route in Nicaragua
indicate that a lock canal capable of accommodating 110,000 DWT ships and having
approximately the same annual transit capacity as the existing Panama Canal would cost
about $4 billion. A lock canal designed to meet the 150,000 DWT ship size and 35,000
annual transit capacity criteria would cost much more.
Route 8 Sea-Level Canal Excavated by Either Nuclear or Conventional Excavation
A sea-level canal on Route 8 through Nicaragua and Costa Rica (Figure 29) would cost
an estimated $5 billion to construct by nuclear methods, if available, and $11 billion by
conventional methods. This latter cost is prohibitive, and nuclear excavation is infeasible for
the reasons given in Chapter IV.
Route 17 Sea-Level Canal Excavated by a Combination of Nuclear and Conventional
Excavation
Route 17, approximately 100 miles east of the present Panama Canal (Figure 30) is
remote from Panama’s developed areas — an essential requirement for nuclear excavation.
Approximately 30 miles of its length through the high elevations (that involve the greater
portion of the total excavation volume) appear technically suitable for nuclear excavation.
Estimated construction costs, assuming partial nuclear excavation would be feasible, total
$3.1 billion — more than the estimated cost of all-conventional construction on Route 10 or
Route 14.
The problems related to nuclear excavation described in Chapter IV are not the only
obstacles to a Route 17 canal. Panama could be expected to object, for the Route would
involve major dislocations of the economy of Panama. Panama City and Colon depend upon
the present canal and its associated military bases directly and indirectly for some 74 per
cent of their economic activity. Although the United States military bases could be left
where they are if canal operations were transferred to Route 17, a large phasedown of
employment and business activity would accompany the closure of the present canal. The
Stanford Research Institute estimates that employment within 30 miles of the present canal
would decline by 45,000 with the changeover to Route 17 and only 36,000 new jobs would
develop in the new area. The total Panamanian GDP is also estimated to grow somewhat
more slowly with the construction and operation of a Route 17 canal than with one on
Route 10 or Route 14.
Route 17 offers some military advantages because of its remoteness and its partially
nuclear excavated channel (Annex II, Study of Canal Defense). The wide, deep nuclear
reaches, comprising three-fifths of the total land cut, would be relatively invulnerable to
blockage by scuttled ships, making defense a less difficult problem than on other routes.
However, its potential advantages do not now appear to be significant in comparison with
the magnitude of the potential problems in nuclear excavation and in transfer of canal
operations away from the vicinity of the present canal.
Route 23 Conventional or Combined Nuclear and Conventional Sea-Level Canal
The sea-level canal_on Route 23 (Figure 30), proposed by a representative of the
Government of Colombia, would have a length of 146 miles, including more than 27 miles
67
NICARAGUA
AREA OF
COVERAGE
CARIBBEAN SEA
Ss:
ae
PACIFIC
OCEAN
LOCATION MAP
SCALE IN MILES
LAKE
77,
i CO
MANAGUA \__<7
\ A ~¢(GRANADA
Vz
\, *S.
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-ONVENTIONAL ¢
we
PACIFIC
OCEAN
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LOCK CANAL ROUTE 5 eo “Semmes |
SEA-LEVEL CANAL ROUTE 8
68 SCALE IN MILES
10 0 10-20
30
CARDE EH AN SEA
CARIBBEAN SEA
AREA OF
COVERAGE
LOCATION MAP
SCALE IN MILES
50
GULF OF
SAN MIGUEL
os WM NDELARIA
Sue BAY,
)
yf TURBO
OLOMBIA
HIGHLANDS
ROUTE 25
RIO CURICHE
HUMBOLDT BAY
LEGEND
EO=O=O=aBe wuciear excavation
Gu «CONVENTIONAL EXCAVATION
N
\
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FIGURE 30 SEA-LEVEL CANAL ROUTES
17, 23, AND 25
SCALE IN MILES 69
Sia eV? See eS
DEPTHS IN FATHOMS
"AS
ad oS
Line camp at 1000 foot elevation where Route 17 crosses the Continental Divide
FIGURE 31
of seaward approach channels. This alone makes it non-competitive with other routes.
Approximately one-third the length would be in Colombia, generally along the trace of
Route 25, and two-thirds in Panama. The Pacific terminus would be the same as for Route
17 and its Caribbean terminus the same as for Route 25.
Were nuclear excavation feasible, about 20 miles through the Continental Divide would
be excavated by nuclear explosives. The remainder at lower elevations would be
conventionally excavated. Construction costs, based on the limited data available, are
estimated to range from $2.4 billion with partial nuclear excavation to $5.3 billion for
excavation wholly by conventional methods.
The great length of a Route 23 sea-level canal would involve greater operating and
maintenance costs than would other routes. Although there could be political advantages in
having a canal pass through two host countries, the technical disadvantages of Route 23 and
the obvious economic disadvantages for Panama in a remote canal that shared its revenues
with Colombia combine to eliminate this route from further consideration.
Route 25 Conventional and Nuclear Sea-Level Canal
Route 25 (Figure 32) is wholly within Colombia near the Panamanian border. It is
approximately 200 miles east of the existing Panama Canal. Its total length is 101 miles. A
70
CAKE Bik AON SE A RICA
CARIBBEAN SEA
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~ DO
SS SASARDLSASARDI PT.
| “PASS
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PR
AREA OF
COVERAGE
ce
Q\CALEDONIA | (G5
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\ LOCATION MAP
\ SCALE IN MILES
0
GULF OF
SAN MIGUEL
FLOOD CONTROL
LEGEND
ATRATO DIVERSION
LOWER SALAQUI DIVERSION
UPPER SALAQUI DIVERSION
INTERCEPTOR CANAL
[Teese
DROP STRUCTURE A
Bare MINOR CONVENTIONAL DIVERSION CHANNEL
(
a--=-- NUCLEAR DIVERSION CHANNEL
PACTIER EC OCEAN
PACIFIC TOWNSITE \\
AND HARBOR FACILITIES |S
HUMBOLDT BAY
LEGEND JETTIES,
SQ=QaOaBPe wctear excavation
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N
FIGURE 32
SEA-LEVEL CANAL ROUTE 25
SCALE IN MILES 71
iO 0 0 SSO
DEPTHS IN FATHOMS
a -
S o Ee ite
Se a ie - >
on ; Se >
a oO ee
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The town of Rio Sucio on the bank of the Atrato River. Excavation of this section of Route 25 through the flood plain of
the Atrato River would be accomplished by hydraulic dredging.
FIGURE 33
sea-level canal on this route would not be competitive in cost with other routes without the
economies promised by nuclear excavation.
Approximately 20 miles of Route 25 through the Continental Divide, the upper
Truando River Valley, and the Saltos Highlands would be excavated by nuclear explosives.
The remainder of the route, starting with elevations below 75 feet in the Truando Valley,
would be excavated conventionally almost entirely by hydraulic dredging. Most of this
portion of the route is through the flood plain of the Atrato River at elevations only a few
feet above sea level. At isolated high spots and at the juncture of the nuclear and
conventionally excavated reaches conventional dry excavation methods would be used.
Hydraulic excavation along nearly 80 miles of Route 25 at low elevations would be
relatively inexpensive, and the incremental costs of wider channels would be small in
comparison with the costs of wider channels on other routes.
Two alternatives, shown schematically in Figure 34, are:
— The single bypass configuration.
— The dual lane configuration.
In order to meet the initial 35,000 annual transit capacity criterion, the length of the
route would require at least one bypass, which ideally should be located in the center of the
single-lane channel and be equal to one-third the length of that channel. The 101-mile length
72
ELEVATION—FEET
rm
4 ~~ ATRATO
FLOOD PLAIN
"RIQ SUCIO
HUMBOLDT Phen
BAY COLOMBIA
PACIFIC ATLANTIC
SIDE CONTINENTAL SIDE
DIVIDE
900
Zo0 CONVENTIONAL EXCAVATION
500
300 TRUANDO VALLEY ATRATO VALLEY
100 NUCLEAR
0 EXCAVATION
CHANNEL BOTTOM—™*
-100
0 20 40 60 80 100
DISTANCE—MILES
PROFILE
20 MILES 25 MILES
28 MILES
(BY-PASS)
(SINGLE
(2—LANE) (SINGLE LANE)
98 MILES
c 2 MILE LAND CUT 3 MILE
APPROACH CHANNEL APPROACH CHANNEL
(2-LANE) BYPASS PLAN
LEAR
EXCAVATION 2—550' X 70’ CHANNEL SECTIONS
78 MILES
20 MILES APPROACH CHANNEL
APPROACH CHANNEL (2 MILES)
(2 MILES) DUAL LANE PLAN
ROUTE 25 CHANNEL CONFIGURATIONS
FIGURE 34
5
of a canal on Route 25 would limit peak tidal currents to 3 knots. The capital cost of this
canal has been estimated, as shown in Annex V, to be $2.1 billion. However, as stated in the
report of the Commission’s Technical Associates:
RK
A valid comparison cannot be made between Routes 10, 14C and 14S, all
of which would be excavated entirely by conventional means, and Routes 17
and 25, both of which require nuclear excavation for the planned
construction. Nuclear excavation is not yet a proven construction technique
and there is no assurance that construction plans and cost estimates based
on present knowledge are valid. Therefore, dollar cost comparisons at this
time have no true significance.
Alto Curiche weather station near southern end of Route 25
FIGURE 35
Colombia’s lack of enthusiasm for a United States-controlled canal on her territory is
discussed in Chapter II, and the current uncertainties in regard to the feasibility of nuclear
canal excavation are described in Chapter IV. However, both the technical and political
prospects of eventually employing nuclear explosives for canal excavation appear more
promising for Route 25 than for any other route.
Defense of a sea-level canal on Route 25 would present complex problems. Its land
length is nearly three times that of routes in Panama, and all defense facilities — buildings,
roads, airfields, etc. — would have to be provided. It is unlikely that United States military
74
forces could be stationed in Colombia. Although the Colombian armed forces would be
capable of providing a measure of security for a Route 25 canal, outside assistance would be
required to provide a level of security acceptable to the United States.
A critical defense problem that would accompany construction on Route 25 is that of
security of the present canal during the 10- to 15-year construction period. If construction
were undertaken as a result of inability to reach agreement in negotiations for a new canal in
Panama, a hostile environment would almost certainly develop. In this event, defense of the
existing canal could be difficult and expensive.
At the present, a canal in Colombia controlled by the United States appears neither
desirable for the United States nor acceptable to Colombia. Should construction of a new
canal elsewhere be long deferred and the practicality of nuclear canal excavation be proved
in the meantime, it is possible that other factors bearing on the acceptability of a sea-level
canal in Colombia would have changed and Route 25 would merit reconsideration.
The Third Locks Plan
There have been many proposals for increasing the capacity of the present canal by
construction of additional locks. The most promising are variations of two basic plans: The
Third Locks Plan and the Terminal Lake Plan. The former was actually initiated in 1939 and
discontinued after expenditure of approximately $75 million on excavations for larger locks
adjacent to the existing ones. The new locks would have been 140 feet wide, 1200 feet long,
and 50 feet deep. Locks of this size would accommodate vessels of up to approximately
110,000 DWT.
The Terminal Lake Plan would consolidate Miraflores and Pedro Miguel Locks on the
Pacific side, raising Miraflores Lake to the level of Gatun Lake. In the process a third lane of
locks would be added on both the Atlantic and Pacific sides. This plan has the advantage of
providing an anchorage area above the Pacific locks which would eliminate navigation
hazards now encountered in that area. A variation of the Terminal Lake Plan, proposed by
S.2228 and H.R. 3792, 91st Congress, provides for three lanes of locks, the largest being
140 feet wide, 1200 feet long, and 45 feet deep. The Pedro Miguel Lock would be
eliminated and the operating level of Gatun Lake would be raised 5 feet to a maximum of
92 feet above sea level.
None of the proposed lock plans would provide for the transiting of 150,000 DWT
ships, the minimum size that would enable the canal to compete with alternate routing for
bulk cargo. Hence, a Deep Draft Lock Canal Plan was developed that incorporates the best
features of the proposed plans with locks (160 feet by 1450 feet by 65 feet) capable of
accommodating 150,000 DWT ships. This plan (Figure 36) provides a reference base for
evaluation of sea-level canal alternatives. Table 15 summarizes its characteristics and costs.
None of the proposed lock plans, including the Deep Draft Lock Canal Plan, would
permit transit of the United States Navy’s largest aircraft carriers which have angled flight
decks too wide for the locks. The estimated construction cost of locks adequate for these
carriers was $800 million more than the cost of locks for 150,000 DWT ships. Therefore, a
lock canal capable of transiting these carriers was given no further consideration.
The addition of a third lane of locks would increase annual transit capacity by
approximately 8,000, making the toal annual capacity 35,000. This capacity could
75
CARIBBEAN
CARIB. BoB es a
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COLOMBIA
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FIGURE 36
DEEP DRAFT LOCK CANAL
76 SCALE IN MILES F
es
DEPTH IN FATHOMS
TABLE 15
ROUTE 15 DATA ESTIMATES
Total construction cost $1,530,000,000
Channel excavation volume 560,000,000 cubic yards
Channel excavation cost $570,000,000
Cost of new locks $550,000,000
Construction time 10 years
Operation and maintenance costs $71,000,000/year
(for 35,000 transits)
These data are based on construction and operation of a deep
draft lock canal with a land cut of 36 miles and 20 miles of
approach channels. Eight miles will have a 500- by 65-foot
channel (75-feet deep at centerline). The remainder will accommodate
two-way traffic. A third lane of locks will be added to the
existing locks. They will be 160- by 1450- by 65-feet and will
accept 150,000 DWT ships.
This improved lock canal would have an effective capacity of
35,000 transits per year. At this capacity, the time lost by
the average ship in slowing down, awaiting its turn to enter
the canal, transiting, and then regaining open ocean speed is
estimated to be about 25 hours.
meet projected demands for commercial transits through this century at a lesser cost than
that of a sea-level canal. This is its only major advantage. However, expansion to meet
further traffic growth would not be practicable.
The United States has held that the provisions of the Treaty of 1903 permit the
building of a third lane of locks. This may not be a practicable alternative because a
controlling determinant of the long-term viability of any course of action in Panama is its
acceptability to the government and people of Panama, the United States, and, hopefully, to
Latin America generally. It seems obvious that major augmentation of the existing canal
would not serve United States interests unless accomplished under a new treaty arrangement
or major revision of the present treaty willingly entered into by Panama.
Augmentation of the existing canal under treaty arrangements comparable with those
proposed in 1967, with an appropriate extension of the period of United States control,
would have favorable effects on the economy of Panama (see Annex I, Foreign Policy
Considerations). The political disadvantage of the third-locks solution is that it would tend
to increase operating personnel and defense requirements that are currently causes of
concern to Panama.
Construction of a third lane of locks would not reduce the vulnerability of the lock
canal to long-term interruption by sabotage or military attack. The critical weaknesses of
the locks and the high level lake would remain unchanged. The basic vulnerability of the
i
lock canal would continue to require large defense forces on site and provisions in United
States strategic plans for the contingency of long-term closure of the canal in wartime. The
lock canal’s current inability to transit the Navy’s aircraft carriers would continue.
Route 14 Conventionally Excavated Sea-Level Canal
The two alinements of Route 14 that were evaluated are identical except through the
Continental Divide (see Figure 37). Both follow the trace of the present Panama Canal
without its many angularities. Route 14 Combined (14C) would involve deepening and
widening of the present Gaillard Cut; Route 14 Separate (14S) would require a new cut
through the Divide about one mile to the southwest of the present cut. Both alinements pass
under the existing bridge at the Pacific end of the present canal and utilize excavation
already accomplished for the unfinished third locks project.
The combined cut offers considerable savings in the volume of excavation because of
the lower elevation through the Divide. However, only the separate cut permits excavation
in the dry to project depth in the Continental Divide area. A major disadvantage of the
combined alinement is its inevitable interference with the operation of the existing canal
during the ten or more years of actual construction. The Gaillard Cut is now only 500 feet
wide and must be operated on a one-way basis for the largest ships that transit the canal.
Cut widening and deepening would further limit capacity during the construction years.
Excavation to 85 feet below sea level in this cut could induce slides that would block the
existing canal for long periods. These and other potential disadvantages of Route 14C
discussed in detail in Annex V led the Commission to conclude that Route 14S would be
the preferable sea-level canal alinement within the existing Canal Zone, regardless of its
slightly greater cost.
Three feasible design configurations for Route 14S have been considered (Figure 38).
Two include a centrally located single-lane section while the other includes two parallel
single-lane sections; all sections are cut to the design channel criteria. Each configuration
includes 1400 by 85 foot two-lane approach channels at both its Atlantic and Pacific ends.
The configurations, in the ascending order of cost and capacity, are:
— A 33 mile single-lane section.
— A 24 mile single-lane section.
— Two parallel 19 mile single-lane sections.
Each of these could be constructed with check gates to limit the tidal currents. The location
of the tidal checks would vary with the configuration and the maximum acceptable current.
The methods of operation with tidal gates in the various configurations of Route 14S,
channel design, and convoy operations would be essentially the same as for Route 10,
discussed later in more detail. The initial transit capacity would be at least 35,000 annually.
The topography of Route 14S does not lend itself to a bypass, which should be located
along the center third of a canal alinement to be effective. Consequently, the logical
expansion steps involve progressive shortening of the one-way section by extending the
Atlantic approach across Gatun Lake, where elevations are much lower than those close to
the Pacific. The maximum currents in the single-lane section would tend to increase as this
section became shorter, but tidal gates could provide appropriate control. Shortening the
restricted section would significantly increase capacity.
78
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SCALE IN MILES 79
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—_————E———————
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FIGURE 37
ELEVATION — FEET
7 z v8 eulcy OF Pamanga ——
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DISTANCE — MILES
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APPROACH
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(2-Lane)
(2-Lane)
a TIDAL CHECKS
4
APPROACH CHANNEL 24 MILES CHANNEL:
17 MILES RESTRICTED SECTION 13 MILES
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APPROACH CHANNEL EXTENSION — B
m<— TIDAL CHECK
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22 MILES jG MILES: oe eee 713 MILES
DUAL CHANNEL — C
ROUTE 14S CHANNEL CONFIGURATIONS
FIGURE 38
80
In the final phase of construction of a sea-level canal on Route 14S the water in the
channel would be lowered from the level of Gatun Lake to sea level. This would be
accomplished by removal of the plugs left at either end of Gatun Lake and the simultaneous
construction of an earth dam in the old canal channel near Gamboa to divert the Chagres
River to the Pacific. This drawdown would create a hazard of slides. As much as three
months would be required for the changeover, during which time there could be no traffic
through the canal.
Political factors bearing on the feasibility of a sea-level canal on any route within or
near the Canal Zone and the effects upon the economy of Panama would not be measurably
different (Annex I). Route 14 has the advantage, however, of being wholly within the Canal
Zone. Construction on Route 14 would require no acquisition of privately owned land and
would create the minimum local disturbances.
TABLE 16
ROUTE 14S DATA ESTIMATES
Total construction cost $3,040,000,000
Channel excavation volume 1,950,000,000 cubic yards
Channel excavation cost $2,210,000,000
Construction time 16 years (includes 2 years
for preconstruction design)
Operation and maintenance cost $56,000,000/year (for
35,000 transits)
These data are based on construction and operation of a sea-level
canal with a 33-mile single-lane land cut and 21 miles of two-lane
approach channels. Ships up to 150,000 DWT could be accommo-
dated under all conditions; larger ships up to 250,000 DWT could
be accommodated under controlled conditions. Tidal gates would
be installed and used continuously to limit current to no more than
2 knots.
This configuration would have an effective capacity of 39,000
transits/year. At this capacity, the time lost by a ship in slowing
down, forming into a convoy, passing through the canal, and re-
gaining open ocean speed would be comparable to time lost by a
ship passing through the Panama Canal in 1970. At lower traffic
levels, time lost would be significantly less.
If experience showed that additional capacity would be required,
the two-lane approach channel on the Atlantic end could be extended
inland across Gatun Lake for 9 miles, reducing the single lane reach
to 24 miles. The cost of this additional effort would be $430,000,000
The new configuration would have an effective capacity of 55,000
transits/year.
81
Interference with traffic through the existing canal during construction of a sea-level
canal and the ultimate elimination of the existing canal and the partial elimination of Gatun
Lake would be significant disadvantages from both United States and Panamanian
viewpoints.
Route 14 has the military advantage of being in practically the same location as the
Panama Canal for which all existing defense installations have been sited, but there are two
disadvantages to Route 14 from the defense viewpoint: the vulnerability of the existing
canal during the construction period to interruption by slides or by military attack would be
greater than at present, and there would be many miles of barrier dams to defend along each
side of the sea-level canal across Gatun Lake.
Route 10 Conventionally Excavated Sea-Level Canal
Route 10 (Figure 39) is approximately 10 miles to the west of the existing Panama
Canal. With the exception of two short reaches across arms of Gatun Lake, the route lies
outside the present Canal Zone. The area is undeveloped except for a few small farms and
grazing lands interspersed with jungle. The proximity of the Canal Zone would permit use of
existing Panama Canal facilities in support of canal operations.
An analysis of possible sea-level canal configurations on this route leads to three distinct
alternatives, each of which would be 36 miles in length between two double-lane approach
channels 1400 feet wide and 85 feet deep (Figure 40). Listed in ascending order according
to capacity and cost, they are:
— A single-lane channel for the full length of 36 miles.
— An 11 mile single-lane channel on each end connecting with a 14 mile centrally
located bypass section consisting of two single-lane channels.
— Two parallel 36 mile single-lane channels separated by a berm.
This order is also the sequence in which the canal could be constructed to provide
progressively greater capacity. The ultimate capacity would be reached by extension of the
bypass across the Isthmus, providing two parallel one-way channels.
A combination of conventional excavation techniques would be used. A system of
barrier dams would be employed to isolate the construction area from Gatun Lake and the
present canal and thereby permit excavation in the dry of the bulk of the material.
Table 17 gives the capacity-cost data for the single lane configuration.
Prism design and ship spacing have been based on operating in 4-knot currents, but the
Commission considered it prudent to base initial capacity calculations on tidal currents
being limited to 2 knots and to incorporate into conceptual designs and cost estimates the
facilities required for that purpose. The installation of a tidal control structure at the Pacific
entrance and another 25 miles north thereof in the basic one-way channel would accomplish
this purpose and permit more than 35,000 transits per year.
Past negotiations indicate that a sea-level canal on Route 10 should be acceptable to
Panama under reasonable treaty conditions. The precise treaty provisions can be determined
only by further negotiation, but the objectives of the United States and Panama in any canal
on Panamanian territory do not appear to be irreconcilable.
Construction of a canal on Route 10 would not bring about any shift of canal
operations from near Panama’s metropolitan centers. The avoidance of interference with
traffic during the construction phase and the preservation intact of the existing canal after a
82
e
CARIBBEAN
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AREA OF
| _ COVERAGE
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SEA-LEVEL CANAL ROUTE 10
SCALE IN MILES
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ROUTE 10 CHANNEL CONFIGURATIONS
FIGURE 40
84
TABLE 17
ROUTE 10 DATA ESTIMATES
Total construction cost $2,880,000,000
Channel excavation volume 1,870,000,000 cubic yards
Channel excavation cost $2,030,000,000
Construction time 14 years (includes 2 years for
preconstruction design)
Operation and maintenance cost $57,000,000/year (for 35,000
transits)
These data are based on construction and operation of a sea-level
canal with a 36-mile single-lane land cut and 17 miles of two-lane
approach channels. Ships up to 150,000 DWT could be accommo-
dated under all conditions; larger ships up to 250,000 DWT could be
accommodated under controlled conditions. Tidal gates would be
installed and used continuously to limit current to no more than
2 knots.
This configuration would have an effective capacity of 38,000
transits/year. At this capacity, the time lost by a ship in slowing
down, forming into a convoy, passing through the canal, and
regaining open ocean speed would be comparable to time lost by
a ship passing through the Panama Canal in 1970. At lower traffic
levels, time lost would be significantly less.
If experience showed that additional capacity would be required on
this route, a 14-mile bypass would be constructed for about
$460,000,000. It would have an effective capacity of 56,000
transits/year and, at all levels of capacity, would allow less
time in transit than a single-lane canal.
new canal is opened would have distinct advantages for Panama. Construction of a canal on
Route 10 would permit future operation of the existing canal in combination with the
sea-level canal and leave Route 14 available for construction of a second sea-level canal if
one were ever needed.
While the advantages for Panama in either a Route 14 or a Route 10 sea-level canal
should make either acceptable under a mutually satisfactory treaty arrangement, the
comparative advantages and disadvantages on balance favor Route 10. In any arrangement
for operation of a sea-level canal on Route 10, it would be unacceptable for the present
canal to pass to Panamanian control and be operated in competition with the sea-level canal.
The Stanford Research Institute’s study of sea-level canal economic impacts estimated
that the maximum reduction in canal employment for a sea-level canal on Route 10, in
comparison with continuing the present lock canal, would be 6,300 employees. On the
85
other hand, more than 7,000 employees would be needed during the sea-level canal
construction period. The foreign exchange earnings for Panama from sea-level canal
construction, estimated to be more than $1 billion, plus the greater long-term earnings from
the new canal capacity, would permit greater total economic development and employment
in Panama than continuation of the existing canal. The Stanford Research Institute
estimated that the gross domestic product (GDP) and total employment in Panama would
not only grow rapidly during the sea-level canal construction years but also would thereafter
continue to be greater than it would be were the present canal continued under the existing
treaty (Annex I).
One disadvantage of Route 10 is that it lies outside the existing Canal Zone.
Construction on it would require acquisition of some privately owned land, but the needed
land is relatively undeveloped and its acquisition should involve no significant problems or
cost. The question of jurisdiction in the canal area is not material to the choice of sea-level
canal routes in Panama, inasmuch as a new treaty is expected to be negotiated for
construction on any route. Resolution of the issues of Panamanian sovereignty and
jurisdiction of the canal operating authority should affect all routes equally.
Defense of a sea-level canal on Route 10 would require only limited expenditures for
new defense facilities, such as helicopter landing areas, access roads, and facilities at the
canal entrances for small Navy elements. The additional distance to Route 10 is so small
that all major defense requirements would continue to be met by existing military
installations in the Canal Zone. Not only would a sea-level canal on Route 10 be far less
vulnerable than a lock canal, but also it would be somewhat less vulnerable than one on
Route 14 with its more extensive barrier dams needed to preserve Gatun Lake.
The distance of Route 10 from the metropolitan centers of Panama City and Colon is a
slight military advantage, but continued use of existing Zone facilities in support of a canal
on Route 10 would leave many facilities and canal personnel in the same location regardless
of the choice of Route 10 or Route 14.
The major military advantages of Route 10 over Route 14 are that construction on
Route 10 would avoid the long period of vulnerability of the existing canal during
construction of a sea-level canal adjacent to it on Route 14, and the additional capacity and
safety offered by the continued availability of the old canal after a new one is opened on
Route 10.
Route 10 Sea-Level Canal Operated in Combination with the Existing Lock Canal as
One System
The present canal would continue in operation during the construction period of any
sea-level canal. When the sea-level canal is opened, the existing canal would be needed to
provide an emergency alternative until the new canal had been operated for a period of
years, its capabilities proved, and there was reasonable certainty that it would not be
seriously affected by slides. The Commission has been advised by its Technical Associates
for Geology, Slope Stability, and Foundations that 10 years is a minimum period for this
purpose. It would be desirable also to maintain it on a standby basis for an extended period
thereafter.
The existing canal with improvements short of additional locks has, as previously been
indicated, a potential annual transit capacity of 26,800 ships of all sizes below 65,000 DWT.
86
Farmland on southern portion of Route 10
FIGURE 41
In the mix of ships projected for Isthmian canal traffic in the year 2000 and thereafter,
more than 85 per cent of the total continues to be in these smaller sizes. Although the
combined capacities of the old canal and a sea-level canal on Route 10 are not likely to be
needed in this century, it would be unwise for the United States to commit itself to discard
the old canal permanently until the lack of ultimate need for it was certain.
There are no unique engineering problems in maintaining the lock canal on a standby
basis. The cost of operating it on a one-shift basis after a new canal is opened is estimated to
be approximately $4 million a year. This amount would provide for personnel for
maintenance and operation, dual training of sea-level canal operating personnel for lock
canal operations in an emergency, and periodic channel dredging. When no longer needed,
maintaining it on a non-operating standby status is estimated to cost $1 million a year.
Integration of the operation of a new canal on Route 10 with operation of the existing
canal would have great advantages over operation of a canal on Route 10 as a separate
entity.
If a new treaty should authorize such a system, all feasible alternatives for providing
canal capacity greater than now existing would be available. Initial expansion could be
accomplished by adding lock lanes to the existing canal or by building a sea-level canal on
Route 10. Subsequent needs in excess of the minimum capacity of the sea-level canal could
be met in three different ways:
87
_
Reactivating the existing lock canal,
2. Providing a bypass on Route 10, and
3. Constructing a second sea-level channel either along Route 10 or generally along
the trace of the existing canal (Route 14).
Reactivating the lock canal would permit a total of at least 60,000 annual transits;
addition of a bypass to the sea-level channel on Route 10 would permit approximately
56,000 annual transits; Route 10 with a bypass in combination with the existing lock canal
would permit at least 80,000 annual transits; a second sea-level channel would permit well in
excess of 100,000 annual transits.
This flexibility in future canal possibilities, providing as it would maximum transits and
other economic benefits, would be as advantageous to Panama as to the United States. Such
a system should be welcomed also by all canal-using nations as indicative of the intent of the
United States and Panama to ensure adequate canal capacity indefinitely.
The Stanford Research Institute’s evaluations of the economic impacts of various
sea-level canals showed that the combined operation of the old and new canals would be the
most beneficial to Panama of all the plans considered. Appropriate Canal Zone facilities
would continue to be used by the canal system operating authorities to administer and
support canal-system operations and the Canal Zone military bases would continue in
essentially the present status for defense. In addition, however, maintenance of the old canal
in service, or even on a standby status, would create, directly and indirectly, more jobs for
Panamanians than would a sea-level canal on Route 10 alone and would generate greater
foreign exchange earnings for Panama.
Adoption of the system concept would not foreclose relinquishment to Panama of
excess Canal Zone properties such as contemplated in the 1967 draft treaties. Zone water
resources, unneeded facilities, and excess land areas that could be made available to Panama
were a sea-level canal operated alone on Route 10, would be almost equally available were
the channels and locks of the existing canal maintained for reactivation when needed.
The defense advantages of a sea-level canal on Route 10 have been discussed above.
These advantages would be somewhat greater in the canal system as envisioned because the
present canal would be useful if the sea-level canal were blocked. Defense of the standby
canal should cause no major additional problems. The existing military bases are already
suitably sited, and the forces planned for the defense of Route 10 could, with acceptable
risks, provide protection for the standby facilities. In periods of increased tension, defense
forces could be augmented as necessary.
88
CHAPTER VIII
FINANCIAL FEASIBILITY
The financial feasibility of the sea-level Isthmian Canal is dependent on a number of
variables, none of which can with confidence be assigned a value. The Commission had to
consider a range of values for some and make reasonable assumptions for others as described
in this Chapter. Detailed discussions of these matters and financial analyses of sea-level canal
arrangements and the third-locks alternative are contained in Annex III, Study of Canal
Finance. The discussion in this Chapter is directed primarily to the financial feasibility of
construction of a sea-level canal on Route 10 that would be operated in conjunction with
the existing Panama Canal as a single system.
Considerations for Financial Analyses
Revenues
Revenues expected from tolls on a sea-level canal at current toll rates and the maximum
potential under an increased toll schedule are summarized in Table 18:
TABLE 18
FORECASTS OF SEA-LEVEL CANAL REVENUES
Millions of Dollars
Potential Tonnage Low Growth
Forecast Forecast
Current Maximum Current Maximum
Fiscal Year Tolls Tolls Tolls Tolls
Costs of Operations
The Panama Canal Company and Canal Zone Government now conduct many
revenue-producing activities not directly connected with operating and maintaining the
canal. The costs of these operations taken together approximately equal their total revenues.
Government functions, such as police and education, are financed from general revenues.
89
In estimating the operating costs of a sea-level canal, the Commission included only
those activities directly associated with canal operation and maintenance, including
administrative overhead. Commercial and government activities were assumed to be neither
a cost nor a source of revenue in sea-level canal operations.
Payment to Host Country
The unratified 1967 draft of a treaty with Panama for the continued operation of the
present canal would have replaced the 1955 Treaty provision for a fixed $1,930,000 annuity
to Panama with royalty payments for each long ton of cargo transported through the canal.
The draft suggested that the royalty payment start at 17 cents per long ton of cargo and rise
1 cent annually for 5 years to 22 cents per long ton, at which level it would remain. This
1967 plan has recently been rejected by Panama and is in no way binding upon the United
States. The Commission, however, used, for purposes of comparison, the suggested royalty
payments as one possible compensation arrangement in estimating the total cost of
operating a sea-level canal in Panama.
The level of host-country compensation that might be required for a canal in Colombia
cannot be established until the United States is prepared to discuss detailed canal treaty
terms with the government of that country. Meaningful estimates of the operating revenues
of a sea-level canal in Colombia require assumptions as to what use would be made of the
existing canal subsequent to the opening of the new canal. The Commission could find no
basis for such assumptions and hence was unable to make a financial analysis of a sea-level
canal on Route 25, except to recognize that competition by the existing Panama Canal
could make it impossible for the new canal to meet operating costs and debt service charges
from revenues.
Inflation
The inflation of costs over time is an established trend that cannot be disregarded in
financial analyses of prospective sea-level canals. Maintenance of the Panama Canal tolls at
the same dollar level for more than a half a century was made possible only by political
decisions that reduced costs funded from tolls. Similar decisions could be made in financing
a new canal, but they were not assumed in developing the financial analyses in Annex III,
Study of Canal Finance.
A self-amortizing sea-level canal would require provisions in its financial plan to
compensate for the effects of inflation. However, reliable estimates of the effects of
inflation on costs and revenues for a 75-year period into the future are not possible;
attempting to incorporate them would not add to the validity of the financial analyses. The
conclusion was reached in the evaluation of the toll revenue potential of a sea-level canal in
Annex IV, Study of Interoceanic and Intercoastal Shipping, that costs of alternatives to
using the canal will tend to increase in parallel with increases in canal costs, and tolls could
be increased in proportion without discouraging traffic growth materially. Therefore, the
assumption was made that future tolls would be increased periodically in proportion to
inflation of costs. All estimated costs and revenues, therefore, are stated in 1970 dollars.
Construction and Amortization Periods
Estimated construction periods vary only slightly among canal routes, but estimates of
the time required for negotiations with the host country and the passage of appropriate
90
legislation can only be approximations. The Commission has assumed that the time from the
date of decision to construct a sea-level canal to the date of its opening would be 15 years,
regardless of the route chosen.
The 1967 draft treaties with Panama suggested 60 years of United States control of a
sea-level canal after its opening. Inasmuch as a longer period would not materially change
amortization prospects, the Commission selected 60 years as an appropriate period for
financial analyses.
Interest Rates
The discount rate on the investment in a new sea-level canal will be a major determinant
of its financial feasibility. The interest on the debt of the present canal to the United States
Treasury is assessed at the average rate of all of its outstanding debt, computed for Fiscal
Year 1969 to be 3.69 per cent per annum. In Fiscal Year 1970 the interest rate used in
analyzing federally financed water resources projects was 5.5 per cent. At the time of
preparation of this report, however, long-term United States Government bonds were selling
in the open market at yields in the neighborhood of 7 per cent. The Study of Canal Finance
(Annex III) suggests no basis for an early decline in interest rates, although the current rate
is historically high. The Commission considers 6 per cent per annum to be a reasonable
estimate of minimum long-term financing costs of sea-level canal investments that would be
spread over a 15-year period. However, the effects of a range of interest rates up to 12 per
cent are analyzed in Annex III.
Debt of the Panama Canal
Two assumptions were made regarding the interest-bearing debt to the United States
Treasury of the Panama Canal Company:
1. The debt would continue to be an obligation of a new canal operating authority
that controlled both the existing canal and a sea-level canal as a single system;
2. The debt would be written off if the sea-level canal operating authority did not
control the old canal and the new canal were operated as a separate entity.
Financial Analyses of Canal Alternatives
The annual rate of expenditure for construction of a sea-level canal should not
materially exceed $300 million in any year and would average about $200 million per year
over a 15-year construction period. These annual capital expenditures, together with interest
charges, could in some circumstances accumulate to a debt of such magnitude that
repayment from canal revenues would not be possible. Although self-amortization has not
been required of the present canal, the Commission’s financial analyses of the sea-level canal
alternatives were designed to determine what combinations of operating costs, payments to
the host country, interest rates, canal opening dates, traffic levels, and toll rates would
permit recovery of capital costs from toll revenues. These analyses also permit estimation of
the capital costs that might have to be written off for other objectives.
The financial prospects of sea-level canal alternatives were examined by the Interdepart-
mental Study Group on Canal Finance from two different viewpoints. One approach treated
the old and new canals as commercial enterprises to determine whether investment in the
91
new capacity could be justified economically solely by the additional business it could
generate. Investment in a sea-level canal cannot be justified on this basis.
The second approach, that considered by the Commission to be the appropriate one,
was to determine whether a sea-level canal could be operated on a self-amortizing basis by
crediting it with total revenues rather than only those in excess of what might be produced
by the existing canal. Analyses also were made of the amortization prospects of a third lane
of locks for the existing canal. The results of these analyses are summarized in Table 19 for
three alternatives: Route 15 — Lock Canal; Route 10 — Sea-Level Canal as a separate entity;
and Route 10 operated as a system in conjunction with the present canal. The analyses of
Route 10 as part of a system are set forth for two conditions: changes in toll rates being
made at the time the canal goes into operation, and as of the time construction is started.
In each case, the annual costs of operation were taken to be those set forth in Annex V,
Study of Engineering Feasibility, and allowance was made for payments to Panama of $0.22
per cargo ton in 1976 and thereafter during the period required for amortization of the
capital costs. It was also assumed in each case that all capital costs and interest charges
would be amortized from toll revenues.
It was further assumed in the financial analyses of the combination of a sea-level canal
on Route 10 and the existing lock canal that the current debt of the Panama Canal
Company would also be amortized from toll revenues of this system.
The effects of possible modifications of these assumptions are discussed near the end of
this Chapter.
If the sea-level canal on Route 10 were operated as a unit of a system including the
Panama Canal, the prospects of amortization would be improved greatly. For example:
1. If the interest rate were 6 per cent and the opening date of the canal were deferred
until 1995, no increase in tolls above the present level would be necessary,
provided the potential growth of traffic were realized;
2. If traffic were to grow at the low rate, and the average toll were raised to $1.20 per
ton with the interest on the debt at 6 per cent per annum, it would only be
necessary to defer opening the canal until 2000.
The foregoing analyses of the requirements for amortization have all been based on
canal tolls being held at an average of $0.884 per cargo ton until the opening date of a new
canal. If, on the other hand, canal tolls should be held at this level only until start of new
construction of a canal on Route 10, the requisite average level of tolls would be reduced
materially below those required under the previous assumption. Thus:
1. If the potential growth of traffic were to be realized, and the interest rate were 6
per cent per annum, the average toll would have to be only $0.94 per ton if the
new canal were opened in 1990;
2. If the opening of the canal were deferred until 1995, no increase above the present
level should be necessary under these conditions.
However, if only the low traffic growth rate should be realized, some increase in the
average toll would be necessary under any likely combination of interest rates and times of
opening of the canal. For example:
1. If Route 10 were completed in 1990 and operated as part of a system and tolls
were increased when construction was initiated, the average required toll would be
$1.19 per ton;
92
TABLE 19
AVERAGE TOLL REVENUES PER LONG TON OF CARGO REQUIRED
FOR AMORTIZATION OF CAPITAL COST IN 60 YEARS
WHILE PAYING PANAMA A ROYALTY OF $0.22 ON EACH TON
Traffic Canal
Growth Opening
Canal Route Rate Date 4% 5% 6% 7% 8%
Average Annual Interest on Debt
Route 15
New Locks Potential
$1.53 Billion (1)
Capital cost
Annex III
Figure A1-24
Route 10
Sea-Level Potential
by itself (1)
$2.88 Billion
Annex III
Figure A1-1
Route 10
Sea-Level with | Potential
Panama Canal
$2.88 Billion
Annex III
Figure A1-2
Route 10
Sea-Level with | Potential
Panama Canal (2)
$2.88 Billion
Annex III
Figure A1-3
(1) Canal tolls held at $0.884 per ton until canal opening date.
(2) Canal tolls held at $0.884 per ton until start of new construction.
(a) Required tolls exceed an average of $1.30 per ton, the rate estimated to produce
the maximum revenue from tolls.
93
2. If the opening date were deferred until 1995, the required toll would be $1.11 per
ton;
3. If the opening were deferred until 2000, the required toll would be $1.03 per ton.
Some of the data given in Table 19 are also shown graphically in Figures 42a, 42b, 43a,
and 43b, taken from Annex III, Study of Canal Finance.
It follows that, from a financial point of view, construction and operation of a sea-level
canal on Route 10 in conjunction with the Panama Canal would be preferable to
construction and operation of a sea-level canal on Route 10 as a separate entity; further, the
prospects of amortization of the capital cost would be enhanced by appropriate increases in
average toll revenues at the time of initiation of construction of a canal on Route 10.
Table 19 does not show the tolls required if a sea-level canal were built on Route 14,
but the values for a sea-level canal on Route 10 operated as a separate entity are
representative of the tolls that would have to be levied if the canal were built on Route 14.
The capital cost of the latter is only slightly greater than the capital cost for a canal on
Route 10.
It is also apparent from a financial standpoint that deferment of construction of any
new canal would be desirable, because such deferment would permit the payment of either a
higher rate of interest on the debt or a lower average level of tolls and still enable the capital
costs to be amortized in the first 60 years of operation of any new canal.
Cash Flow
Irrespective of the route or means that may be taken to provide for increases in traffic
between the oceans, there will be a period during construction when the expenditures
required will exceed all available revenues. Hence, at the end of the construction period a
substantial debt will have been accumulated. Thereafter, there will be further accumulations
of debt to the extent that the gross revenues from tolls are less than all costs of operation,
payments to the host country, and interest on the then existing debt. There will thus be a
net cash input until the revenues from tolls becomes sufficiently large to permit progressive
amortization of the peak debt.
The results of the calculations of the magnitude of the “peak debt†under different
conditions are shown in Table 20 for the case of a sea-level canal on Route 10 operated in
conjunction with the existing lock canal. The basic assumptions were again made that
payments to Panama would be at the rate of $0.22 per cargo ton and that all capital costs
and interest charges would be amortized from toll revenues. The variables in this tabulation
are the canal opening dates, the potential and the low rates of traffic growth described in
Chapter III, and a range of average toll rates per cargo ton. The toll rates in this tabulation
have been considered only as being in effect from the start of construction of a sea-level
canal on Route 10.
The peak debt arising out of construction of any other canal, or as influenced by any
other date or change from existing toll levels, differs from the values in this tabulation, but
the changes would be generally proportional. An interest rate of 6 per cent was used to
derive the values in Table 20; if some other rate of interest were used, the changes would
also be proportional.
It follows from these data that, from a financial point of view, it would be desirable to
defer construction of a new canal as long as practicable. For example: assuming an average
94
Maximum
eveOUe FIGURE 42a
level ——— > 1.30
1.20
55
2 -
ge
5 S 1.00
fo
oO
Current 5e
ons
level —3eZFo
qa.
a
oo
Not
=o
joke 0.80
Potential tonnage
Projection
0.60 =
1990 2000 2010
Maximum Sea-level canal opening date
revenue FIGURE 42b
level ys «1.30
1.20
1.00
Current
level —y—
of operation, $ per cargo ton
0.80
Toll for payout after 60 years
Low tonnage
Projection
0.60
1990 2000 2010
Sea-level canal opening date
NOTES:
1. Canal financing assumed an extension of that of the Panama Canal with
a 1970 debt of $317 million.
. Toll of $0.884 per cargo ton assumed until canal construction is started.
. Panama Canal assumed on standby for ten years, and then in mothballs.
. Route 10 cost is $2.88 billion.
. Royalty reaches $0.22 in 1976.
ROUTE 10 TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE 42
aOPRhWNh
95
Maximum
revenue
level ——>> 1.30
c
3
=
°
Current a
level) ——a>8
&
4
3
Ee
1.20
1.00
0.88
sd
©
6
0.60
1.6
2.0 2.4 28 A 3.2
Project cost, $ billions
NOTES: Cost of recommended
1,
2. Royalty reaches $0.22 in 1976.
3. Sea-level canal opens in 1990.
4.
5
6
~
Route 10 construction schedule is assumed. channel configuration
Payout is in 2050.
. Potential tonnage and 25% freighter cargo mix are assumed.
. Canal financing assumed an extension of that of Panama
Canal with a 1970 debt of $317 million.
. Tolls of $0.884 per cargo ton assumed until
sea-level canal construction is started.
. Panama Canal assumed on standby for ten years
and then in mothballs.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE 43a
96
Maximum
revenue
level >
Current
level) —>
cargo ton
Toll, $ per
9
0
3
1.30
1.20
1.00
0.88
0.60
1.6 2.0 2.4 2.8 A 3.2
Project cost, $ billions
Cost of recommended
NOTES:
channel configuration
Route 10 construction schedule is assumed.
. Royalty reaches $0.22 per cargo ton in 1976.
. Sea-level canal is opened in 1990.
. Payout is in 2050.
Low tonnage and 46% freighter cargo mix are assumed.
. Canal financing assumed an extension of that of the Panama Canal with a 1970 debt of $317 million.
. Toll of $0.884 per cargo ton assumed until sea-level canal construction is started.
. Panama Canal assumed on standby for ten years and then in mothballs.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE 43b
97
TABLE 20
ESTIMATED PEAK DEBT AT 6 PER CENT FOR CONSTRUCTION OF
SEA-LEVEL CANAL ON ROUTE 10 OPERATED IN CONJUNCTION
WITH THE PANAMA CANAL
Low Traffic Growth Potential Traffic
Average Toll Per Canal Opening Date Canal Opening Date
Long Ton of Cargo 1990 1995 2000 1990 1995 2000
Not Possible to Amortize Within
60 Years of Operation
3.6 2.6 3.9
2.7 22 3.3
2.3 i 2.9
Debt shown in billions of dollars.
Toll rates assumed effective 15 years ahead of opening date.
Initial construction cost: $2.88 billion.
Royalty payments at 22 cents per ton.
Operating costs per estimates in Annex V.
toll of $1.00 per cargo ton, interest at 6 per cent, and realization of potential traffic
revenues, the tabulation shows that in the first 10 years the peak debt would be reduced an
average of $250 million for each year of deferment beyond 1990.
Modified Premises
All of the calculations of requisite tolls in Table 19 and of the peak debt in Table 20
were based on two premises: payments to the host country would be 22 cents per cargo ton
after 1975, and all of the capital costs would be amortized with interest within 60 years
after the opening date of a new canal. Any modification of these would have an effect on
the tolls that would have to be collected and on the magnitude of the peak debt that would
accrue.
The royalty to be paid Panama could be at a different rate per cargo ton or the
payments could be computed on a different basis. Hence, in preparation of Figure 44, the
assumed amount of 22 cents per cargo ton has been eliminated in order to show the average
toll that would produce the revenues needed to cover all costs of operation and to amortize
the capital cost.
If a sea-level canal on Route 10 were built to open in 1990 and the potential traffic
forecast were experienced, there would be full recovery of the $2.88 billion capital cost in
98
60 years at 6 per cent interest, provided tolls were raised at the start of construction (1975)
to an average 96 cents per cargo ton (74 cents plus royalty payments to Panama of 22 cents
per ton). (Point 1, Figure 44). On the other hand, should the traffic growth follow the low
estimate of the Shipping Study Group only $1.67 billion of the capital cost could be
amortized at the same toll rate. (Point 2, Figure 44). Under this condition, $1.21 billion of
the capital cost could not be amortized. This is one measure of the degree of risk.
Amortization of all capital costs from toll revenues places all of the burden of
amortization on canal users. There could be foreign policy or defense judgments that some
of this burden should be shifted by Federal contributions in aid of construction. In the
example just cited, this would amount to the write-off of $1.21 billion as non-reimbursable.
If only one-half of this amount were deemed properly non-reimbursable, and if no higher
level of tolls were practicable, amortization of the remaining capital cost ($2.28 billion)
would require that the payment to Panama be approximately 10 cents per cargo ton (96
cents minus 86 cents, Point 3, Figure 44).
Thus, if a decision or a commitment were made to complete a sea-level canal on Route
10 in 1990, tolls would have to be raised under either traffic assumption to avoid capital
write-offs, and substantially in the event the low traffic growth should be experienced. A
start of operation in 1990 carries the attendant risk of the need to subsidize the
construction with sizeable capital write-offs. Lesser payments to the host country, especially
in the early years, would help to lessen the amount.
Source of Funds
It is apparent from the Study of Canal Finance, Annex III, that the risks and
uncertainties of sea-level canal finance are such that private funding of construction costs
would not be feasible. The Commission concluded that responsibility for construction and
operation of a sea-level canal should be vested in an independent agency of the United
States Government and that construction be financed through appropriations by the
Congress. The financial burden on the United States might be reduced by international
participation. The prospects of obtaining such participation are discussed in the following
chapter.
99
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100
CHAPTER IX
MANAGEMENT OF SEA-LEVEL CANAL CONSTRUCTION AND
OPERATION
During the past twenty-five years, especially in periods of difficult United States-
Panamanian relations, prominent political leaders in the United States have suggested that
the Panama Canal be internationalized or inter-Americanized. They have suggested that an
international management authority would mitigate the anti-United States sentiment in
Panama that stems from our unilateral control of the Canal Zone and all operations within
ts
The Commission believes that international participation in the operation of the present
lock canal and in the financing and operation of a new sea-level canal under new treaty
arrangements mutually acceptable to the United States and Panama could eliminate many of
the important obstacles to harmonious relations and thus facilitate long-term protection of
the huge investment in the canal enterprise. In Latin America generally, such an
arrangement could be welcomed as a move toward adjusting United States national interests
to the cooperative goals of the inter-American system.
The cost of a new sea-level canal is so large and amortization of the debt is sufficiently
problematic that it is in the interest of the United States to obtain international financial
support for the enterprise. Prospects for attaining the cooperation of a substantial number
of canal users are not bright, however. An Isthmian canal is of marginal importance to the
larger nations that now use the canal, with the possible exception of Japan. If additional
canal capacity were not provided in the future, all could use alternate routes. Since they no
doubt believe that the predominant United States economic and military interests are such
that an adequate Isthmian crossing will be built and maintained without their participation,
they are likely to conclude that they can avoid financial and management responsibilities, as
well as the foreign policy problems that might arise from time to time. The Pacific Coast
nations of South and Central America, while greatly dependent on an efficient Isthmian
crossing, are not in a position to make significant contributions to canal construction.
Panama has historically resisted multi-national participation. Despite the discouraging
obstacles, however, internationalization should continue to be a goal of the United States,
but not an inflexible condition of our canal policy.
Management of Construction
Useful lessons can be drawn from the mistakes and successes of the three successive
Isthmian Canal Commissions appointed between 1904 and 1914 to build the present canal.
The management problems that initially plagued the builders of the Panama Canal stemmed
in part from lack of clear lines of authority between the President, the Commission, the
Chief Engineer, and the operating forces on the Isthmus. Operations were handicapped by
slow communications between the Commission in the United States and the operating
forces in Panama and the Commission’s failure to delegate to its Chief Engineer the power
101
of decision on relatively small matters. The final and effective solution adopted by President
Theodore Roosevelt was to appoint the same individual to the positions of Commission
Chairman and Chief Engineer.
There was also controversy over the merits of government-force construction versus
construction by private contractors. The Chairman/Chief Engineer, John F. Stevens, created
an effective construction force and saw no need to execute the project through contractors
as desired by the President. His resignation before this issue was resolved led to the
appointment of Colonel George Washington Goethals of the United States Army Engineers
as Chairman and Chief Engineer. Colonel Goethals, however, found Stevens’ organization
thoroughly satisfactory and executed his plans relatively unchanged without resort to
contracting. Although Goethals and a number of his key subordinates were Army Engineers,
the organization that built the Panama Canal remained to the end an autonomous civilian
agency of the Executive. Responsibility for its supervision at the Washington level was
delegated to the Secretary of War. Although never required by legislation, this practice
continues today in the operation of the Panama Canal.
Advances in the fields of engineering, sanitation, transportation, and communications
since Stevens and Goethals’ time make canal building a different problem today. Private
construction contractors, separately or as joint ventures, now have the capabilities to build
very large projects. United States Government construction agencies have demonstrated in
peace and war the ability to manage large construction projects anywhere in the world. The
speed of modern transportation and communications makes insignificant the distance
between Washington and the Isthmus.
The major factors to be considered are:
— The construction agency would function over a period of 15 years or longer.
— The primary functions of the agency would be engineering design, management of
construction, and at the national level, coordination of the interests of all
government agencies concerned.
— Some form of host-country participation in the management agency seems
essential. Any construction of the magnitude of a sea-level canal could have major
impacts on the economy of the host country and on its relations with the United
States. Multi-national financing of construction, if undertaken, would entail further
obligations for international participation.
— Regardless of the management scheme employed, it is essential that flexibility be
allowed for the award of construction contracts for major units of the work.
— The construction agency should have the exemptions from taxation, import duties,
and employment restrictions needed to conduct its activities with the maximum
efficiency and at the minimum cost to the United States.
In the absence of major contributions by other nations in financing sea-level canal
construction, it is obvious that construction could be financed only by the United States
Government. In this event, it would be essential that construction be managed by an agency
of the Executive subject to the appropriation processes of the Congress. The logical choices
of management agencies for sea-level canal construction are two:
— An autonomous agency such as was used for the first canal.
— The Department of the Army, working through the United States Army Corps of
Engineers.
102
An autonomous agency with no other mission would be preferable. The canal project
would be only one of many for the Corps of Engineers.
The national and international interests in a sea-level Isthmian canal are such that no
single United States Government department or other national agency has a dominant
interest. An autonomous agency would be the most practical arrangement for bringing
together the skills needed for the direction of so great a project without assigning
disproportionate responsibilities to an existing agency with other important missions to
perform. It would facilitate the participation of private citizens and would lend itself to
foreign participation, if desired. The exact membership of the directing authority at the
national level would be influenced by the treaty terms and financial arrangements finally
agreed upon for a new canal. Its membership should be limited in number with provision for
advisory participation by representatives of the Departments of Defense and State, the host
country government, and the operating authority of the present canal.
Management of Canal Operations
The management organization for operation of a sea-level canal in Panama, either alone
or as part of a canal system that included the existing canal, would inevitably evolve from
the existing canal operating authority. The Commission did not develop recommendations
for the organization of this new authority. Its responsibilities, functions, and methods of
operation will depend upon treaty arrangements yet to be negotiated and, thereafter, ona
choice of alternatives.
Advance Planning
The feasibility of constructing a sea-level Isthmian canal by the United States alone or
in cooperation with other nations cannot be finally determined in the absence of agreement
on treaties for both the old and new canals. Without a suitable treaty insuring the continued
protection of its interests, the United States cannot undertake construction of a new canal
or underwrite its construction. Without a treaty, there is no basis upon which the President
can propose canal construction legislation to the Congress.
Pending the establishment of suitable treaty conditions, planning for the management
of construction and operation of a new canal should be temporarily deferred. The earliest
date that greater canal capacity might be needed is approximately 1990, and need at that
date is not expected to be critical. With a planning and construction lead time of 15 years,
the earliest date at which decision might be needed is 1975. If canal traffic continues to
grow as forecast, and if suitable treaty arrangements have been negotiated and ratified, the
President should at that time, or as soon thereafter as he deems appropriate, consider
proposing sea-level canal construction legislation to the Congress.
103
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CHAPTER X
CONCLUSIONS AND RECOMMENDATIONS
A sea-level canal across the American Isthmus has been sought for more than four
centuries, and all who have participated — the Spanish, the French, and the American
builders of the present lock canal — remained convinced that a sea-level canal ultimately
should be constructed. The canal studies in 1947, 1960, and 1964 arrived at the same
conclusion but counseled interim measures and postponement of construction.
Today there are no technical obstacles of sufficient magnitude to prevent successful
construction and operation of a sea-level canal. Determination of its feasibility must be a
judgment of values, many of which are unquantifiable. The political, economic, and military
advantages for the United States, the Western Hemisphere, and the world in an adequate and
secure Isthmian canal cannot be measured precisely. A weighing of estimated costs against
estimated revenue is only one measure, and a tenuous one at best. The most critical
elements — the treaty arrangements for canal construction, operation, and defense — remain
to be established. Nevertheless, the Commission believes that the essential treaty conditions
are apparent, and on the basis of the many considerations discussed in this report and its
annexes, it has reached the following conclusions and recommendations:
Conclusions
1. The United States, as the major Western Hemisphere power has the responsibility
of insuring the continued availability of an adequate and secure Isthmian canal
operated on a neutral and equitable basis. This obligation is recognized in United
States treaty agreements with the United Kingdom, Panama, and Colombia.
2. The Panama Canal is of major importance to the defense of the United States. The
United States should retain an absolute right to defend the present canal and any
new Isthmian canal system for the foreseeable future.
3. An adequate Isthmian canal is of great economic value to many nations, but
especially to the United States since approximately 70 per cent of the tonnage
through the canal in recent years has been to, from, or between United States
ports. This relationship is expected to continue.
4. The size limitations of the existing Panama Canal impose constraints upon the use
of bulk carriers on canal routes. The worldwide trend to larger ships for movements
of bulk commodities will make these constraints of increasing economic signi-
ficance to United States and world trade as time passes.
5. The potential demand for annual transits of ships of the size that can pass through
the present canal probably will exceed its estimated maximum capacity of 26,800
annual transits during the last decade of this century. Saturation of the existing
canal will impose difficult but not necessarily intolerable constraints on world
shipping. If greater canal capacity for both numbers of transits and larger ships is
not provided, potential traffic increasingly will be diverted to larger ships on
105
10.
ilps
13.
alternate routes and to other transportation modes. Provision of additional canal
capacity would be advantageous to the continued growth of United States and
world trade.
Initial construction of additional canal capacity should provide for handling ships
up to 150,000 DWT. New locks designed for such ships would have no greater size
capacity, but a sea-level canal that could accommodate 150,000 DWT ships
routinely could accommodate 250,000 DWT ships under controlled conditions.
The new capacity that should be provided initially is 35,000 annual transits. Any
plan adopted should not preclude progressive expansion to double or even triple
this capacity.
A total canal capacity of at least 35,000 annual transits could be provided by
constructing a third lane of locks for the present canal. This would be a temporary
solution without significant military advantages, and it would not relieve the
problems in United States-Panamanian relations that derive from the personnel and
defense requirements of the lock canal. The augmented capacity could be exceeded
by demand for transits soon after the new locks were built. Locks capable of
accommodating ships of 150,000 DWT would cost more than three-fifths as much
as a sea-level canal of far greater capacity and would not be capable of transiting
the Navy’s angle-deck aircraft carriers. Additional locks would also increase the
operating costs of the canal far above those of a sea-level canal.
A sea-level canal would provide a significant improvement in the ability of an
Isthmian waterway to support military operations both in its lessened vulnerability
to interruption by hostile action and in its ability to transit large aircraft carriers
that cannot now pass through the Panama Canal. These military advantages of a
sea-level canal, together with its capacity to meet the potential demand for transits
over a much longer period, and its lesser operating costs, would more than
counter-balance the lower construction cost of augmenting the existing canal with
larger locks.
The technical feasibility of the use of nuclear explosives for sea-level canal
excavation has not been established. Whether the technology can be perfected and
the international treaty obstacles to its use removed are not now predictable.
Removal of the technical and treaty obstacles to employment of nuclear
excavation would still leave major political and economic obstacles to a sea-level
canal remote from Panama’s population centers. A sea-level canal on Route 17,
excavated wholly or in part by nuclear explosions, is currently infeasible for
manifold reasons and probably will remain so, regardless of the establishment of
technical feasibility of nuclear excavation. A sea-level canal excavated partially by
nuclear methods on Route 25 in Colombia might someday be politically acceptable
if proved technically feasible.
A sea-level canal in Panama constructed by conventional excavation either on
Route 10 or Route 14 is technically feasible.
Route 10 is the most advantageous sea-level canal route.
Although available evidence indicates that the tidal currents expected in a sea-level
canal without tidal control structures could be navigated safely by most ships, tidal
gates could increase navigation safety and should be provided.
106
14.
15.
16.
17.
20.
21.
A conventionally excavated sea-level canal on Route 10 with tidal gates, capable of
accommodating at least 35,000 transits each year of representative mixes of ships
of the world fleet up to 150,000 DWT, would cost $2.88 billion to construct at
1970 prices.
The costs and revenues of a future sea-level canal cannot be forecast reliably over
the 75-year period that might be needed for its construction and amortization.
Among the critical factors are the cost of money and the stability of the value of
money. If the old and new canals were financially integrated at initiation of new
construction, and if the most favorable forecast developments in construction
costs, revenues, and interest rates were realized, a sea-level canal opening in 1990
could be financed through tolls while paying reasonable royalties to Panama. Less
favorable developments in future costs and revenues which are possible during the
period would make amortization through tolls impracticable. Amortization could
require toll increases over the present Panama Canal levels as well as additional
periodic increases to compensate for inflation of future costs. Low interest rates or
low royalties would facilitate financing larger investments and permit lower tolls.
Conversely, high interest rates, high royalties, or tolls lower than economically
justified would reduce the construction investment that might be amortized from
tolls.
A variable pricing system for tolls designed to meet the competition of alternatives
to the canal would attract the most traffic and generate the greatest revenues in a
future canal of any type, lock or sea-level.
Assurance of recovery of the United States investment is desirable, but need not be
the sole determinant of United States canal policy. The decision to build or not to
build a sea-level canal should also take into account economic, political, and
military factors.
Although true internationalization of a future sea-level Isthmian canal does not
appear to be attainable, multi-national participation in its financing and manage-
ment could be financially and politically advantageous. The United States should
seek such participation within a bi-national treaty with Panama, but not make
future United States canal policy dependent upon its attainment.
United States relations with Panama could be improved by progressive reduction of
the number of United States personnel in the canal operating authority and a
concomitant increase in the proportion of Panamanian personnel in the positions
normally occupied by United States citizens. Construction of a sea-level canal
would facilitate reduction of the United States presence in that it could be
operated and defended with fewer total personnel.
Construction of a sea-level canal on Route 10 or Route 14 would create great
economic benefits for Panama. Of the alternatives considered, the greatest benefits
in added employment and foreign exchange earnings for Panama would be derived
from construction of a sea-level canal on Route 10 and operating it together with
the existing canal as a single system.
United States canal objectives and enduring tranquil relations with Panama are
most likely of attainment under a treaty arrangement which gives Panama a greater
role in the canal enterprise than at present and justifiable economic benefits from
107
canal activities, but the United States should retain effective control of canal
Operations.
22. So far as the Commission is able to determine on the basis of limited studies,
linking the oceans at sea-level would not endanger commercial or sport fish on
either side of the American Isthmus. No significant physical changes to the
environment appear probable outside the immediate areas of excavation and spoil
disposal. Tidal gates could be used to eliminate substantially the flow of water
between the oceans, and the water between the gates would have incidental
temperature and salinity differences from either ocean that would constitute a
limited barrier to transfer of marine life. A definitive and reliable prediction of all
ecological effects of a sea-level canal is not possible. The potential for transfer of
harmful biota and hybridization or displacment of species in both oceans exists but
the risks involved appear to be acceptable. Long-term studies starting before
construction is initiated and continuing many years beyond the opening of a
sea-level canal would be required to measure ecological effects.
23. A decision to construct a sea-level canal should allow for planning and construction
lead time of approximately 15 years to meet the projected date of need, which can
be fixed with increasing confidence as it draws nearer. Other factors, however,
including the treaty terms with Panama that are ultimately negotiated and ratified,
as well as the national priorities for Federal financing then existing, should be the
final determinants of whether the President should propose sea-level canal
legislation to the Congress.
24. Construction of a sea-level canal, if financed principally by the United States,
should be planned and carried out under the direction of an autonomous authority
of the United States Government.
Recommendations
The Atlantic-Pacific Interoceanic Canal Study Commission* recommends that:
1. Any new canal treaty arrangement with the Republic of Panama provide for:
a. Creation of an Isthmian canal system including both the existing Panama Canal
and a sea-level canal on Route 10, operated and defended in an equitable and
mutually acceptable relationship between the United States and Panama.
b. Canal operating and defense areas that include both the existing Panama Canal
and Route 10.
c. Effective control of canal operations and right of defense of the canal system
and canal areas by the United States, with such provisions for Panamanian
participation as are determined by negotiation to be mutually acceptable and
consistent with other recommendations herein.
d. Acquisition of the Route 10 right-of-way by the canal system operating
authority as soon as practicable.
*Chairman Robert B. Anderson, because he is also Special Representative of the United States for United States-Panama
Relations, disassociated himself from Recommendation 1, which concerns new treaty arrangements with the Government
of Panama.
108
The canal system be operated to provide an equitable share of revenues and other
economic benefits for Panama consistent with efficiency of canal operations,
financial health of the enterprise, and maintenance of toll levels that permit
effective competition with alternatives to the canal.
Other nations be encouraged to participate in financing the canal system, if such
multi-national participation is acceptable to the Government of Panama.
Subject to the priority of more important national requirements at the time, the
United States initiate construction of a sea-level canal on Route 10 no later than 15
years in advance of the estimated saturation date of the present canal, now
projected to occur during the last decade of this century.
When the rights and obligations of the United States under new treaties with
Panama are established, the President reevaluate the need for and desirability of
additional canal capacity in the light of canal traffic and other developments
subsequent to 1970, and take such further steps in planning the construction of a
sea-level canal on Route 10 as are then deemed appropriate.
Modernization of the existing canal to provide its maximum potential transit
capacity be accomplished, but no additional locks be constructed.
The United States pursue development of the nuclear excavation technology, but
not postpone Isthmian canal policy decisions because of the possible establishment
of feasibility of nuclear excavation at some later date.
The following studies initiated in the course of the Commission’s investigation, if
not otherwise completed beforehand, be continued to completion by the control
authority of the new canal system if such an authority is established and the Route
10 right-of-way acquired:
a. Investigation of the subsurface geology of the proposed trace of Route 10 to
permit selection of the exact alinement for design purposes.
b. Investigation of slope stability applicable to Route 10 geologic conditions.
c. Investigation into the hydrodynamics of large ships moving through confined
waters with variable currents.
A permanent agency of the Executive be designated to support and coordinate
public and private research activities that could contribute to the evaluation of the
potential environmental effects of a sea-level canal, and if the decision is made to
initiate its construction, advise the President as to the organization for and funding
of such additional research as might be required to reach definitive conclusions.
109
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ENCLOSURE 1
COMMISSION AUTHORIZING LEGISLATION
111
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ENCLOSURE 1
COMMISSION AUTHORIZING LEGISLATION
Public Law 88-609, 88th Congress, S. 2701, September 22, 1964, 78 Stat. 990, as
amended by: Public Law 89-453, 89th Congress, S. 2469, June 17, 1965, 80 Stat. 203;
Public Law 90-244, 90th Congress, S. 1566, January 2, 1968, 81 Stat. 781; and, Public Law
90-359, 90th Congress, H.R. 15190, June 22, 1968, 82 Stat. 249:
AN ACT
To provide for an investigation and study to determine a site for the construction of a
sea level canal connecting the Atlantic and Pacific Oceans.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That the President is authorized to appoint a Commission
to be composed of five men from private life, to make a full and complete investigation and
study, including necessary on-site surveys, and considering national defense, foreign
relations, intercoastal shipping, interoceanic shipping, and such other matters as they may
determine to be important, for the purpose of determining the feasibility of, and the most
suitable site for, the construction of a sea level canal connecting the Atlantic and Pacific
Oceans; the best means of constructing such a canal, whether by conventional or nuclear
excavation, and the estimated cost thereof. The President shall designate as Chairman one of
the members of the Commission.
Sec.2. (a) In order to carry out the purposes of this Act, the Commission may—
(1) utilize the facilities of any department, agency or instrumentality of the
executive branch of the United States Government;
(2) employ services as authorized by section 15 of the Act of August 2, 1946 (5
U.S.C. 55a), at rates for individuals not in excess of $100 per diem;
(b) The members of the Commission, including the Chairman, shall receive
compensation at the rate of $100 per diem. The members of the Commission, including the
Chairman, shall receive travel expenses as authorized by law (5 U.S.C. 73b-2) for persons
employed intermittently.
Sec. 3. The Commission shall report to the President for transmittal to Congress on
July 31, 1965, with respect to its progress, and each year thereafter until the completion of
its duties. The President shall submit such recommendations to the Congress as he deems
advisable. The Commission shall continue until the President determines that its duties are
completed, but not later than December 1, 1970.
Sec. 4. There are hereby authorized to be appropriated without fiscal year limitation
such amounts as may be necessary to carry out the provisions of this act, not to exceed
$24,000,000.
113
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ENCLOSURE 2
REPORT OF THE
TECHNICAL ASSOCIATES FOR
GEOLOGY, SLOPE STABILITY AND FOUNDATIONS
115
TECHNICAL ASSOCIATES FOR GEOLOGY, SLOPE STABILITY
AND FOUNDATIONS
OF THE
ATLANTIC-PACIFIC INTEROCEANIC
CANAL STUDY COMMISSION
CONSULTING GEOLOGISTS CONSULTING ENGINEERS
FRANK A. NICKELL — San Mateo, Calif. ARTHUR CASAGRANDE — Cambridge, Mass.
ROGER RHOADES ~— San Francisco, Calif. PHILIP C. RUTLEDGE — New York, N.Y.
THOMAS F. THOMPSON -— Reno, Nevada
March 2, 1970
Mr. Robert B. Anderson, Chairman
Atlantic-Pacific Interoceanic Canal Study Commission
726 Jackson Place, N.W.
Washington, D.C. 20506
RE: COMPARISONS OF
INTEROCEANIC CANAL ROUTES
Dear Mr. Chairman:
The scope and organization of the following report result from discussions during the
meeting with Commissioners Hill and Fields in San Francisco on January 28 and 29, 1970.
It consists of two main sections, one concerned with Routes 17 and 25 that require nuclear
excavation and the other with Routes 10, 14C and 14S that would be constructed wholly
by conventional excavation. The concepts and conclusions have evolved from association
with the investigation since its beginning in 1965 and from continuous review of the
extensive investigations and reports of the Corps of Engineers’ study groups. Detailed
technical recommendations, which were reported to the Corps of Engineers periodically
during the study, are not repeated herein.
The comparisons between routes have been based on considerations of geology and
engineering related to design and construction of a canal, in light of the existing state of
knowledge of effects on slope stability, to result in an evaluation of the relative merits,
disadvantages, uncertainties and risks of routes for a sea-level interoceanic canal. In the first
main section Routes 17 and 25 are compared assuming feasibility of nuclear excavation and
the feasibility assumption is then considered. In the second section comparisons of
conventional excavation routes are made between Route 10 and Routes 14C and 14S and
then between the latter two routes within the Canal Zone.
117
ROUTES REQUIRING NUCLEAR EXCAVATION OVER
PORTIONS OF THEIR LENGTH
Routes 17 and 25 require nuclear excavation of very deep cuts through the
mountainous sections to make them economically feasible. These routes are first compared
in their entirety and then the feasibility of nuclear excavation for canal construction is
discussed. Assuming that nuclear excavation is feasible, comparison of Routes 17 and 25
logically divides itself into the mountainous sections requiring nuclear excavation, the
lower-lying sections excavated by conventional methods, and requirements for diversion of
flood waters.
(1) Mountainous Sections
The continental divide on Route 17 is near the Atlantic side and is near the Pacific on
Route 25. The highest elevations are roughly the same but the length of high elevation for
Route 25 is somewhat less. The geology and basic types of rocks are similar and will permit
relatively steep excavation slopes such as might be produced by nuclear blasting.
On Route 25 it seems possible for reasons of geology that nuclear excavation could be
extended farther to the east than shown on the construction plan, thereby reducing the
requirement for more costly conventional excavation.
On Route 17 there is a second high ground section near the Pacific entrance. This
presents two distinct disadvantages; first, the geologic structure of the Pacific highland is
more complicated than in the continental divide and the rocks are less competent, creating
some uncertainty as to stability of slopes produced by nuclear excavation; and second, the
two separated sections requiring nuclear excavation doubles the number of interfaces with
conventional excavation sections. Such interfaces and transition zones between the two
types of excavation introduce uncertainties into design and construction. Design problems
include: (1) the selection of the points where the transition can safely be made, and (2)
determination of stable slopes for the transitions. Construction problems exist in extending
conventional excavation into the deep masses of broken rock created by larger nuclear
explosions.
In balance, the problems of nuclear excavation are less on Route 25 and this route is
the more favorable for nuclear construction if and when feasibility of the method can be
established.
(2) Conventional Excavation Sections
Route 17 includes a length of about twenty miles across the Chucunaque Valley where
the average ground surface is about Elev. 200. The underlying rocks are clay shales of the
Sabana beds in which the possibility of creating stable slopes by nuclear excavation
procedures is very unlikely. In fact, proper slopes for conventional excavation would have to
be developed for these weak rocks and some trial excavations would be required to establish
economical safe slopes. In addition, it is not yet known how far the weaker rocks of
formations bordering the Sabana Beds extend into the foothills of the Atlantic and Pacific
118
divide sections but geologically it seems possible that conventional excavation might have to
extend into relatively high ground, further increasing difficulties and costs.
In comparison, Route 25 has a length of eighty miles across the Atrato Swamps but the
surface elevation for most of this length is close to sea level. Generally, the materials for the
full depth of the canal prism are soft organic deposits and unconsolidated soils which can be
removed by hydraulic dredging. Techniques for building a canal in such materials are well
established, no unprecedented methods are required, and no significant difficulties are
anticipated. It would also be easy to widen or to divide the canal into separate channels in
this section if sufficient space is left between protective levees in the initial planning.
In summary, the greater length of conventional excavation on Route 25 is more than
offset by absence of grave uncertainties in design and construction as compared with Route
IT
(3) Flood Diversion Requirements
Route 25 has the disadvantage of large volume rivers with heavy silt loads flowing
toward the alignment in its lower reaches. These flows would create unacceptable conditions
in the sea-level canal: large and long flood diversion channels are required on both sides of
the canal to carry the flood waters to safe discharge into the Atlantic, particularly on the
east side where the flood channel for the Atrato River approaches the size of the canal itself.
The penalty lies in volume of required excavation and cost, but no particular design and
construction difficulties are anticipated.
Head water river flows on Route 25 will enter the canal but the volumes of flow are
small and no particular difficulties are anticipated. On Route 17 it is planned to drop the
flows of the Sabana and Chucunaque Rivers into the canal. The flood flows here are
somewhat larger than the head water river flows into Route 25 and the silt load is expected
definitely to be larger, creating a requirement for maintenance dredging in the Route 17
channel. No particular difficulties are anticipated in developing a design for safe dissipation
of energy where the waters of these rivers are dropped into the canal.
Feasibility of Nuclear Excavation
Feasibility of excavation by nuclear explosions is discussed in terms of: (1) the present
situation, i.e. the possibility of its being used with assurance for interoceanic canal
construction within the next ten years; (2) the requirements for a continuing program of
nuclear testing to assure future feasibility; and (3) the possibilities of future applicability to
weak rocks such as the clay shales of the Chucunaque Valley. These discussions apply
exclusively to the physical development and configuration of craters which would result in a
usable canal and exclude all other effects of nuclear explosions such as seismic, air blast, and
radiological hazards.
(1) Present Feasibility
The Technical Associates are in unanimous agreement that the techniques for nuclear
excavation of an interoceanic canal cannot be developed for any construction that would be
planned to begin within the next ten years.
119
The reasons for this opinion are:
a. Extension of the scaling relations now established by tests to the much higher yield
explosions is too indefinite for assured design and the “enhancement†effects due
to saturated rocks and row charge effects now assumed have not been proved by
large scale tests. There is a definite possibility of a major change in the mechanics
and shape of the crater formed by the much higher yield explosions required for
the canal excavations as compared to extrapolations from the relatively small-scale
tests carried out to date.
b. The effects of the strength of rock on the stability of ‘‘fall-backâ€â€™ slopes and the
broken rock crater slopes projecting above the fall-back to the great heights
required for an interoceanic canal have not yet been established.
Therefore, the Technical Associates conclude that nuclear excavation cannot
safely be considered as a technique for assured construction of an interoceanic
canal in the near future.
(2) Future Development
The economic advantages of nuclear explosions for excavation of the very deep cuts
required by an interoceanic canal are so great that the present ‘““Plowshare†program should
be continued, extended, and pursued vigorously until definitive answers are obtained.
Assured application of this technology to design and construction of an interoceanic canal
will require an orderly progression of tests up to full prototype size, including full-scale row
charge tests, in generally comparable rock types, terrain and environment. Such a program
may well require another ten to twenty years to establish whether or not nuclear excavation
technology can be used with positive assurance of success for construction ofa canal along
Routes 17 or 25.
(3) Application to Excavation in Clay Shales
A growing body of knowledge and experience indicates that high slopes in clay shales,
as in the Chucunaque Valley, or in more competent rocks underlaid by clay shales, as in
parts of the existing canal, may have to be very flat for long-term stability and to avoid the
danger of massive slides in the first few years after excavation. Some attempts have been
made to produce such flat slopes by elaborate explosive techniques, such as over-excavation
in anticipation of slides, multiple row charges, and successive series of explosions or
“nibbling†techniques for application to problems such as construction of a sea-level canal
across the Chucunaque Valley. The Technical Associates believe this to be a highly
unpromising line of investigation with minimal chances of developing procedures that could
be used with assurance in the foreseeable future.
ROUTES CONSTRUCTED BY CONVENTIONAL EXCAVATION
Routes which would be constructed wholly by conventional methods are Route 10
about ten miles to the west of the existing canal and generally outside of the Canal Zone
120
and Routes 14 Combined and 14 Separate both in the Canal Zone and near the existing
canal. The relative advantages, disadvantages, risks and uncertainties will be discussed first as
between Route 10 and either of the Routes 14 and second as between Route 14C and
Route 14S.
Experiences with slides in the excavated slopes of the existing canal near the
continental divide clearly demonstrate that achieving reasonably permanent slope stability is
a major problem and would be a large economic factor in the design and construction on
any of these routes. Comparisons herein are based primarily on uncertainties and risks of
instability of excavated slopes, with some attention to the stability of structures and
excavation spoil placed on top of the soft Atlantic mucks of the Gatun Lake area. All
comparisons relate to the alignments and excavation slopes presented in the final reports
prepared by the Corps of Engineers’ study groups operating under the supervision of the
Engineering Agent. It is recognized that some of the risks discussed herein have been
partially compensated for by adoption of different slope design criteria for the three routes,
as earlier recommended by the Technical Associates. The following discussion pertains to
remaining advantages, disadvantages, uncertainties and risks.
Comparison of Route 10 with Routes 14C and 14S
Route 10 has the following advantages: (a) it could be constructed and placed in
operation without hazard to or interferences with the existing lock canal which could be
maintained on a standby basis. A slide during construction or in the first few years of
operation, while undesirable, would not result in complete blockage of trans-isthmus ship
passages as it would on Route 14C or 14S. (b) A large part of Gatun Lake could be
maintained permanently at its present elevation by barrier dams, which would not be
particularly difficult to construct where Route 10 crosses the lake. (c) By virtue of its
separation from the existing canal and Gatun Lake, a large part of the excavation could be
accomplished in the dry by well-established construction methods. (d) Large portions of the
tremendous volume of excavation spoil could be transported to the Pacific and Atlantic
Oceans for useful construction of breakwaters and for disposal with the least effect on the
environment. (e) The terrain lends itself well to economical construction of a ship by-pass
channel near the middle third of the length, if increases in traffic should make this
necessary. This is not possible on Route 14.
A major disadvantage and uncertainty of Route 10 along the alignment presently
explored is that about eight miles of the length across the continental divide, the highest and
largest excavation volume part of the route, appears to be underlain by soft altered volcanic
rocks at depths which would have major unfavorable effects on stability of excavation
slopes. There is no precedent of excavation experience for the slope stability characteristics
of these soft altered volcanics but results of laboratory testing indicate that they may be at
least as weak as the clay shales which have caused severe slope instability along the existing
canal. Thus, relatively flat excavation slopes have had to be assumed, even when adopting an
“observational approach†in which trial slopes would be excavated and observed as full-scale
tests to determine the steepest safe slopes.
The critical geology and structure of the underlying formations on Route 10 is
completely masked by a thick basalt capping across the divide area. It must be assumed,
121
however, that similar structures and faulting as along the existing canal underlie the basalt.
Some geologic evidence indicates that lateral shifting of the alignment of the reach through
the continental divide, perhaps by a mile or so, might encounter more competent underlying
rocks. If so, the disadvantage of higher terrain might be more than compensated for by use
of steeper slopes, thereby reducing both excavation volumes and uncertainties. Therefore,
design studies for Route 10 should include explorations of offset alignments in search of the
best rock and geologic structure. This will require a very large number of core holes to
depict the geologic conditions adequately for reasonable design and will necessitate one or
more years’ lead time for accomplishment of these required investigations. It is the
geological consensus, however, that design explorations will not disclose subsurface
conditions that are worse than those along the line now explored and which are reflected in
use of conservative soft rock slopes for the entire eight mile length.
Routes 14C and 14S have the advantages of more extensive and complete subsurface
and surface geological explorations in the area of the existing canal and of smaller
excavation volumes due to the generally lower topography. An exception is the crossing of
Gatun Lake at its widest point where barrier dams to establish differences in water levels
may require large excavations and massive quantities of fill. Their disadvantages are almost
certain interferences with operations of the existing canal during construction, complete loss
of the existing canal during and after conversion to a sea-level canal, and loss of Gatun Lake
in its present form. There are also uncertainties and risks of major slides which are discussed
more fully in the comparison between Routes 14C and 14S.
Comparison of Route 14C with Route 14S
(1) Slope Stability
In the continental divide section, Route 14C involves hazards of major slides which
could close the existing canal for long periods of time during construction of the new canal,
and which thereafter could block the sea-level canal, These hazards result from much deeper
excavations through sections where landslides have already been activated by construction
of the existing canal. They would be particularly serious during the period of rapid
drawdown required for conversion to a sea-level canal. While allowances for this hazard have
been made in recommendations for slope design, there still remain unknowns and
uncertainties concerning the effects of the rapid drawdown (in a period of about ten days)
on the stability of slopes where past sliding and stress readjustment have created major
planes of weakness.
Gold Hill presents a particular hazard to Route 14C. Observational records indicate that
this rock mass is moving erratically and is squeezing softer materials below its base upward
into the existing canal. It is believed that safe construction of Route 14C would require
unloading of Gold Hill which will significantly increase the volume of excavation.
By virtue of its separation through the critical divide cut length, the hazard of slides
blocking the existing canal are much less for Route 14S. It is possible that its excavation
could still endanger the stability of Gold Hill but both the hazard and magnitude of any
corrective unloading would be greatly reduced.
122
(2) Excavation and Excavation Spoil
Due to its location contiguous to the existing canal, Route 14C requires underwater
excavation of large volumes of rock, excavation to depths greater than 150 feet below the
operating water surface by construction procedures which are without precedent. In
addition, a large part of the divide cut excavation spoil would have to be hauled to disposal
in Gatun Lake which would drastically change the configuration of the residual lake. In
contrast, practically all of the divide cut excavation for Route 14S could be made in the dry
by methods for which there is ample precedent and a large part of the excavation spoil
could be disposed of in the Pacific.
Excavation spoil deposited in Gatun Lake, whether it be in the form of barrier dams or
non-functional waste areas, will rest on the soft Atlantic muck deposits forming the lake
bottom. Stability studies for barrier dams in the central portion of the lake have shown that
these weak materials create major dangers of massive slides during the rapid drawdown of
the lake to sea-level, which is certainly required on the canal side of any spoil piles. Thus,
regardless of the intended purpose of the spoil piles, very flat side slopes and all of the
protective measures incorporated in the design of barrier dams will be required wherever the
spoil is not confined by existing rock islands. This condition applies equally to Routes 14C
and 14S although, for the latter, the volumes of spoil in the lake could be greatly reduced.
CONCLUSIONS AND RECOMMENDATIONS
On the basis of the considerations summarized in the preceding sections, the Technical
Associates for Geology, Slope Stability and Foundations have reached the following
conclusions and recommendations:
1. The physical feasibility of excavation of a sea-level canal by nuclear explosions is
not now established. Therefore, nuclear excavation cannot be recommended for
consideration for any canal that should enter construction within the next ten
years. However, if design and construction of a new interoceanic canal are to be
deferred one or more decades, nuclear excavation techniques hold promise of such
great economic advantages that investigational and testing programs, as recom-
mended in this report, should be pursued vigorously, but with the following
exception. Attempts to excavate stabie slopes in deep cuts in clay shale rocks by
explosive procedures are so unlikely to produce acceptable or safe results that
further investigations or tests in this direction are not recommended.
Assuming that nuclear excavation is now a feasible assured construction technique
and in terms of the technical uncertainties and risks then remaining, the choice
between Routes 17 and 25 is decisively in favor of Route 25 in spite of its greater
length.
3. For routes constructed by conventional excavation the advantage of Route 10
being separated from the existing canal far outweighs potential difficulties and
uncertainties in comparison with Routes 14C and 14S. If this route is selected, the
Technical Associates recommend that the existing canal be maintained in an
operational condition for at least ten years after a new separate canal has been
placed in operation. By having the existing canal available in the event of a
Ww
123
temporary blockage of the new canal, Route 10 would justify economies which are
inherent in an observational approach to the selection of design slopes, but which
involve some risk of slides after completion of construction.
If for reasons not considered herein a route within the Canal Zone is considered
imperative, construction of Route 14S introduces substantially fewer hazards and
uncertainties than Route 14C. Route 14C would result in filling large portions of
the Gatun Lake area with excavation spoil, which is not necessary for Route 14S,
and has substantially increased hazards of canal blocking slides caused by the
drawdown of water levels accompanying conversion to a sea-level canal. Major
geologic surprises are not anticipated on these routes.
A valid comparison cannot be made between Routes 10, 14C and 14S, all of which
would be excavated entirely by conventional means, and Routes 17 and 25, both
of which require nuclear excavation for the planned construction. Nuclear
excavation is not yet a proven construction technique and there is no assurance
that construction plans and cost estimates based on present knowledge are valid.
Therefore, dollar cost comparisons at this time have no true significance. The
comparisons presented herein between Routes 17 and 25 are based on the
assumption that assured feasibility of nuclear excavation can be developed by tests
over the next decade or two, at which time construction on Route 25 might be
planned with some confidence. If earlier construction of a sea-level canal should be
recommended by the Commission, it is urged that the route selection be restricted
to Routes 10 and 14S which can be constructed by presently known techniques of
design and excavation.
The Technical Associates for Geology, Slope Stability and Foundations hope that this
report, based solely on technical considerations of risks, uncertainties and favorable aspects
of the several routes considered for a sea-level canal, will be of assistance to the Commission
in its final deliberations and recommendations.
PCR:he
Respectfully submitted:
(thir. (0A
Arthur Casagrande, Consulting Engineer
Fach awn
Frank A. Nickell, Consulting Geologist
Roger anoaden: Consulting Geologist
edge, Consulting En,
Thomas F, Ae Consyiiing Geologist
124
ENCLOSURE 3
LETTER FROM THE
ATOMIC ENERGY COMMISSION
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UNITED STATES
ATOMIC ENERGY COMMISSION
WASHINGTON, D.C. 20545
July 7, 1970
Mr. Robert B. Anderson, Chairman
Atlantic-Pacific Interoceanic Canal Study Commission
Room 6217
726 Jackson Place, N.W.
Washington, D.C. 20506
Dear Chairman Anderson:
We were most pleased to have a report on the last meeting of the Atlantic-Pacific
Interoceanic Canal Study Commission (CSC). With the tenure of CSC drawing to a close, we
believe this is an appropriate time for the Atomic Energy Commission to provide the CSC
with a brief status report concerning the work our laboratories have been doing in relation
to nuclear excavation and our current estimate concerning what can be accomplished with
further investigations.
Since the establishment of the CSC we have oriented our nuclear excavation
experimental program so as to support the CSC studies and investigations. To date, we have
not been able to do all the experiments which would be required to make a determination
of the feasibility or infeasibility of using nuclear explosions for the excavation of the canals
under study by the CSC. It is thus clear that any decision made to construct a sea-level canal
in the near future must be made without being able to rely on nuclear excavation.
While we have not developed the technology sufficiently to make a specific
determination of the feasibility of using nuclear explosions in the construction of a sea-level
canal, our laboratories have made great progress in understanding the cratering processes and
in designing explosives that minimize radioactivity. Some of their major technical
achievements have been:
1. Development of a basic understanding of crater mechanisms. This understanding
comes from theoretical studies, laboratory experimental work, and most impor-
tantly seven nuclear cratering experiments with yields ranging up to 100 KT. This
understanding provides a greater degree of confidence in the calculations now used
to design excavations, and also permits the specification of the important physical
properties of rocks which must be determined so as to make these calculations.
2. The first nuclear row charge experiment had dimensions and other characteristics
essentially as predicted.
3. Development of an understanding of seismic response through tests at the Nevada
Test Site, which now has exceeded one megaton yields with no adverse effects.
4. Reduction of the radioactivity associated with excavation projects. An explosive
specifically designed for excavation has been developed through a series of nine
tests. The last one was the FLASK experiment executed in May 1970 in which a
aT,
reduction of radioactivity, of a factor of five below our previous levels, was
achieved. Although it is too late to incorporate the encouraging results from
FLASK into the CSC studies, I believe that you will be pleased to know that if
nuclear explosions were to be considered at some future date for canal
construction the radioactivity would be an even smaller problem than is indicated
in the reports presently being prepared for you.
5. Development of a predictive capability, through extensive measurements on nuclear
cratering experiments, for the distribution of radioactivity in the fallback, ejecta,
fallout, and long-range diffusion.
However, some technical problems still remain and require further work. While the
understanding of cratering has been experimentally determined up to 100 KT, it is necessary
to conduct experiments at yields up to a megaton. In addition, experiments are needed in
rock of the same type as that expected along the routes of the canal, namely hard,
water-saturated rock, and weak clay shales. Furthermore, additional experimentation is
needed on nuclear row excavation to investigate close spacing concepts at high yields and to
determine if there are any unknown practical problems associated with connection of rows.
Additional work would also be useful in further reducing the radioactivity of excavation
explosives.
The Lawrence Radiation Laboratory is working on a more detailed technical summary
of the status of the excavation technology and the remaining questions. We will provide you
a copy of the summary as soon as it is available.
The rate of development of the technology is not dictated so much by technical
problems as by international considerations and public attitudes. The great current
expression of public concern over the environment makes any experimental program such as
this one difficult to accomplish. However, as the record clearly indicates, we have always
proceeded in an extremely cautious manner in regard to environmental effects and we will
continue to do so. Our large research effort to date in this area has led us to the conclusion
that the risks associated with this application of nuclear energy can be kept to minimum
acceptable levels while, at the same time, we can derive great benefits from its utilization. It
is Our opinion that, with the further improvements which we are confident can still be made
and with greater public understanding of this technology, realistic environmental concerns
can only diminish.
One of the factors we are faced with is the constraint of the limited test ban treaty.
However, we have conducted our last five excavation experiments within these constraints
and would, of course, conduct future experiments similarly.
As shown by the discussions which took place during the negotiation of the
Nonproliferation Treaty, there is an awareness on the part of developing countries of the
potential benefits under Article V of the Treaty. We also cannot ignore the excellent and
aggressive program in nuclear excavation which has been described by the USSR, and
particularly their stated plans for using this type of excavation on projects of a magnitude
similar to the sea-level canal between the Atlantic and Pacific Oceans.
Our commitments, the interest on the part of the developing countries, and the USSR
program not only establish a need for us to proceed with the development of nuclear
excavation technology but also, we believe, will aid us in overcoming the political and
emotional problems we currently face.
128
In summary, it is our view that, given the authorizations and funds, the problems
regarding technical feasibility can be solved within a relatively short time. Each step we have
taken in developing nuclear excavation technology has resulted in lowering the potential risk
involved. At the same time, our increased understanding of the cratering mechanics has
increased our belief in the potential benefit of this undertaking for mankind. Apparently the
USSR has reached a similar conclusion concerning the benefits and risks and is proceeding
accordingly. We believe that, if for any reason a decision to construct an interoceanic
sea-level canal is delayed beyond the next several years, a nuclear excavation technology
might be available and provide a realistic option in canal construction considerations at that
time.
Sincerely,
Chairman
129
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Tr of Foreign Policy Considerations
ANNEX I
STUDY OF FOREIGN POLICY CONSIDERATIONS FOR THE
CONSTRUCTION AND OPERATION OF AN
ATLANTIC-PACIFIC SEA-LEVEL CANAL
BY THE
FOREIGN POLICY STUDY GROUP
ATLANTIC-PACIFIC INTEROCEANIC CANAL STUDY COMMISSION
WASHINGTON, D.C.
AUGUST 1970
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Table of Contents
Chapter
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C. Importance of the Canal to United
StatesiintemationaliRelationsi eee eee enone nnn ee
D. United States Bilateral Relations
WilthnthevHoshCountivige ao nomen nis cots cero ceae nee eo cuseWeiere eee
E. How We Might Build a Sea-Level Canal,
Where We Might Built It, How We Might
OPeratedl eR es el ees aoe ras i A erg ee ed auc bah
II. HISTORICATABACKGROUND Irae ook ce ee ee Se ee see
Ill. ‘Tale CASTE IROIR AV SIB/ASLIENIBIL CANININIL, sooseca. o 0 co oo co ou ob nab ao bE SS
IV. IPANINUAAIM TAN ANINTIDD JN, SIBVACILIB WABIL, (C/ANINUNID 5 occ oc ac ancccccecccsod0onaane
A. United States-Panamanian Bilateral
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A. Problems Created by Construction
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C. A Sea-Level Canal Through Nicaragua-
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VI. HEMISPHERIC INTEREST IN A SEA-LEVEL CANAL.................
Ae EConomici€onsiderations, steer ee eee ee oe naeLe
Bae eNuclearnConsiderationss ioscecsrcn ere nO Lee nuns or ene
VII. WORLDWIDE ASPECTS OF CONSTRUCTING A SEA-
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VII. AN ATLANTIC-PACIFIC SEA-LEVEL CANAL:
ANINT IDNFITERINVANTIIOUNDANIL, PUIBILIKE WIULINING , go oc ncoancon0os Go 0cG0eb0KE
1-iii
LIST OF MAPS, GRAPHS, and TABLES
Description. Page
Figure I-1 — Panama-Colombia Border Area, Map of Route 17 ................. 1-8
Figure I-2 — The Canal Zone and Vicinity, Map of Routes 10
anid V4. ies 3.565% pe a ne een Pee Oe a a ee I-10
Figure IV-1 — Map of all Canal Routes Investigated (with insert) ............... 1-24
Figure [V-2 — Panama-Colombia Border Area, Map of Route 23 ............... 1-29
Table IV-1 — Estimated Gross Payments and Income Flow to the
Republic of Panama from the Canal Zone (1967 and 1968) ............. 1-32
Table IV-2 — Salaries and Net Income of Non-U.S. Citizen
Employees of the Canal Zone Resident in Panama
(WIG and VOGS)ie ase ake 2 cheers ereatae oie ee heheh eae ae ee ene eee I-33
Figure IV-3 — Graph of Projected GDP for Various Canal Conditions,
1967-2000; Lock Canal — Present Treaty, Route 17,
Roney N(Olewayel Wah Preval NOI AS bo codosacoosbouavomoceiucooseudoouer 1-39
Figure IV-4 — Graph of Projected GDP for Various Canal Conditions,
1967-2000; Lock — Present Treaty, Route 10 plus
PresentiGanalwandebnlareedeltocks Gana men anette nee nea ee 1-40
Table IV-3 — Summary of Projected Changes in Panamanian
Employment by the PCC/Government (Administration)
and U.S. Military and in Foreign Exchange
Resulting from the Proposed New Treaties and a
Sea-Level' Canal «3.15. 8) laine crane Sate ose na a eae 1-42
Table [V-4 — Summary of Projected Changes in Panamanian Employment
by the PCC/Government and U.S. Military and in
Foreign Exchange that Would Result From the
Proposedmineatiestand) CanalpAlitennabivies merce rieie intr aetna nee I-43
Figure V-1 — Panama-Colombia Border Area, Map of
ROUtG 25) cits clases 2 Chee ays os Ween, one roe ee eee ee 1-46
Figure V-2 — Nicaragua-Costa Rica Border Area, Map of Route8 ............... I-48
Hable Viel — Panama’ G@analiUsers, Biscall Yearsl 969 ere eee I-52
|-iv
CHAPTER I
HIGHLIGHTS AND CONCLUSIONS
SUMMATION
The Foreign Policy Study Group has identified four foreign policy advantages that
would accrue to the United States if a sea-level canal were constructed in Panama. The
Group has not encountered any insurmountable foreign policy disadvantages to such
construction.*
A sea-level canal would:
1. Benefit the trading nations of the world, as well as serve United States international
trade interests by resolving the canal capacity problem into the 21st century.
2. Contribute to an enduring and sound relationship with Panama, which in turn
would help ensure the continued availability of a dependable and efficient interoceanic
canal to all maritime nations.
3. Facilitate strategic support for United States foreign policy, when required,
through its decreased vulnerability and increased size which gives greater mobility to our
ships.
4. Emphasize the role of the United States as an international leader, particularly if
nuclear excavation could be used to demonstrate the power and promise of peaceful use of
atomic energy.
In light of its mandate to concentrate upon the foreign policy aspects of a sea-level
canal, the Study Group has not sought to determine whether the importance of the above
advantages is sufficient to warrant the expenditure of scarce United States resources which
have alternative domestic and international uses.
INTRODUCTION
The mandate of the Foreign Policy Study Group has been to determine and evaluate
foreign policy considerations involved in the question of whether to build and operate a
sea-level canal. We have not attempted to evaluate the desirability of such a waterway on
other than foreign policy grounds. We have addressed the question of the addition of a third
set of locks to the existing waterway, in so far as it provides an alternative to a sea-level
canal in meeting essential United States interests.
The fundamental United States interest in a sea-level canal is the same as its interest in a
lock canal: to provide an efficient and dependable means of interoceanic transit to the ships
of all nations on a non-discriminatory basis at reasonable tolls in order to promote world
commerce with attendant strategic and commercial advantages.
A dependable and efficient interoceanic canal can best be assured through an enduring
good relationship with the host country.
*The question of the effect of a sea-level canal on ecology would, we assume, be resolved before beginning construction. If
not, adverse international reaction to the ecological effect of construction would be a foreign policy disadvantage.
1-1
The Group recognizes that construction of a sea-level canal in Panama would commit
the United States to responsibilities involving an indefinite extension of United States
presence in Panama, and that there are problems associated with such presence. Given the
commercial and strategic importance to the United States of a transisthmian waterway,
however, the Group accepts the fact that some United States presence in Panama would
necessarily be extended whether or not a new canal is constructed, and considers the
problem manageable under satisfactory new treaty arrangements.
The main foreign policy considerations for the construction and operation of a sea-level
canal relate to:
— The importance of a transisthmian passage to United States international relations.
— United States bilateral relations with the host country.
— How we might build a sea-level canal, where we might build it, how we might
operate it.
IMPORTANCE OF THE CANAL TO UNITED STATES
INTERNATIONAL RELATIONS
INTERNATIONAL TRADE
United States Trade Through the Canal.
The Report of the Study Group on Interoceanic and Intercoastal Shipping demon-
strates that the capacity of the existing canal in terms of numbers of transits would
probably be reached by the end of this century, if not sooner. Seventy percent of the
tonnage of cargo transiting the canal originates or terminates in United States ports. For FY
1969 this portion of canal traffic amounted to some 70 million tons and constituted 10% of
the value of our foreign trade. Yet, as of 1970 there were about 1300 ships afloat, under
construction, or on order which were too large to enter the Panama Canal locks. In addition,
there were approximately 1750 more ships in these categories that could not pass through
the canal fully laden at all times because of draft limitations due to seasonal low water level.
Limitations on quantity and size of ships transiting the canal can complicate commerce
by making shipping more costly and difficult, by causing economic dislocations for
suppliers, and by restricting supplies to consumers. These limitations thus could tend to
retard the expansion of our international trade.
Proceeding with the construction of additional canal capacity in the face of possible
deficits from the operation, however, may be regarded as an uneconomic use of our
resources.
Other Nations’ Trade Through the Canal.
The two groups of other principal users include our major trading partners, and other
friendly nations assisted by the United States and international agencies in developing their
economies. The potential adverse effects listed above on United States commerce also apply
to these other nations which utilize the canal.
Many commodities, particularly petroleum, ores, metals and coal, which are the highest
tonnage items transiting the canal, are so competitive that significant changes in shipping
I-2
costs can cause shifts to alternative sources of supply. Such bulk cargoes, however, can most
easily avoid the canal by using larger ships and alternative ship routing.
These bulk items are frequently important sources of foreign exchange for developing
nations. Poorer nations would also suffer should transportation difficulties limit supplies or
raise costs of food, grains and other agricultural commodities that are significant items in
canal traffic. Should the canal fail to serve world trade adequately, we would be blamed
because we are identified in world opinion as being responsible for the efficient operation
and defense of the transisthmian waterway.
Providing such service, however, especially through an outstanding engineering
achievement, would be harmonious with our position of world leadership, would be
consonant with our publicly stated intention to continue to accommodate world commerce,
and would demonstrate our continuing interest in hemispheric development and expanding
trade among the nations of the world.
Alternatives for Expanding Canal Capacity
(a) The existing canal can accommodate ships of 65,000 DWT. It has a maximum
potential capacity of 26,800 transits per year with improvements costing up to $100
million. Such investment would not, however, meet the problem of accommodating larger
vessels.
(b) A third set of locks would expand the capacity to about 35,000 transits per year.
Construction of locks to accommodate ships up to 150,000 DWT would cost about $1.5
billion. Such expansion would probably accommodate vessels in the trade into the 21st
century.
The proponents of the third lane of locks concept believe it has a major political
advantage, namely, that it can be built under the provisions of existing treaties. The
Panamanians oppose this view, although they agreed in a 1939 exchange of notes clarifying
the 1936 Treaty that the United States could undertake additional construction- and we, in
fact, did.
(c) The sea-level canal preferred from an engineering point of view, i.e., along Route
10, could accommodate up to about 66,000 transits per year, depending on the success in
overcoming technical limitations such as tidal currents. Its minimum capacity is estimated at
38,000 transits per year. Construction cost would be about $2.9 billion. It would
accommodate ships up to 150,000 DWT under all conditions, and would accommodate
ships up to 250,000 DWT under favorable tidal conditions. Other alternatives are feasible
but have higher construction costs. If restrictive technical conditions prevailed this would
resolve the capacity problem only until the early part of the next century. Under optimum
conditions capacity problems would be resolved beyond the middle of the 21st century.
Under both conditions the canal could be expanded, at additional cost, for as much capacity
as required in the future. New treaty arrangements with Panama would be required.
Operation of the sea-level canal described above in conjunction with the existing canal
would provide even greater capacity and flexibility.
We conclude that United States trade interests would best be served by our arranging to
provide additional canal capacity before demands for transits exceed capacity. A sea-level
canal or canal system would best serve our long term trade interests.
1-3
STRATEGIC CONSIDERATIONS
Our ability to defend the canal and thereby assure its continuing operation is of
importance in enabling us to defend ourselves and assist our friends militarily. Whether the
canal is lock or sea-level is of great importance in this regard.
Vulnerability of a Lock Canal
A lock canal is highly vulnerable both to sabotage and to various forms of military
attack. It is difficult to safeguard. The Defense Study Group has concluded that a sea-level
canal would be far less vulnerable than either the present canal or any of the modernized
versions of a third lock canal.
Mobility of Forces and Materiel
A secure isthmian canal is important to the effective support of military operations
overseas. From the standpoint of foreign policy this means increased availability of military
resources to support our foreign policy objectives to the extent that such support is
required. It implies the need for a canal that will accommodate the increased size of both
naval and merchant ships.
We conclude that the canal is important for our national defense as well as for the
military support of our foreign policy. According to the Defense Study, considerations of
vulnerability and size which inhibit our strategic capabilities are best overcome by a sea-level
canal.
UNITED STATES BILATERAL RELATIONS WITH THE HOST COUNTRY
BACKGROUND OF OUR RELATIONS WITH PANAMA
Sources of Friction
The 1903 Treaty, amended in 1936 and 1955, has been a continuing source of friction
in United States—Panamanian relations. The principal points at issue have included the
following:
(a) Panama’s desire to derive a greater share of the economic benefits resulting from
canal operations.
(b) The grant to the United States of “the rights, power and authority within the
zone...which the United States would possess and exercise if it were the sovereign of the
territory...to the entire exclusion of the exercise by the Republic of Panama of any such
sovereign rights, power or authority.†This conflicts with Panamanian aspirations concerning
the most important asset on the isthmus—the canal.
(c) The presence and the life-style of a large United States community living adjacent
to Panama’s urban areas (there are approximately 38,000 United States military and civilian
personnel living in the Canal Zone).
1-4
Recent Developments
The 1936 and 1955 amendments to the treaty, as well as the 1962-63 discussions
between Presidents Kennedy and Chiari, reflected efforts to deal with frictions caused by
existing canal arrangements without fundamental change in treaty structure. Failure to
satisfy basic Panamanian aspirations caused growing frustration that erupted in the January
9, 1964 riots, in which in least 18 Panamanians and 4 American soldiers were killed, over
100 persons were injured, and property valued at several million dollars was destroyed.
On December 18, 1964, President Johnson issued a statement declaring that the present
canal would soon be inadequate for the needs of world commerce and that he had decided
to (1) press forward with plans for a sea-level canal; and (2) propose to the Government of
Panama the negotiation of an entirely new treaty for the existing canal.
On June 26, 1967, President Johnson announced that the negotiating teams had
reached agreement on the form and content of three interrelated treaties covering the
existing canal, a new sea-level canal, and canal defense. These treaties were never submitted
for ratification by either government.
If a sea-level canal were to be constructed, its value in terms of United States-
Panamanian relations would be judged on the degree to which it made possible a more
enduring good relationship by facilitating the resolution of the principal points at issue
between the two countries.
CANAL ADMINISTRATION AND ECONOMIC BENEFITS
Value of the Asset
A sea-level canal would be simpler to operate than a lock canal and would be less
subject to interruption. Thus, administrative arrangements would be simplified.
Its construction would also create economic benefits for Panama and assure that all
foreseen requirements for ship transits are met in Panama rather than in another country.
Benefits to Panama
Construction of a new canal anywhere in Panama or improvements to the existing canal
could be beneficial to that nation’s economy. These benefits could result both from the
increased economic activity during the construction period and from the additional revenues
from increased traffic which would be available to Panama if a revenue-sharing arrangement
were adopted.
The Stanford Research Institute estimates that in peak construction years, based on the
method and route of construction, Panama’s Gross Domestic Product would be from 6.3%
to 9.5% higher than it would be without construction.
JURISDICTION
There are characteristics of a sea-level canal which would lend themselves more readily
than those of a lock canal to the satisfaction of basic Panamanian aspirations of exercising
jurisdiction in the Canal Zone. Without the requirement for sensitive locks and generating
1-5
plants, and large numbers of foreign personnel, it would be possible to reduce the Canal
Areas to a minimum and to permit a broader exercise of Panamanian jurisdiction in these
areas. This presumes that a sea-level canal would be operated instead of, not in addition to,
the lock canal. This particular advantage would not be attained if the sea-level canal and
lock canal were operated as a system.
THE LARGE FOREIGN PRESENCE
United States presence in Panama is emphasized both because of the number of
American residents and because the United States is such a large employer. A sea-level canal
would require about 2200 operating employees compared with the 5000 required to operate
and maintain the present canal. The present canal complex also has approximately 10,000
additional employees engaged in providing the entire spectrum of commercial activities and
community services for the Canal Zone. This latter group, too, could be drastically reduced
under new arrangements. Most of the services performed by these 10,000 employees could
be provided by the Panamanian business community and government, and need not
continue as functions of the canal operating authority. Since a sea-level canal if operated by
itself would not have vulnerable lock installations, the military force protecting it could be
less pronounced. The size and visibility of a separate affluent community of foreigners within
Panama would be reduced.
We conclude that construction of a sea-level canal would facilitate a more enduring
good relationship with Panama than would augmenting the existing canal. It would also
secure more certainly the availability of an efficient and dependable canal. Construction of a
sea-level canal would bring important economic advantages to Panama, thereby further
contributing to the enduring and sound relationship we seek.
FOREIGN POLICY CONSIDERATIONS IF A CANAL WERE
CONSTRUCTED OUTSIDE OF PANAMA
Construction outside of Panama would cause grave repercussions in our relations with
Panama. The canal-centered economy of Panama would be disastrously affected.
Colombia
Because of the more diversified Colombian economy, a canal in Colombia would not
play the major economic role it does in Panama. On the other hand, making arrangements
for the defense of the routes in Colombia would pose difficult political questions for the
United States and Colombia, and the cost of building and maintaining defense facilities
would be higher for the Colombian than for the Panamanian routes. The major foreign
policy difficulty would be the serious consequences to United States relations with Panama.
We conclude that construction of a sea-level canal on Route 25 would merit further
consideration only in the event that mutually acceptable arrangements could not be reached
between the United States and Panama for construction of additional canal capacity in that
country.
1-6
Nicaragua
The Nicaragua-Costa Rica Route has been discarded from further consideration by the
Canal Study Commission because of its expense in comparison with other canal routes.
Route 8 offers no significant foreign policy advantages that would counter-balance other
arguments against construction in that area. In light of these considerations, the United
States has moved to terminate its 1914 treaty relationship with Nicaragua (the Bryan-
Chamorro Treaty) that grants the United States the right in perpetuity to build a canal
across Nicaragua.
We conclude that construction of a sea-level canal along Route 8 is not a feasible
project.
HOW WE MIGHT BUILD A SEA-LEVEL CANAL, WHERE WE
MIGHT BUILD IT, HOW WE MIGHT OPERATE IT
NUCLEAR EXCAVATION
The prestige the United States would derive from having constructed a sea-level canal
would be enhanced if it were to prove feasible to employ nuclear excavation. The USSR is
moving ahead with a series of projects which give that nation an opportunity to demonstrate
its own advances in the field of peaceful uses of atomic energy. The excavation of a sea-level
canal by nuclear means would provide the United States a unique opportunity to
demonstrate progress on its part in this field on a massive scale.
Nuclear excavation would, however, raise fears regarding physical harm to individuals
and the disruption of their lives. Residents of the area chosen would have to be relocated
during construction. Evacuation would affect over 3,000 square miles and involve perhaps
10,000 people on the best route for nuclear excavation. The psychological and sociological
implications present problems that could prove formidable.
The restrictions of the Limited Test Ban Treaty on the use of nuclear explosives pose
another problem. It is not possible to determine whether or when international agreement
can be reached that would permit the use of nuclear explosives in Isthmian canal
construction.
The technical feasibility of nuclear canal excavation has not been established.
Determination of technical feasibility and removal of international treaty obstacles to
nuclear excavation would still leave great political and economic objections to a sea-level
canal remote from Panama’s metropolitan centers.
We conclude that, based on information currently available, nuclear canal excavation is
not now possible.
DESIRABILITY OF VARIOUS ROUTES IN PANAMA
Route 17 (Figure I-1)
A sea-level canal in the Darien region would be more than 100 miles from the
population centers of Panama and therefore should remove some of the lesser causes of
friction. Sparsely populated areas of Panama would be developed if this route were chosen.
Both of these advantages would probably be counter-balanced, however, by the foreign
policy problems attending nuclear excavation and by the economic dislocation involved.
1-7
CARIBBEAN SEA
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SCALE IN MILES
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DEPTHS IN FATHOMS
FIGURE I-1
The flow of resources into the development of the remote Darien region which would
result from the construction of the canal there would take place to the economic detriment
of the Panama City-Colon metropolitan areas. About $300 million per year in economic
activity would shift with the canal. Although in the long run construction of a canal in
Panama remote from the present one would probably not cause significant overall economic
changes in the structure of the economy, major short run economic dislocations would
result.
Route 10 and Route 14 (Figure I-2)
Both routes in the area of the present canal have the same general foreign policy
implications. The advantages of a sea-level canal are not adversely affected by any major
foreign policy considerations here. New treaties with Panama would be required to permit
construction. There might be some inflation during the construction period and some
deflation with the opening of a sea-level canal requiring less manpower than the lock canal,
but in neither case would it be substantial enough to stir up new antagonisms if the treaty
terms for the new canal were acceptable to both parties. Route 14 has the advantage of
being within the present Canal Zone while Route 10 would require special arrangements
with Panama to acquire land and access rights. The risk of long term closure of the existing
canal during the construction period and its permanent elimination as a canal with the
opening of a sea-level canal on Route 14 are major drawbacks to this route.
The proximity of both routes to the principal metropolitan areas raises the problem of
friction between the canal administration and the local population. The reduction of
personnel envisaged through a sea-level canal would ease this problem. At the same time,
availability of labor and supplies from the nearby Panamanian cities for the construction
and operation of the canal provides positive benefits both to the Panamanian economy and
to the United States.
Continued Use of the Lock Canal Along with a Sea-Level Canal
The greatest flexibility in the United States choice of alternatives and timing of new
construction, as well as the largest total capacity at least cost, are offered by operating the
old canal and a sea-level canal on Route 10 as a single system within the context of new
treaty arrangements.
We conclude that the order of preference of the sea-level canal routes in Panama on
foreign policy grounds is: Route 10, Route 14, Route 17.
POSSIBILITY OF INTERNATIONAL ADMINISTRATION
There has long been discussion concerning the possibility of arranging some form of
multinational participation in the operation of an Isthmian canal. The 1967 treaty drafts
contain provisions for multinational participation in the financing, ownership and operation
of a sea-level canal, but the exact terms of any arrangement are left open for future
agreement. While United States interests might be served by some form of multinational
participation in the future, the foreign policy benefits do not appear great.
1-9
CARIBBEAN
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THE CANAL ZONE AND VICINITY
SCALE IN MILES
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I-10
Panama has been cool toward multilateral arrangements for the canal. The inducements
for multinational participation are not great to major user nations, who appear to believe
that the operation of an Isthmian canal is primarily a United States responsibility.
We conclude that international participation in a sea-level canal is unlikely of
attainment under foreseeable circumstances. Over the long run, however, some form of
international participation may be obtainable and may be the best long-term guarantee of
United States interests.
I-11
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CHAPTER II
HISTORICAL BACKGROUND
The United States and Panama have been engaged in a partnership which has produced
great benefits for both countries, but which from the beginning has also been the source of
antagonism between them. The antagonism is compounded by the vast differences in size
and wealth, by the divergent interests of the two countries in the management of the canal,
and by barriers of language and culture.
In 1964 this interdependent but uneasy relationship suffered a setback. In that year the
subtle and complex issues which had stood between the two countries for sixty years were
reduced to symbols, conveniently simplified in a confrontation of flags. The youths of the
two nations used the symbolic representations of their nations to influence the course of
events. They tried to upset the agreement reached by their governments in 1963 that
Panamanian titular sovereignty over the Canal Zone would be recognized by flying the
Panamanian flag wherever the United States flag was displayed. The determination of each
student group to raise its nation’s emblem on the flagpole of an American school in the
Zone led to three days of rioting and the death of at least 22 persons. Panamanian demands
for a basic restructuring of the canal partnership took on added urgency.
United States Interest in an Isthmian Crossing
Even before the United States began to face two oceans, American statesmen were
convinced of the need to guarantee unobstructed passage across the Isthmus. This interest
grew when the country’s western frontier finally reached the Pacific with the settlement of
the Oregon boundary in 1846, and especially after gold was discovered at Sutter’s Mill and
49ers found the Isthmus to be the principal route to California. The United States then
sought to check the spread of British influence in the area, and to guarantee for itself
unimpeded passage over the existing routes and through any canal crossing that might be
built. In 1846 the United States Ambassador to New Granada (Colombia), which then
controlled what is now Panama, negotiated a treaty in which the United States recognized
New Granadan sovereignty over Panama, and New Granada guaranteed to United States
citizens the right to passage across the Isthmus on the same basis as to the citizens of New
Granada.
In the face of expanding British presence in Central America, the United States
concluded the Clayton-Bulwer Treaty with Britain in 1850 to assure that any canal
constructed on the Isthmus would be neutral and that neither country would fortify or
exercise domain over any part of Central America. Later, in response to the clear United
States intention to build a canal somewhere on the Isthmus, Britain agreed, in the
Hay-Pauncefote Treaty of 1901, that the United States could operate and defend a new
canal provided its neutrality as a shipping lane were maintained.
1-13
The Beginning of a Partnership
United States-Panamanian relations had their beginning, and take much of their
character, from a period in which the United States was emerging as a world power. The
Spanish-American War established the United States as the prime power in the Caribbean
and aroused new interest in that area among people in the United States. The sixty-six-day
journey of the battleship “Oregon†around Cape Horn during the war dramatized how
advantageous a canal would be for United States strategic policy.
The treaty that established the association between the United States and Panama was
more favorable to the United States than the Hay-Herran Treaty which the United States
had been ready to accept a year before, but which the Colombians had refused to ratify.
The Panamanian leaders arrived in Washington just after the Convention for the
Construction of a Ship Canal was signed, and though they were dissatisfied with some of its
provisions, they apparently were relieved to have a treaty and signed it. The treaty was
ratified by both sides, but Panamanian objections were registered with growing intensity
over the years that followed.
Panama Seeks to Undo the 1903 Treaty
Panamanian nationalists today see the treaty as an intolerable derogation of their
country’s sovereignty. Both the wording of the treaty, and the way the United States put its
provisions into practice, have much to do with Panamanian resentment. In the early years of
Panama’s independence, during the construction and initial operation of the canal,
conditions on the Isthmus caused the United States to adopt practices it probably would
have avoided if sanitation had been less of a problem, if Panama’s economy could have
better supplied the needs of the Canal Zone, and if Panama’s population had had the skills
to perform the tasks of canal construction and operation.
The United States Government operated the largest commercial enterprise in Panama,
supplying goods at reasonable prices to the workers, adequate sanitary housing, and stores
to ships passing through. Our Government even went into the hotel business. The
commissaries which were established within the Canal Zone became a continual source of
irritation to Panamanians who saw themselves excluded from the opportunity to exploit
canal-related commerce.
This problem was first dealt with in the Hull-Alfaro Treaty of 1936 which restricted
sales in the commissaries to direct-hire employees of the United States Government,
members of the United States Armed Forces, and certain others, provided the latter actually
lived in the Zone. In the same treaty the United States agreed to close the Zone to the
establishment of new private business, except to those engaged in canal related activities.
In the 1955 Treaty of Mutual Understanding and Cooperation between the United
States and Panama, it was agreed that only those Panamanian employees who actually lived
within the Zone would be allowed to use the commissaries. The 1955 agreement also carried
a memorandum of understanding in which the United States agreed to limit sales to passing
ships to petroleum, oil, and lubricants, and to give Panama, along with the United States, a
larger right to the Canal Zone market.
I-14
The Panamanians, of course, were not just interested in the indirect benefits that canal
related commerce could bring. They also demanded more direct benefits through the canal
annuity. Under the 1903 Treaty Panama received an immediate $10,000,000 payment, and
a United States promise to pay $250,000 in gold dollars each year. In the 1936 Treaty, as an
adjustment for the 1934 reduction in weight of the United States gold dollar, the annuity
was changed to $430,000. The annuity was increased to $1,930,000 in the 1955 Treaty.
However, Panamanians insisted that the amount was too low, and urged the United States to
raise tolls to allow higher annuity payments.
The changes made by the 1955 Treaty contributed to the economic up-swing that
began in Panama in the late fifties. To the Panamanians, however, progress in implementing
the provisions of the treaty seemed slow, and this was one of the major points of discussion
in the meetings between the two countries’ Presidents in 1962.
The cultural, political, and philosophical differences between those who came to
construct and operate the canal and those who were descended from the Spanish colonizers
may be more important than the economic considerations. The distinction between the
skilled workers, mostly from the United States, and the local laborers, from Panama and the
Caribbean, was also soon clearly drawn by the practice of paying the former in gold and the
latter in silver.
Even after the specie payment was abandoned, “gold†and “‘silver’â€â€™ signs directed each
class to separate public utilities, including drinking fountains, post office windows and rest
rooms. These signs were finally painted over in 1946. A carry-over from the old specie
payments was also seen in a double set of wage standards. Although Panamanians were
eligible for “United States rate’’ positions, most in fact worked in “‘local rateâ€â€™ jobs.
This dual payment system was considered by Panamanians to be a form of
discrimination against them in their own country. Provisions in the memorandum of
understanding annexed to the 1955 Treaty sought to establish equal employment conditions
for Panamanian and United States citizen employees of the United States Government in
the Zone. Separate rates of pay were abolished, and the right of Panamanians to compete
for jobs at all levels was recognized. The United States committed itself to creating training
programs to help qualify Panamanian employees for more responsible positions. For the last
several years increasing emphasis has been placed on providing employment opportunities in
higher paid positions to non-United States citizens. Since it would be uneconomical to
recruit unskilled employees from the United States, the lowest paid positions continue to be
filled by Panamanians.
Pressure Begins to Build
In the late 1950’s, United States policy came under increasing attack. In this rising
climate of anti-Americanism, Panamanians, particularly the student population, stepped up
their protests against the United States presence. In 1959 demonstrations were organized for
the first time against the Canal Zone. On Panama’s Independence Day, November 3, 1959, a
“sovereignty march†entered the Zone to plant the Panamanian flag. The demonstrators
were pushed back by Zone police and violence followed in the streets of Panama City.
I-15
The United States, which had granted substantial concessions in 1955, moved quickly
to cap the rising pressures building within Panama. President Eisenhower dispatched
Livingston Merchant as Special Ambassador to Panama. At a public ceremony, Ambassador
Merchant publicly voiced recognition of Panama’s “titular†sovereignty over the Canal
Zone. Efforts were made to reconcile Panamanian opinion and in September, 1960 the
United States agreed that Panama could raise its flag at one prominent place in the Zone to
symbolize Panama’s titular sovereignty. The flags of both countries were raised at Shaler
Triangle on November 25, 1960, but even this step was marred when the chiefs of the three
branches of the Panamanian Government declined to attend the inaugural flag raising
because a Panamanian was not allowed to hoist the flag.
The Kennedy Years
United States-Panamanian relations continued to be strained throughout the years of
the Kennedy Administration. In June of 1962 Presidents Kennedy and Chiari met, and
agreed to bilateral discussions to find those points of friction that could be resolved within
the framework of the existing treaty arrangements. The United States Ambassador to
Panama, Joseph Farland, and the Governor of the Canal Zone, Major General Robert
Fleming, were appointed to represent the United States at the discussions in Panama.
One of the few changes which was agreed upon was the use of the Panamanian flag
wherever the United States flag was flown. The new rule was adopted in steps throughout
the Zone, and in January, 1964 it was applied to the United States high schools in the Zone.
But in practice, it was decided that United States flags would no longer be displayed outside
the schools, in order to avoid the construction of a number of duplicate flag poles.
The 1964 Crisis
The youth of the two nations set the course of events. On January 7 the American
students of Balboa High School in the Zone ran the Stars and Stripes up the flag pole in
front of their school. The flag was taken down by school authorities, but the students ran it
up again. On January 9 a large group of Panamanian students entered the Zone determined
to raise the Panamanian flag in an equal position. A scuffle with the Zone police followed
and the Panamanian flag was torn.
A large Panamanian crowd claiming desecration of their flag formed along the Zone
border and for the next several days rioting in Panama City and Colon was marked by
attempted intrusions into the Zone by rioters, and sniping into the Zone by persons in
tenements across the border. The rioters, mostly students and laborers, were urged on by
radio and television, and by agitators. By January 12 when the rioting finally ended, there
were at least 18 Panamanians and four United States soldiers dead and more than 100
injured on both sides.
The government of President Chiari accused the United States of aggression, and broke
diplomatic relations. It demanded that an emergency meeting of the Council of the
Organization of American States be called as provided for under the Rio Pact, and also that
a meeting of the United Nations Security Council be convoked according to the United
Nations Charter. Later, Panama claimed that the United States had violated the Delcaration
of the Rights of Man, and appealed to the International Commission of Jurists.
1-16
The conclusions of the investigating committee appointed by the International
Commission of Jurists did not support the allegation that the United States had violated
various articles of the universal Declaration of the Rights of Man. Moreover, it regretted that
the Panamanian authorities made no attempt during the critical early hours, as well as for
almost three days thereafter, to curb and control the violent activities of the milling crowd.
But at the same time, it urged the United States to take effective steps to make possible a
reorientation and change in the outlook and thinking of the people living in the Canal Zone.
President Johnson, confronted with this crisis after only a month in office, dispatched a
special mission to Panama to encourage restraint and an end to the violence. He expressed a
willingness to discuss all issues, but only in an atmosphere of calm and reason. Though
diplomatic relations were resumed three months later, the ensuing period demonstrated the
depth of each country’s feelings and marked the gulf between them.
The Presidential announcement in December 1964 that the United States was prepared
to negotiate an entirely new treaty with Panama and that we should press forward with
plans for a sea-level canal signaled the beginning of a new stage in United States-Panamanian
relations.
1-17
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CHAPTER III
THE CASE FOR A SEA-LEVEL CANAL
The idea of a sea-level canal is not new. A sea-level canal across the American isthmus
that could safely and efficiently transit all the world’s ships has been a goal of canal planners
since the narrow crossings were discovered by Balboa four and one-half centuries ago.
The “battle of the levels†began in earnest in 1875, when Suez Canal builder Ferdinand
de Lesseps persuaded the International Congress for Consideration of an Interoceanic Canal
to vote to build a sea-level canal in Panama after a lengthy debate over the merits of a
high-level lock canal. Construction began in 1881, but the engineering and health problems
were overwhelming at the time. Mismanagement, disease, and impending bankruptcy led to
a reluctant switch to a more easily built lock canal as an attainable goal. Nevertheless, even
this reduced effort failed. In 1903 the historic objective of a sea-level canal was revived in
the United States. President Theodore Roosevelt’s Board of Consulting Engineers voted 8 to
5 for a sea-level canal, the Senate Committee on Interoceanic Canals favored a sea-level canal
by 6 to 5, but the Senate as a whole decided upon a lock canal by a vote of 36 to 31. While
acknowledging the ultimate desirability of a sea-level canal, the Senate chose to construct
the less costly lock canal initially.
Several recent major studies of the Panama Canal have continued to endorse the
long-range goal of a sea-level canal:
— In 1947 the Governor of the Panama Canal reported pursuant to Public Law 289,
79th Congress, which required a canal study, that: “a sea-level canal constitutes the only
means of meeting adequately the future needs of commerce and national defense, and such
a canal can be obtained most efficiently and economically by converting the present Panama
Canal to sea-levelâ€â€™.
— In 1960 the President of the Panama Canal Company reviewed the 1947 study and
recommended immediate investigation of the possibility of excavation of a sea-level canal by
nuclear methods. If the nuclear-excavation technology were not developed by the early
1970’s, he believed that plans should be made for the conversion of the existing canal to
sea-level by conventional methods.
— In its Report on a Long-Range Program for Isthmian Canal Transits in 1960, a
Board of Consultants to the House Committee on Merchant Marine and Fisheries concluded
that “‘the ultimate solution to the basic problem of increasing the capacity is probably a
sea-level canal, but its construction should await a traffic volume that can support the large
costâ€â€™.
President Johnson’s Decision
In March of 1964, President Johnson asked Congress for authority to conduct a new
sea-level canal study. A bill was approved in September as Public Law 88-609. On
December 18, 1964, the President announced his decision to begin international discussions
of the possible construction of a sea-level canal, and to negotiate new treaties with Panama
1-19
to replace the treaty of 1903. In his statement the President said: “So I think it is time to
plan in earnest for a sea-level canal. Such a canal will be more modern, more economical,
and will be far easier to defend. It will be free of complex, costly, vulnerable locks and
seaways. It will serve the future as the Panama Canal we know has served the past and the
present†The President’s decisions stemmed from an awareness that new treaties could meet
many of Panama’s aspirations in the Canal Zone and still protect United States interests in
the Canal.
A sea-level canal would require a direct operating staff of approximately 2200 persons,
of whom few need be skilled United States technicians. This compares with the nearly 5000
operating personnel of the present canal supported by some 10,000 additional Canal
Company and Canal Zone Government employees who provide the entire range of
community services to the canal operators and a large part of such services for the Zone’s
military bases. Some 5000 of this 15,000 total are United States citizens.
An alternative way to meet world trade demands of the immediate future would be to
add a third set of locks to the existing canal. Such a canal, however, would not
accommodate trade needs for the more distant future because of the number of ships that
are expected to seek passage. Moreover, it would increase the requirement for operating
personnel.
A sea-level canal, on the other hand, would under optimum conditions accommodate
world traffic for the foreseeable future and would permit a major reduction in personnel.
The less vulnerable and more easily defended sea-level canal offers significant political
advantages. It would permit greater United States flexibility in canal defense arrangements.
Should the United States decide to build a sea-level canal and to operate it in conjunction
with the lock canal, it would have to provide canal defense arrangements for both routes.
These arrangements should be possible with no increase in defense personnel.
I-20
CHAPTER IV
PANAMA AND A SEA-LEVEL CANAL
UNITED STATES—PANAMANIAN BILATERAL RELATIONS
Relations between the United States and Panama are concerned primarily with the
Panama Canal, which has been true ever since Panama attained its independence. The United
States interest is to guarantee the continued existence of an efficiently operated and
adequately defended interoceanic waterway that charges reasonable tolls and is open on a
non-discriminatory basis to the traffic of all nations. The Panamanian view is that its
geographic location, which makes a canal possible, is Panama’s greatest natural resource,
one it has the right to exploit in what it deems to be its own best interests. Striking a
mutually satisfactory balance between the differing interests of the two nations in the canal
is a primary concern of United States policy toward Panama.
After President Johnson’s statement of December 18, 1964, United States policy was
directed toward negotiating new treaties that would eliminate some of the causes of friction
over the existing canal and secure for the United States the right to construct a sea-level
canal in Panama. By June of 1967, United States and Panamanian negotiating teams had
reached agreement on three treaty drafts and referred the drafts to their respective
governments for consideration.
SUMMARY OF 1967 DRAFT TREATIES*
Lock Canal Treaty
The draft treaty covering the existing canal contains the following essential points:
1. Existing treaties would be abrogated.
2. The canal and all properties and adjuncts, and the administration of a reduced
“Canal Area†would be transferred to a bi-national Administration governed by a
Board of Governors composed of 5 Americans and 4 Panamanians appointed by
the respective Presidents for six-year terms subject to removal for cause by the
appointing Presidents.
3. Executive and legislative powers relative to the administration of the canal and
Canal Areas would be vested in the Joint Administration, subject to detailed treaty
provisions.
4. The Administration would have the right and power to set up a court of general
jurisdiction to deal with civil and criminal cases in the Canal Areas. United States
armed forces and their American civilian component would be subject to special
(status of forces) provisions under the Defense Treaty.
5. Panama would be sovereign over the Canal Area, subject to jurisdiction vested in
the Joint Administration in matters directly related to canal operations.
*It should be noted that the assumptions now adopted regarding the construction of a sea-level canal are different from
those which existed when the draft treaties were negotiated.
1-21
6. The United States Government, as such, would have no direct control over canal
operations or the Canal Area; it would have a one-man majority on the Board of
Governors of the Joint Administration, by virtue of the five members appointed by
the President on the nine-man Board.
7. The Treaty would terminate, and the canal and Canal Area become the property of
Panama, on December 31, 1999, or sooner if a sea-level canal were opened before
then, or no later than 2009 if a sea-level canal were under construction on
December 31, 1999. (Comment: If no sea-level canal were to be constructed the
existing canal would thus become Panamanian property on December 31, 1999.)
8. Panama would receive royalties paid from tolls, based on the amount of traffic
through the canal.
Sea-Level Canal Treaty
The draft sea-level canal treaty would in effect give the United States an option to build
a sea-level canal with certain essential terms to be arrived at through subsequent negotiation,
including financial arrangements, the use of nuclear excavation in construction, and the
identification of land areas. Additionally:
1. The option would extend for 20 years.
2. The United States would finance the canal but could, after consultation with
Panama, arrange for international and private participation.
3. The canal would be operated by an Interoceanic Canal Commission, governed by 5
Americans and 4 Panamanians as in the draft treaty for the present canal, with
provisions for additional members representing other financial participants, if any.
4. The treaty would terminate, if the United States exercised its option to build, 60
years after the sea-level canal was opened but no later than December 31, 2067,
and the canal and all related properties would revert to Panama.
Defense Treaty
The third treaty would establish defense bases in Panama from areas now in the Canal
Zone and would constitute, in effect, a status of forces agreement of the type negotiated
with other countries. Additionally:
1. The United States would provide for the defense, security and continuity of
operation of the existing canal, its related facilities, and the Canal Area, and of a
sea-level canal if built.
2. Defense bases would be made available for canal defense and related security
purposes.
3. The treaty would terminate 5 years after the lock canal treaty terminated, or
whenever the United States was no longer committed by treaty with Panama to
defend a canal in Panama, whichever time came later.
These treaty drafts have not been submitted for ratification by either country.
However, the initial United States commitment to undertake treaty negotiations has
brought about an improvement in United States-Panamanian relations since 1964.
1-22
ALTERNATIVE CANAL SITES IN PANAMA (Figure IV-1)
In his announcement of December, 1964 President Johnson listed four possible canal
routes for investigation: two routes in Panama, one in Colombia and one in Nicaragua-
Costa Rica. However, the routes of the most easily excavated conventionally constructed
canal, and of the shortest nuclear canal, are all located in Panama. After the investigation
began, another route in Panama was added. Routes 14 and 10 are in or near the Canal Zone
and would be excavated by conventional methods. Route 17 is in the Darien Region of
Panama, approximately 100 miles east of the present canal, and would be excavated
primarily by nuclear explosives utilizing conventional excavation for about 20 miles of its
length.
In addition, the Commission has explored two other possibilities. One would be the
construction of a third and larger lane of locks to augment the present canal. The second
is the possibility of a United States-Colombian-Panamanian canal on Route 23.
If a canal were constructed on Routes other than Route 14, there would be engineering
advantages to maintaining the lock canal in standby condition for an indefinite period. This
arrangement has been recommended in Annex V, Study of Engineering Feasibility.
Terminal Lake—Third Lane of Locks
There have been many proposals for increasing the capacity of the present canal. The
most promising are variations of two basic plans: the Third Locks Plan, and the Terminal
Lake Plan. The former was initiated in 1939 and discontinued during World War II after
expenditure of approximately $75 million on excavations for larger locks adjacent to the
existing locks. The new locks would have been 1,200 feet long, 140 feet wide, and 50 feet in
depth over the sills. Such locks would accommodate vessels of up to approximately 110,000
DWT and would increase the canal’s capacity to about 35,000 annual transits.
The Terminal Lake Plan would consolidate the Miraflores and Pedro Miguel Locks on
the Pacific side, raising Miraflores Lakes to the level of Gatun Lake. In the process a third
lane of locks would be added on both the Atlantic and Pacific sides. This plan has the
advantage of providing an anchorage area above the Pacific locks which would eliminate
navigational hazards now encountered in that area.
The proponents of the third lane of locks concept believe it has a major political
advantage, namely, that it can be built under the provisions of existing treaties. The
Panamanians oppose this view, although they agreed in a 1939 exchange of notes clarifying
the 1936 Treaty that the United States could undertake additional construction—and we, in
fact, did.
The limitations of the third lane of locks solution are significant. A third lane would
provide approximately 8,000 additional annual transits.* At the projected traffic growth
rates, this new capacity could be exceeded as early as 2000, and additional expansion would
presumably be needed. The third lane would meet traffic requirements through that year at
the least cost to the United States, but this is its only major advantage in comparison with
the sea-level canal alternatives. Lack of sufficient water from Gatun Lake for additional
locks poses a limitation that can be met by costly pumping of sea water. This solution
*From a base point of 26,800 annual transits, the maximum capability of the present canal.
I-23
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1-24
would cause Gatun Lake to become brackish. Recirculation of fresh water used in the locks
is another solution, but one which is more costly still.
The third locks solution creates an additional requirement for skilled operating
employees and continues the existing lock canal’s inherent need for a large number of
United States management personnel and technicians. While this can be overcome in time
through internal training and promotion of Panamanians, the rapidly expanding Panamanian
economy would compete for the same skills.
Route 14
Route 14 runs generally along the existing lock canal alignment and lies entirely within
the Canal Zone. Its land cut is 33 miles, and its Atlantic and Pacific approaches, leading
from the land cut to water 85 feet in depth, total 21 miles. The estimated construction cost
is $3.0 billion.
The trace of Route 14 is generally east of the existing canal on the Atlantic side of the
Isthmus. Route 14 intersects the existing canal near the southeast end of Gatun Lake, and is
generally west of it from there to the Pacific.
Panama City on the Pacific terminus and the towns of Colon and Cristobal on the
Atlantic terminus are available to support the construction, operation, and maintenance
effort of Route 14.
As an alternative to the trace of Route 14 through the Continental Divide, a separate
divide cut would be aligned to diverge from Route 14 in the Continental Divide region. The
separate Divide cut would minimize the probability that construction operations would
endanger the stability of the banks of the existing canal. Further discussion of Route 14 in
this Annex will refer to this separate Divide cut alignment.
Gatun Lake, which has an area of about 165 square miles, is an integral part of the
existing canal. It is formed by waters impounded by Gatun Dam. Gatun Lake provides water
for the lockage of ships through the existing canal and is also used for hydroelectric power
and municipal water supply.
Gatun Lake would be divided by Route 14 and would require dams to protect against
runoff of the lake into the sea-level canal. After construction, the most economical level for
water in the lake would be at about elevation fifty-five feet, which is twenty-seven feet
below its low level for operation of the existing canal. This would reduce the hydroelectric
supplies available to Panama, but the absence of locks would reduce the operational
requirement for electricity and eliminate the need for lockage water.
There are several construction problems of foreign policy interest associated with Route
14. One problem which is unique to Route 14 would be interference with canal traffic
during construction. Route 14 would have a period of one to three months when it would
be necessary to draw down from the level of Gatun Lake. This drawdown would permit the
water level in the new canal to seek its final elevation at sea level. Canal closure would be
announced well in advance but there would be major inconvenience to world shipping
nonetheless.
The magnitude and composition of the construction force required for Route 14 also
could have foreign policy implications. During the sixteen year design and construction
period construction personnel would build up to over seven thousand during the fifth, sixth,
and seventh years. The construction force would then taper off to about two thousand
1-25
during the fifteenth and sixteenth years. Although considerable use would be made of
Panamanian labor, a large portion of the construction force would probably be United
States citizens under the employ of United States contractors. The acquisition of real estate
for Route 14 would not be expected to have a large dollar cost since construction would be
on land within the existing Canal Zone.
The operation of a sea-level canal along Route 14 would be considerably simpler than
the operation of the existing lock canal. It is estimated that about 2200 canal employees
would be required, a major portion of whom at least initially would be United States
personnel.
Route 10
Route 10, the Chorrera-Lagarto Route, begins at the village of Lagarto, about fifteen
miles west of Colon on the Atlantic coast. It extends to the southeast across the Trinidad
arm of Gatun Lake and the Continental Divide to its Pacific terminus near the town of
Chorrera. Route 10 is generally parallel to the existing lock canal at a distance of about ten
miles from the canal. It intersects the Continental Divide eight miles from the Pacific, where
the elevation is about 430 feet above mean sea-level. The area between the Pacific Ocean
and Gatun Lake is generally rolling country while the area between Gatun Lake and the
Atlantic is lower but quite rugged.
The area traversed by most of Route 10 is relatively undeveloped. The coastal towns are
accessible by highway but the interior roads are poor.
The overall length of Route 10 is about fifty-three miles, including ocean approaches.
The cost of construction is estimated to be about $2.9 billion. The land cut of Route 10 isa
little longer than Route 14 and greater excavation yardage is involved; however, Route 10
permits the use of less costly excavation methods. A larger range of choice in construction
equipment is possible on Route 10 where there are no construction restraints imposed by
existing structures or canal traffic.
Route 10 generally would avoid Gatun Lake, except for the Trinidad Arm and the
smaller Cano Quebrado Arm. Dams along that portion of Route 10 which traverses Gatun
Lake would be shorter than along Route 14. Construction and operation of Route 10 would
not interfere significantly with maintenance of Gatun Lake at its present elevation, and thus
would not affect the hydroelectric supply significantly.
Among the problems of foreign policy interest associated with Route 10 are those of
land acquisition and the possible operation of the present lock canal and a sea-level canal as
a single system.
Land acquisition problems for Route 10 would be more extensive than for Route 14.
The acreage of land required for construction, operation and maintenance of a sea-level
canal would not be greater in the case of Route 10 but acquisition would involve land
outside of the Canal Zone at a higher unit cost. The land near La Chorrera is well-developed
farming and grazing area. Canal construction would displace approximately two thousand
Panamanians but would not necessitate the relocation of the town of La Chorrera. Land
acquisition on Route 10 could prove to be a greater problem than on the other routes.
A canal on Route 10 would have a lesser negative economic impact on the cities than
would construction on Route 17 or a canal outside of Panama. Some of the impact of
closing or reducing the use of the existing lock canal would be offset by construction of new
I-26
facilities on Route 10. These facilities would probably employ about 2,200 personnel, the
same number who would be employed on a sea-level canal along Route 14. The net impact
would be a reduction of over two thousand operating and maintenance personnel and a
proportionate decrease of about 4000 supporting personnel compared with the existing
canal. The work force required to construct Route 10 would be comparable to that required
for Route 14.
Operation of a sea-level canal on Route 10 in combination with the lock canal would
allow at least 65,000 transits per year. Conversion of the lock canal to a second sea-level
canal, a possible means of expansion, could be deferred well into the next century. Two
sea-level canals could have a combined capacity of over 100,000 transits per year, a level not
likely to be required for well over a century.
Route 17
The feasibility of nuclear excavation is the key to the feasibility of Route 17. The two
issues interact, since not only does Route 17 mean nuclear excavation—but nuclear
excavation entirely within Panama must mean Route 17.
The route is located in the Darien isthmus of Panama, where Balboa crossed in 1513.
The route connects Caledonia Bay, an arm of the Caribbean Sea, and the Gulf of San
Miguel on the Pacific Ocean. The Continental Divide is about ten miles from the Atlantic
side of Route 17. Peaks rise well over a thousand feet. A crossing has been located at an
elevation of about 1000 feet. The length is about forty-nine miles of land cut plus almost 30
miles of ocean approaches.
In the Darien region there is a complete absence of roads or railroads which could be
used to support the construction of a canal along Route 17. This problem would be
alleviated by construction of the Inter-American Highway through the Darien Gap, a project
now in advanced stages of planning. The principal means of transportation into the interior
have been by boat, foot, or aircraft.
The estimated cost of Route 17 is about $3.1 billion, assuming nuclear construction to
be feasible. This includes the cost of excavating about 20 miles by conventional means
because of potential slope stability problems in the area. The cost of conventional
excavation of the entire route would be prohibitively great, approximately $6 billion.
Lands affected, some privately owned, are largely undeveloped at present. There are
squatters living by subsistence farming throughout the area.
Route 17 offers several advantages for construction compared with the other routes in
Panama. These advantages derive primarily from the distance separating Route 17 from the
existing canal. There would be no interference imposed by Route 17 construction on the
traffic in the existing canal. The size of nuclear charges would be limited to preclude
significant damage due to ground shock to built-up areas such as Panama City.
The magnitude of the construction force would be less for Route 17 than for Routes 10
and 14. During the 16-year design and construction period construction personnel would
build up from about one thousand the first year to four thousand during the second and
third years. The construction force would average two thousand personnel during the last
four years of work.
There are construction problems of foreign policy interest associated with Route 17.
Danger to and disruption of lives must be taken into consideration. It would be necessary to
27
evacuate inhabitants of the immediate area of the nuclear excavation reaches on Route 17
during construction. This exclusion area is one of the most primeval and sparsely populated
in Central America. The population within the nuclear exclusion area is estimated at 43,000,
mainly tribal Indians and others living in small settlements or as migrants. Nuclear
excavation would yield a 1,000-foot wide channel capable of handling the largest potential
traffic.
Route 23 (Figure [V-2)
On September 14, 1969 there was a joint declaration by Panamanian Foreign Minister
Nander Pitty and Colombian Foreign Minister Alfonso Lopez Michelsen recognizing a
common interest in a sea-level canal along Route 23, and in other possible routes as well.
Route 23 follows Route 25 along the Atrato River in Colombia about 30 miles. Then it
turns northwest into Panama and enters the Pacific at the Gulf of San Miguel near the
Pacific end of Route 17. Its total length is 146 miles including 27 miles of ocean
approaches. The highest elevation encountered is about 450 feet as compared to 930 feet on
Route 25 and 1000 feet on Route 17. The 1947 studies found many technical and cost
disadvantages due to length and excavation volume, and excessive angularity.
Route 23 would contribute greatly to the growth of an isolated and under-developed
area of the country and would be consistent with Colombia’s moves toward regionalism and
close cooperation with its neighbors.
All Panamanian arguments against excavating a canal far from present population
centers are applicable. Also, Panama would have to share benefits from the canal with still
another country.
DEFENSE CONSIDERATIONS
The defense of a sea-level canal will pose political problems regardless of the country in
which it might be located. In Panama the political problem of defending a new canal differs
for each of the three routes being studied. There follows a discussion of the problems of
defense of each route.
Route 14
Defense of Route 14 would probably cause the least problems in the short run. The
United States base complex for this route is already in existence, and there would not be the
reaction associated with the initial introduction of a foreign military presence.
Over the long run the defense forces for Route 14 have the disadvantage of being very
much in the Panamanian eye. Major military installations are located in the immediate
vicinity of Panama’s two largest urban centers, Panama City and Colon. As the United States
presence in Panama diminished under the new lock canal treaty, and even more so under a
sea-level canal administration, a continued major United States military presence, so close to
urban centers, could attract criticism.
The local defense troop requirements for a sea-level canal along Route 14 are currently
estimated at somewhat less strength than presently required in the Canal Zone.
1-28
| FIGURE IV-2
CARIBBEAN SEA
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DEPTHS IN FATHOMS
Route 10
The considerations which apply to the defense of Route 14 are in general applicable to
Route 10. Defense forces would be approximately the same and could be permanently
stationed in the present Zone base complex. New military construction would be slightly
larger than for Route 14, or in the vicinity of $13 million. It would be necessary to assure
access to the Canal Area. To do this, a minor United States military presence would have to
be established in a new area of Panama. This would probably be more troublesome on the
Pacific than the Atlantic side since the Pacific side is a well-developed farming area.
Since the base structure would remain almost completely intact, there would be no
lessening of the problem associated with a large United States presence near the population
centers of Panama City and Colon. There would be some reduction in troop strength needed
for defending the less vulnerable sea-level canal.
Route 10 Operated with the Lock Canal
The defense advantages of a sea-level canal on Route 10 have been discussed above.
These advantages would be somewhat greater in the canal system as envisioned; the present
canal would be usable if the sea-level canal were blocked. Defense of the standby canal
should cause no major additional problems. The existing military bases are already suitably
sited, and the forces planned for the defense of Route 10 could, with acceptable risks,
provide protection for the standby facilities.
Route 17
All but twenty miles of a canal on Route 17 would be constructed with nuclear devices.
This canal would be less vulnerable to attack than any conventionally constructed canal,
primarily because the nuclear canal’s greater depth would make it relatively invulnerable to
blockage by the sinking of ships.
Route 17 would require considerably more military construction than either Routes 14
or 10. Estimated cost of construction, including troop facilities, the road net, and high
performance aircraft landing fields is approximately $125 million. The forces required
would be substantially the same as for Routes 14 or 10.
Route 23
The defense of a sea-level canal constructed on Route 23 would raise complicated
questions for the United States, Panama and Colombia. Route 23 would be the most
difficult to defend of all the routes under construction due to its greater and winding length.
Canal defense requirements would thereby be more complex. Military construction costs
would also run higher than for the other routes.
Terminal Lake—Third Lane of Locks
One of the greatest disadvantages of the third lane of locks solution is that it would not
reduce materially the vulnerability of the lock canal to long-term interruption by sabotage
or military attack.The inability to transit the United States Navy’s aircraft carriers and the
weaknesses of the locks and of the high level lake would remain unchanged.
1-30
ECONOMIC CONSIDERATIONS
Economic Impact of the Canal on Panama
Activities associated with the Panama Canal along with United States military activities
in the Canal Zone have played a major role in the economic development of the Republic.
The Republic itself has a private enterprise economy within a land area about 480 miles
from east to west, which varies in width from 30 to 120 miles. Its population is presently
estimated at 1.4 million, of whom 48% live in towns containing 1,500 inhabitants or more.
This is the smallest population of any independent country in Central America with one of
the lowest population densities. About 85% of the population is literate.
The land area of Panama is divided into two almost equal parts by the ten-mile-wide
Canal Zone. Although the Zone is under the jurisdiction of the United States Government,
the Republic of Panama has free transit rights across it without customs or other
restrictions. Almost all of the nonagricultural activity of the country takes place in the
Colon and Panama City areas, adjacent to the Zone. David, the third largest city, is the
center of Panama’s principal agricultural and cattle area. The area to the east of the canal
consists primarily of undeveloped swamp, forest, and some farm land.
The Panamanian monetary system is based on the United States dollar to which the
Balboa is pegged at a one to one ratio. The monetary agreement of 1904 between the
United States and Panama provides the basis for the quantity and content of the
Panamanian currency. Although prices and accounts in Panama are stated in Balboas, issue
of the Balboa is limited to the silver Balboa and subsidiary coins. United States currency
circulates freely and is the principal medium of exchange. Banks hold dollars to satisfy legal
reserve requirements. Thus, both government expenditures and domestically financed
investment expenditures are closely tied to the amount of foreign exchange available to the
economy. The government is circumscribed in its ability to increase the money supply at its
discretion to finance its own spending, except by borrowing.
Panama is greatly dependent on imported goods and has had a continuing and widening
negative balance of trade. This imbalance has been covered mainly by the inflow of private
capital and by external borrowing. Private investment cannot directly be expanded by
domestic borrowing because the lending ability of banks depends on their dollar position.
However, private investment can be expanded through external borrowing. Thus, the
expansionary effects that government or private investment spending might have are limited
to—and can be summarized by—the amount of external financing that can be obtained.
Dollar availability is, therefore, the crucial factor in the country’s economic expansion.
The canal operation and activities associated with it are by far the largest single source
of dollar earnings with the total of net exports of goods and services due to the canal and
United States military activities estimated by the Stanford Research Institute as comprising
66% to 75% of all earnings from the export of goods and services. United States military
activities in the Zone account for 35% to 38% of the combined canal/military total above.
Canal related earnings in turn exert a multiplier effect of between 1.13 and 2.77 on overall
national income levels.
The economic impact of the canal is particularly significant in the Panama City and
Colon metropolitan areas. There, employment for about 22,300 (12.5% of total
employment) is provided directly by the Zone. Since the average wages of most workers in
I-31
the Canal Zone are significantly greater than the wages of the average metropolitan worker,
the income of the former plays an even more important role. If the indirect effect of this
direct foreign exchange input is taken into account, it is estimated that about 74% of the
total employment of the metropolitan area would directly and indirectly be due to the
canal.
Tables [V-1 and IV-2 provide data on gross payments and income flow directly to the
Republic of Panama from the Canal Zone and on salaries and net income of non-United
States citizen employees of the Canal Zone resident in Panama.
TABLE IV-i
ESTIMATED GROSS PAYMENTS AND INCOME FLOW TO THE
REPUBLIC OF PANAMA FROM THE CANAL ZONE
(1967 and 1968)
(In Thousands of Dollars)
1967 1968
(preliminary)
. Wages and salaries paid to Panamanian
residents employed in the Canal Zone
. Retirement and disability payments to
Panamanian residents
. Direct purchases in Panama by U.S.
Government Agencies
a) Goods
b) Services
. Purchases of goods in Panama by private
Organizations operating in the Canal Zone
a) Petroleum products
b) All other goods
. Contractors’ purchases in Panama of goods
and services for Canal Zone projects
. Expenditures made in Panama by residents
of the Canal Zone
Sub-T otal
. Panama Canal Annuity
Explanatory Notes
Item No.
1. Gross payrolls, non-U.S. citizen residents of Panama employed in the Canal Zone
by U.S. agencies, contractors, and private organizations (e.g., shipping agents,
I-32
TABLE IV-1 (Cont’d.)
clubs, churches, oil companies, banks, employee associations). Does not include
wages of Panamanian residents employed by private individuals and households;
the latter are included in the estimates given in Item No. 6 below.
2. The sum of disability and relief payments to Panamanians by Panama Canal
Company/Canal Zone Government and retirement checks distributed to Pana-
manians by United States Embassy, Panama.
3. Aggregate amounts of goods and services purchased in Panama by U.S. agencies
Operating in the Canal Zone as reported quarterly by the respective agencies.
4. (a) Figure supplied by Office of Comptroller General of the Government of
Panama.
(b) Estimated on the basis of sample surveys.
5. Estimated on the basis of sample surveys.
6. Expenditures for goods and services purchased in Panama by U.S. and non-U.S.
citizen residents of the Canal Zone including wages paid Panamanian residents
employed in the Canal Zone by private individuals and households. Estimated on
the basis of sample surveys.
TABLE IV-2
SALARIES AND NET INCOME OF NON-U.S. CITIZEN
EMPLOYEES OF THE CANAL ZONE RESIDENT IN PANAMA
(1967 and 1968)
(In Thousands of Dollars)
1967 1968
(preliminary)
Gross Salaries Received From
U.S. Agencies
Contractors
Private Organizations
Less
Deductions for retirement funds
Expenditures for:
a) Hospital Fees
b) Transportation and
Service Center Fees (1)
Net Income
NOTES:
(1) Expenditures at service centers represent authorized purchases of small articles,
such as meals, candy, chewing gum, tobacco and similar articles.
Data do not include the earnings of non-U.S. citizen employees resident in the
Canal Zone.
1-33
OTHER ECONOMIC OPPORTUNITIES
Normal Economic Development
Panama’s economic growth for the period 1961-68* shows an average annual increase in
the Gross Domestic Product (GDP) of 7.5%—the highest rate achieved by any country in the
hemisphere. The steadily rising demand for goods and services by the Canal Zone and to a
lesser extent by the Colon Free Zone has played a key role in stimulating domestic
investment and export-oriented activities. During the period 1960-68, earnings from the
Canal Zone increased on the average by 10.1% per annum. Thus the importance of the Canal
Zone and related activities to the continuing growth of Panama’s economy is unquestioned.
Future growth, however, will also depend to an important extent on three additional
factors:
(1) Panama’s ability to maintain and increase its present exports to areas other than
the Canal Zone:
(2) the promotion of new exports and services; and
(3) the maintenance of high levels of domestic investment.
(1) Ability to Maintain and Increase Present Exports:
Bananas: Bananas are Panama’s principal export, accounting in 1968 for 54% of the
country’s visible exports. Assured of foreign markets and favorable prices, banana
production has grown at a yearly average of 12% during the 1961-68 period. The Chiriqui
Land Company, a United Fruit Company subsidiary which is the principal banana exporter,
expanded its area of activities substantially in 1966 and is now considering doubling its
operations by 1973.
Petroleum Products: Since the beginning of operations of the petroleum refinery in
1962, exports of refined petroleum products to ships transiting the canal as well as to the
world market have achieved increasing importance. In 1968 such exports amounted to
about 20% of total exports. The refinery increased its capacity in 1968, which allows it to
increase exports further. In addition, construction of a multi-million dollar petrochemical
complex is under active consideration. The new plant will greatly expand the export
potential of Panama’s petrochemical industry. Panama has no known petroleum resources
and all crude petroleum is imported.
There has also been discussion in Panama of constructing a transisthmian pipeline to
transport bulk shipments of crude petroleum from tankers on the Pacific side of the Isthmus
to ones on the Atlantic side.
*For consistency, all figures used in this section end with calendar year 1968.
1-34
Shrimp: Exports of shrimp have risen steadily between 1963-68, though at a
decreasing rate of growth, and in 1968 constituted about 11% of total exports. The slow
growth was due to supply limitations rather than a lack of markets, and the Secretariat of
the Inter-American Committee of the Alliance for Progress (CIAP) has recommended that
possibilities be studied to increase the catch of shrimp.
Sugar: In 1968 sugar exports amounted to 32 million tons, virtually equal to the
United States sugar quota for Panama. Sugar at the present time constitutes Panama’s fourth
most important export, and in 1968 amounted to about 5% of total export.
(2) Promotion of New Exports and Services:
Tourism: Tourism is an important earner of foreign exchange, accounting in 1968 for
about 23% of Panama’s net foreign exchange earnings in its balance on goods and services.
In 1968 travellers from the Canal Zone accounted for more than two-thirds of these
earnings, but in previous years earnings from foreign countries more nearly equalled the
tourist earnings from the Canal Zone. At the present time Panama has an estimated 100,000
visitors a year, but plans are under way to double this number within the next few years. It
is considered that the estimated 250,000 transit passengers through Panama each year
constitute a good potential for achieving this goal, and projects are under way to expand
and improve services at Tocumen International Airport, increase the country’s hotel room
capacity and develop new tourist attractions.
Meat and Livestock: In 1968 the value of livestock output amounted to $25 million
and represented about 17% of Panama’s agricultural production. Exports of meat and
livestock amounted to only $1.7 million. With the expansion of livestock production, which
increased by 50% between 1961 and 1968, possibilities for a gradual rise in exports appear
good. The CIAP Secretariat estimates that by 1971 exports of meat products and livestock
will amount to $4 million.
Fishmeal: The CIAP Secretariat projects a rapid growth of exports of fishmeal,
reaching $8 million in 1971.
Citrus Products: Exports of citrus products are a new addition to Panama’s foreign
exchange earnings. Citricos de Chiriqui, S.A., which has been preparing its plantations and
other facilities since 1964, was scheduled to begin exporting fruit and juice in 1968.
However, technical problems continue to thwart production and it appears increasingly
unlikely that CIAP Secretariat projections for exports amounting to $4 million by 1971 will
be met.
1-35
(3) Maintenance of High Levels of Domestic Investment:
Domestic investment levels as a percentage of the Gross Domestic Product hovered
around 20% per annum for the 1961-68 period. Most of this high rate of productive activity
in the economy was generated by the private sector, which in 1968, for example, accounted
for 82% of total investment outlays. The investment boom of the 1960’s resulted from a
high rate of domestic savings, supplemented by capital inflows from abroad, mostly on
private account. Since 1968 the public sector has sustained the high investment level. On the
basis of recent government plans and statements, it may be assumed that public sector
investments will continue to increase rapidly over the next few years.
Darien Highway
The Darien Gap Highway is the last unfinished link of a Pan American Highway
network connecting the South American continent with Central and North America. The
project has been under study for some 15 years by the Darien Sub-Committee of the Pan
American Highway Congress. The Subcommittee has prepared estimates for the construc-
tion of 401 kilometers of road, 320 of which are in Panama and 81 in Colombia. The
currently estimated cost of an asphalt-paved road is $150 million over a five-year
construction period. President Nixon has indicated United States willingness to provide a
substantial portion of the funding for the project and an appropriation is now being sought
for this purpose.
No detailed study has yet been made of the implications for the Panamanian economy
of constructing the Darien highway. Its value would obviously be enhanced were it to serve
as a link to a canal on Route 17.
Various reports, however, describe the Darien region as rich in commercially exploitable
timber resources, suitable for banana plantations, and potentially attractive for international
tourism. As to the economic impact of the construction as such, we believe it would be
highly favorable.
Mineral Deposits
Simultaneous announcements from the United Nations Development Program and the
Government of Panama in April 1968 revealed the discovery of copper and molybdenum in
Panama in sufficient quantities to justify more extensive exploration efforts. Estimates of
the extent and value of the initial find in the Donoso District of the Province of Colon vary,
with optimists putting its potential in the ‘‘multi-million dollar range,†while some mining
officials contend they will need considerably more information before they decide if the
copper is worth the expense of digging it out. The area of the discovery is one of intense
rainfall and tropical growth, about 15 miles from the Caribbean Sea. Thorough exploration
of the site is expected to cost $5-$10 million.
1-36
Additional copper discoveries were announced in a region adjacent to the original find
in January 1969. The United Nations and the Panamanian Department of Mineral Resources
have extended the original exploration and have announced approval of a second project for
the central range. While these minerals could prove to be a resource capable of
supplementing the canal in importance to Panama, their worth and exploitability remain to
be established.
Regional Economic Integration
One way of broadening the economy’s base would be for Panama to associate itself
with one of the regional trading groups, such as the Andean Group of the Latin American
Free Trade Area (LAFTA), the Central American Common Market (CACM) or the proposed
Caribbean Trading Group (CARIFTA).
Three major obstacles to Panama’s entry into a regional market are: (a) the strong
attraction to foreign imports of Panama’s higher-income, commercial market; (b) the
potential loss of some benefits from Panama’s predominant position in the canal market;
and (c) the Panamanian monetary system.
UNITED STATES PRIVATE INVESTMENT AND TRADE
WITH PANAMA
Panama has continued to attract a share of direct United States private investment in
Latin America disproportionate to its population and size. Of the approximately $13 billion
total of United States private investment in 19 Latin American republics in 1968, $922
million was located in Panama. The three major areas of direct United States investment
are local trade, agriculture and petroleum refining. There are considerable individual
investments in telecommunications, electric power, and banana plantations. In addition,
more than 200 United States firms use the Colon Free Trade Zone for manufacturing,
processing, warehousing and trans-shipping goods to Latin America. United States interests
in the petroleum, mining, power, and hotel industries will provide areas for continuing
direct private investment in the future.
The United States is Panama’s principal trading partner. In recent years the United
States has taken about 60% of Panamanian exports and has supplied about 40% of its
imports. Bananas, shrimp, and refined petroleum products are the principal exports. In real
terms, the value of trade with the United States reflects the republic’s overall excess of
imports over exports, with Panama’s exports to the United States totalling $73.1 million
and her imports from the United States reaching $93.5 million in 1968.
I-37
UNITED STATES ECONOMIC ASSISTANCE TO PANAMA
The Agency for International Development’s technical and economic assistance to
Panama since the inception of the Alliance for Progress (FY 1961-FY 1969) totals $137
million, averaging about $15.2 million per year. About $35 million of this amount has been
in grants, the rest in long term development loans. On a per capita basis, this represents one
of the highest outlays of United States assistance in the world.
ECONOMIC IMPACT ON PANAMA OF ALTERNATIVE ROUTES
The principal economic issues that would be created for Panama by the construction
and operation of a sea-level canal are: (a) inflationary pressures during the construction
period of a sea-level canal in Panama; (b) deflationary pressures when a sea-level canal
becomes operational; and (c) the shift of certain activities from the Panama and Colon areas
to the Darien Region if a sea-level canal at Route 17 were opened. Following is a summary
of the findings of the Stanford Research Institute’s study of economic implications of
alternative sea-level canals as they apply to these issues. These findings are summarized in
Figure IV-3 and IV-4 and Tables IV-3 and IV-4. For analytical purposes it was assumed that
a sea-level canal or a third lane of locks would commence operations in 1985.
(a) Inflationary Pressures During Construction
The construction of a sea-level canal combined with increased benefits from the existing
canal* would have a limited inflationary impact on the economy. In peak construction
years, the levels of Gross Domestic Product (GDP) relative to the levels without
construction (but with increased benefits from the existing canal as contemplated in the
1967 treaty drafts) are estimated as follows:
Route GDP Employment
10 410.5% 47.6%
14 410.3% 48.1%
A 411.6% 49.5%
3rd Locks 4+ 6.3% 46.2%
Given the normal “slack†existing in a country such as Panama, the impact of
construction expenditures would have a buoying effect which could be handled without
undue inflationary pressure. However, there is good reason to believe that something less
than the normal amount of slack will exist during the peak construction periods. The rapid
increase in GDP which occurred in the 1960’s is expected to continue into the 70’s. The
foreign exchange earnings resulting from construction as well as additional earnings from
any new treaties would have a multiple effect on GDP. Even this inflationary pressure,
however, will tend to dissipate itself in the form of increased imports because of the lack of
barriers to trade in the economy.
*The Stanford Research Institute based its projections of revenues from the existing canal on the assumption that
provisions such as those contained in the 1967 treaty drafts would be yielding increased revenues to Panama.
1-38
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The important constraint in Panama is the effective size of the labor force. In boom
periods people are drawn into employment who were never officially considered part of the
labor force. Half of Panama’s population is still in the rural sector; one would imagine a very
large pool of usable labor to exist there. Taking the potential as well as officially projected
labor forces into account, there would probably be sufficient manpower available to meet
not only the construction needs, but also the needs of a greatly expanding domestic
economy. It should be noted, however, that the labor force as officially projected would not
itself be sufficient to meet these demands fully.
(b) Deflationary Pressures when Operation Begins
The opening of a sea-level canal would impose very slight deflationary pressures as
compared to levels during construction in the cases of Routes 10, 14 and 17. If the sea-level
canal were operated in Colombia on Route 25, there would be a drastic reduction of GDP in
Panama. The opening of an enlarged lock canal, or of a canal system including the sea-level
canal on Route 10, would actually provide higher levels of income than existed during
construction.
GDP levels, once a sea-level canal is in operation in Panama, would, except as noted
above, tend to return from the abnormally high levels during construction to a level much
closer to that which would prevail with the lock canal. In most operational years GDP
would be greater than it would be with the lock canal.
In the case of either Routes 10 or 14, GDP might be about $16 million per year less for
the three years immediately following completion of construction than GDP would have
been with a continuation of the lock canal. Over the same three-year period, GDP with
Route 17 would be a maximum of $29 million less per year. These decreases in GDP relative
to conditions under the lock canal would all be temporary and would amount to only one
percent or less of the total GDP.
For the enlarged lock canal the excess of GDP relative to the projection without a new
canal ranges from about $140 million in 1985 (6.2%) to about $252 million in the year
2000 (5.8%). For a canal system utilizing Route 10 and the lock canal the excesses range
from about $143 million in 1985 (6.3%) to about $228 million in the year 2000 (5.2%).
Employment levels would tend to follow the same patterns of change. These predictions
assume that a sea-level canal would be accommodating greater traffic than a lock canal
which would have reached capacity in 1985.
If a sea-level canal were operated in Colombia along Route 25, Panama’s GDP is
predicted to drop about 26% below the projected GDP under the present lock canal. A very
significant lower level of employment would occur if the canal were to be located in
Colombia. It is estimated that the employment level in Panama would be 33% lower than it
would be with a continuation of the existing lock canal alone, assuming that there are no
efforts by the Panamanian government beforehand to compensate for the impact.
(c) Economic Dislocation Caused by Route 17
The total employment level of the Republic is estimated to be about 1.2% lower with a
canal on Route 17 than that without a sea-level canal. It would be about 13% lower in the
1-41
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1-42
TABLE IV-4
SUMMARY OF PROJECTED CHANGES IN
PANAMANIAN EMPLOYMENT BY THE PCC/GOVERNMENT
AND U.S. MILITARY AND IN FOREIGN EXCHANGE* THAT WOULD RESULT FROM
THE PROPOSED TREATIES AND CANAL ALTERNATIVES
(Income in Millions of Dollars at Current Market Prices)
Canal Tonnage
(millions)
Both Enlarged Lock Canal Lock Canal and Route 10
Present New Employ-
; Employ-
Lock Alter- —_ Foreign Exchange
Pent Foreign Exchange
Year Canal natives (000)t Direct Royalty ~ Other Total (000)t Direct Royalty Other Total
*Foreign exchange attributable to the canal from the sale of goods and services. Capital inflows not included.
+Direct Panamanian employment of PCC/government (Canal Administration) and U.S. military.
Foreign exchange directly from PCC/government (Canal Administration) and US. military.
Source: Stanford Research Institute.
1-43
Panama-Colon metropolitan area. One reason for the lower level in the Route 17 case is that
there would be a shift of about 41,600 employed persons from the metropolitan area to the
Darien area. In terms of GDP the total amount of activity that would shift to the Darien
region is estimated to be about $284 million. Substantial programs to mitigate the adverse
economic impact on the Colon-Panama area would be required by such a shift.
The economic role of the United States military in Panama is projected by the Stanford
Research Institute’s study as decreasing during the operational years of a sea-level canal in
Panama, although it will still be significant. It is estimated the United States military will
account for about 9% of the total GDP at the time of completion of the canal, decreasing to
about 7% in the year 2000, for any of the routes in Panama.
POLITICAL CONSIDERATIONS
The Panama Canal is a key element in Panama’s political life. It has helped shape the
structure of the country’s society and set the pattern of its economy. As Panama’s primary
source of income, the canal largely determines the total amount of economic resources
available for allocation. As the single most important stimulus to Panamanian nationalism,
the canal is also a readily exploitable emotional issue. Thus, the replacement of the existing
canal by a sea-level canal would be a matter of profound importance to Panama’s future.
Panama’s attitude toward a sea-level canal will inevitably be shaped by past experience
with the existing canal. Most Panamanians are convinced that the United States has not
dealt fairly with their country on the Panama Canal. In negotiating an agreement on a
sea-level canal, Panama may be expected to place special emphasis on such issues as
jurisdiction and economic benefits. Yet, although there are a number of potentially
troublesome political problems involved in obtaining suitable new treaty terms with
Panama, there are also many considerations which work in favor of United States-
Panamanian agreement.
1-44
CHAPTER V
SITING A CANAL OUTSIDE PANAMA
PROBLEMS CREATED BY CONSTRUCTION OUTSIDE PANAMA
A decision by the United States to construct a sea-level canal somewhere outside
Panama would confront this country with a major diplomatic and political problem with
Panama. The canal is so essential to Panama’s economic well-being that even the prospect of
its effective removal would result in an immediate downturn in the country’s growth; actual
siting of the canal elsewhere would result in the collapse of the urban economy. The almost
total dependence of Panama’s urban centers on the canal is illustrated by the fact that
nearly seventy-five percent of urban employment is related directly or indirectly to the
waterway.
COLOMBIA AND A SEA-LEVEL CANAL
Discussion of Possible Routes
Route 25 (Figure V-1)
Route 25, considered for construction by a combination of nuclear and conventional
methods, is located in the northwestern region of Colombia near the border with Panama.
The route is approximately one hundred miles in length and, like Route 17, is located in an
area remote from centers of population.
Most of Route 25 follows the northern portion of the Atrato River Valley, and would
be excavated by conventional dredging techniques. The exact transition point from
conventional to nuclear excavation would depend upon the nature of the geology in the
upper reaches of the Truando Valley and the suitability of the soil for nuclear excavation.
The entire length of Route 25 is within the Choco Province of Colombia. The
dominating terrain feature is the Atrato River, which parallels Route 25 for about fifty
miles from the Gulf of Uraba to the town of Rio Sucio, near the confluence of the Atrato
and the Truando Rivers. The slope of the Atrato Valley floor is very slight and the character
of the terrain is low lying swampland with large portions of the valley floor inundated
during the wet season. The route is located in one of the heaviest rainfall regions of the
world. Several localities receive over three hundred inches of rain a year. Transportation
facilities are extremely limited on Route 25, particularly in the mountainous area along the
Pacific coast, where heavy rainfall and heavy forestation combine to make road construction
very costly. The chief means of transportation along the eastern portion of Route 25 is by
boat, using the Atrato River as a primary route. The swampy nature of the terrain makes
road construction extremely difficult in the Atrato Valley.
The region traversed by Route 25 is largely underdeveloped. A limited amount of
agricultural and lumbering operations is carried on in the area.
The Continental Divide is crossed by Route 25 near the Pacific Ocean where the
elevation of the Divide is about 930 feet. The Route terminates on Humboldt Bay near the
1-45
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mouth of the Curiche River.
The estimated cost of Route 25, excavated by a combination of nuclear and
conventional means, is $2.1 billion.
The primary construction problems of foreign policy interest involve the relocation of a
portion of the local population and the introduction of a United States construction and
operation force. As in the case of Route 17 the inhabitants are largely tribal in nature.
Considerable care would have to be taken to relocate these people to assure the minimum
disruption of their normal cultural and economic lives.
Design and construction would continue over a 13-year period and would entail a peak
personnel requirement of about six thousand men.
Operation of a sea-level canal along Route 25 would be considerably simpler than
operation of the existing canal. It would not be as simple as the operation of Route 17
because of its greater length. An estimated force of 3,000 personnel would be required for
operation, a major portion of whom would not have to be United States citizens.
Route 23
Route 23, extending through Colombia and Panama, is discussed under alternative
routes in Panama.
Defense Issues
The defense of Route 25 raises difficult political questions for the United States and
Colombia. Canal defense requirements for United States forces would be somewhat larger
than for the Panamanian routes. Military construction costs would run significantly higher
than for Route 17 because more facilities would have to be located in the canal area. There
would be no nearby support bases (assuming abandonment of the present Panama Canal
bases). The nearest would be Puerto Rico—900 miles away.
Economic Issues
Economic benefits to Colombia from a canal would be substantial. Construction and
operation of the canal would bring new income from tolls and port activities, provide
increased employment and generate much needed foreign exchange earnings. Employment
directly and indirectly due to the canal is estimated to range from 20,000 to 100,000 over
the ten-year construction period. When this canal would be operational, employment
directly and indirectly attributed to the canal would be about 200,000; this would be a
significant benefit to Colombia where heavy unemployment is a major problem. The net
incremental foreign exchange injection into Colombia from the canal would range from $83
million annually during the construction period to $206 million at the beginning of the
operational period. This $206 million would represent about 15% of other total export
earnings in 1985. Further, the canal would be certain to have an important impact on the
underdeveloped Choco region in which it would be situated.
A SEA-LEVEL CANAL THROUGH NICARAGUA-COSTA RICA (Figure V-2)
The Nicaragua-Costa Rica Route (Route 8) was discarded from further consideration by
the Atlantic-Pacific Interoceanic Canal Study Commission because of its expense in
1-47
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comparison with other canal routes. Both nuclear and conventional construction techniques
were examined on a route lying just south of Lake Nicaragua. It was estimated that a
conventionally constructed sea-level canal would require a prohibitively high cost ($11
billion). On the other hand, while actual construction cost of a nuclear canal would be much
lower ($5 billion), the necessary relocation of 675,000 inhabitants would involve
unacceptable social and economic costs.
The Study Group did not find any significant foreign policy advantages that would
counterbalance these technical disadvantages.
149
CHAPTER VI
HEMISPHERIC INTEREST IN A SEA-LEVEL CANAL
ECONOMIC CONSIDERATIONS
Effect of the Canal on Latin American Trade
Latin American countries characteristically rely heavily on the export of basic
commodities, and this export trade is almost entirely dependent on ocean shipping.
Latin American trade makes up a relatively small percentage of the canal’s total traffic.
Of the traffic transiting the canal from the Pacific to the Atlantic in 1968, 3.9% terminated
in Latin America and 31.5% originated there. The Latin American contribution in the
opposite direction was 19.0% bound for Latin American ports and 17.2% shipped out of
them, but most of the latter figure and 27.8% of the entire Atlantic to Pacific trade
represents petroleum products being shipped from Venezuela or West Indian refineries.
The principal United States trade with Latin America is not transported through the
canal. The canal is an important link for the passage of ore from the west coast of Latin
America, and manufactured goods from the east coast of the United States. Some petroleum
passes from the Caribbean Sea to the west coast of the United States. Yet only 10% of
United States imports from Latin America come through the canal and only 20% of United
States exports to the area pass through that route.
Since Latin American trade either in origin or destination accounts for only 5-10% of
total canal trade when the Atlantic to Pacific petroleum trade is excluded, the Latin
American countries are not major contributors to total canal revenue. The canal, however, is
a major determinant of the economies of several Latin American countries. Table VI-1 on
the role of the Panama Canal in world ocean trade—1969 demonstrates the high percentage
of the trade of various nations of Latin America which utilize the canal.
This overwhelming economic reliance on the canal by Ecuador, El Salvador, Nicaragua,
Chile, Peru, Panama, Guatemala and Costa Rica, and to a lesser extent Colombia , Honduras,
Mexico, and Venezuela, may result in political effects which far outweigh their
contributions to canal revenues. At the present time the canal is taken for granted in most
of these countries, but public awareness could grow rapidly if the economic welfare of these
countries seemed threatened by changes in the canal operation.
The significant effect of the various proposed canal options on Latin American trade
would be the effect of the particular option upon shipping costs. The construction and
operating costs of the several canal options vary considerably. To the degree toll rates are
affected by construction costs, the exports of these countries would be more or less
competitive in world markets in direct relation to the cost of the canal. The various canal
options could affect Latin American trade. Due to the relative speed and ease with which
ships could utilize a canal, the different canal options would result in varying transit times.
To the extent that transit time is reduced, shipping costs would be lowered.
1-51
TABLE VI-1
PANAMA CANAL USERS, FISCAL YEAR 1969!
Country
Long Tons of Commercial Cargo
Origin
Destination
Percent of Country’s
Total Oceanborne Trade
United States
(U.S. Intercoastal)
| Japan
Canada
Venezuela
Chile
Peru
United Kingdom
Netherlands West
Indies
Netherlands
Australia
West Germany
Ecuador
Philippine Islands
New Zealand
South Korea
Colombia
Cuba
Panama
Canal Zone
Mexico
Belgium
France
Italy
Formosa
El Salvador
Poland
Trinidad/Tobago
South Vietnam
Nicaragua
Brazil
Puerto Rico
Spain/Portugal
Jamaica
China
44,010,410
(3,851,326)
7,396,528
7,280,101
8,528,294
3,325,839
4,678,162
979,589
3,720,671
470,062
1,668,788
790,825
969,258
1,534,594
1,309,822
252 iao
1,061,716
1,084,094
1,229,607
17,165
677,417
706,125
334,326
185,766
307,414
207,868
843,564
680,661
166,801
387,816
100,397
108,216
427,746
343,290
27,618,123
(3,851,326)
33,558,400
2,335,207
704,973
4,063,013
1,768,126
3,362,642
113,646
2,737,548
1,367,957
2,085,378
1,215,417
545,703
702,091
1,672,353
611,011
479,554
331,358
1,436,424
758,039
794,153
941,959
1,032,002
823,642
870,014
75,297
108,642
772,063
494,675
240,668
514,360
452,971
113,646
192,271
(Continued on following page)
Countries are ranked in accordance with total of origin and destination cargoes in Fiscal Year 1969. Canal
per cent of country’s total oceanborne trade is based upon data contained in the United Nations Statistical
Yearbook, 1970.
TABLE VI-1 (Cont’d.)
PANAMA CANAL USERS, FISCAL YEAR 1969
Long Tons of Commercial Cargo Percent of Country’s
Country Origin Destination Total Oceanborne Trade
Costa Rica 276,139 237,150 30.9
Guatemala 74,396 407 349 30.9
Indonesia 66,578 413,416 1.8
Hong Kong 193,990 230,662 Sho//
East Germany 355,160 48,179 4.2
French Oceania 130,498 246,157 —
Sweden 164,508 195,267 0.5
British Oceania 319,320 38,007 -
British East Indies 188,277 122,919 —
Netherlands Guiana 288,765 — _
Honduras 210,642 20,602 13.6
USSR 187,477 32,731 0.2
Thailand 68,656 151,272 ile,
North Korea 57,493 127,350 12.1
Denmark 52777 128,345 0.6
West Indies Associated
States 134,371 40,023 -
Norway 103,574 66,836 0.3
Finland 158,050 — 0.6
Guyana 140,418 _ 2.8
Yugoslavia 11,491 128,840 1.1
Argentina 36,886 56,355 0.5
South Africa — 92,317 0.4
Irish Republic — 75,831 0.7
Haiti and Dominican
Republic 10,004 59,844 1.6
Rumania 62,867 — 0.9
Israel = 56,452 0.9
Libya — 40,278 —
Greece — 32,423 0.2
Lebanon _ 26,380 0.1
Morocco — 12,995 0.1
Mozambique — 10,100 0.1
British Honduras 1,636 _ 0.8
All Others 2,311,328 3,299,726
TOTAL 101,391,132 101,391,132 al
[Pai calla a
1-53
Contribution to Latin American Economic Integration
One of the first effects of the opening of the Panama Canal in 1914 was to eliminate
the trade route around Latin America and as a result decrease the commerce among Latin
American countries. The pattern of trade shifted. Even when trade did take place between,
for example, Peru and Argentina, it was often trans-shipped through London.
One of the basic assumptions of the Latin American Free Trade Association (LAFTA),
as well as of the Andean subregional group, is that there are important economies of scale in
the production of many industrial goods. At present many high cost industrial products are
produced in Latin America for limited national markets behind import barriers. It is hoped
that LAFTA and other international efforts will lead to the replacement of numerous small
and inefficient plants by more efficient units scaled to producing for a multi-national
market. However, the scope of the market and the event to which the advantages of large
scale production can be realized are limited by transport costs among other things. Thus a
more efficient canal would contribute toward achieving the goal of Latin American
economic integration.
NUCLEAR CONSIDERATIONS
Latin American Nuclear Free Zone
The Treaty for the Prohibition of Nuclear Weapons in Latin America does not prohibit
the nuclear excavation of an interoceanic canal by the United States. Article 18 permits the
contracting parties to collaborate with third parties for the purpose of carrying out
explosions of nuclear devices for peaceful purposes in accordance with specific provisions. It
includes requirements that contracting parties must provide certain information to the
International Atomic Energy Agency and to the regional control institution for the treaty.
1-54
CHAPTER VII
WORLDWIDE ASPECTS OF CONSTRUCTING A
SEA-LEVEL CANAL
NUCLEAR EXCAVATION
International Treaty Restrictions
In addition to the requirements of the Latin American Nuclear Free Zone Treaty, two
other treaties bear on nuclear excavation: the Treaty Banning Nuclear Weapons Tests in the
Atmosphere, in Outer Space and Under Water (Limited Test Ban Treaty) and the Treaty on
the Nonproliferation of Nuclear Weapons (Nonproliferation Treaty).
Limited Test Ban Treaty
The Limited Test Ban Treaty, to which the United States and Panama are parties and
Colombia is a signatory, presents two distinct problems of relevance to nuclear excavation.
The first is the degree to which the treaty may restrict the ability of the Atomic Energy
Commission to develop nuclear cratering technology to the point where it can be
demonstrated to be feasible and an authoritative assessment can be made of its safety and
cost. The second is that a treaty modification is needed to permit the actual nuclear
excavation of a canal in Panama or Colombia.
The treaty prohibits “any nuclear weapon test explosion, or any other nuclear
explosion in the atmosphere, in outer space or under water.†The treaty also prohibits “in
any other environment,†meaning underground, “any nuclear weapon test explosion or any
other nuclear explosion...if such explosion causes radioactive debris to be present outside
the territorial limits of the State under whose jurisdiction or control such explosion is
conducted.†Explosions for peaceful purposes are subject to the same restrictions as nuclear
weapons tests; i.e., they are permissible only if: (1) carried out underground, and (2) they
do not cause radioactive debris to be present beyond territorial limits. This second criterion
is technically imprecise and therefore gives rise to questions of interpretation.
Even if nuclear excavation experimentation is successfully carried to completion and if
considerations seem to recommend nuclear excavation, given the short distance from
territorial borders of the most probable construction sites, construction could not be done
under present interpretation of the Limited Test Ban Treaty limitations. The negotiators of
the treaty were fully aware, however, that the peaceful use of nuclear explosives might
prove feasible and desirable in subsequent years. They deliberately made it possible to
amend the treaty for this purpose by a simple majority (rather than by a two-thirds
majority) of the parties, provided that the three principal signatories agreed.
The Non-Proliferation Treaty
The Non-Proliferation Treaty would not prohibit the nuclear excavation of an
interoceanic canal by the United States. While the treaty prohibits non-nuclear weapon
states from having their own nuclear explosive devices, Article V provides that non-nuclear
nations shall have the benefits of nuclear excavation technology at minimum cost if and
when such excavation proves feasible. The first version of this article was simply a paragraph
1-55
in the Preamble, but in light of the considerable interest expressed by non-nuclear weapon
states it was included as an operative article of the treaty.
One other aspect of the Non-Proliferation Treaty is worthy of comment. Throughout
the discussions of the treaty there were strong demands by the non-nuclear weapon states
for further steps toward disarmament, and this is reflected in Article VI of the treaty as well
as in the Preamble. These provisions presage considerable pressure to continue negotiations
toward a Comprehensive Test Ban Treaty. While it is reasonable to expect that a
Comprehensive Test Ban Treaty would provide for continuing development and utilization
of peaceful nuclear explosions, the realization of such a treaty before or during the
construction of a canal might impose additional restrictions or procedural requirements on
the use of nuclear explosives for the construction of a transisthmian sea-level canal.
The peaceful application of nuclear explosives is still in a relatively experimental stage.
Its technical and economic feasibility has not been fully demonstrated and its collateral
effects are not completely known. If testing is permitted to continue, and if the technical
advantages and safety of nuclear excavation techniques are established beyond a reasonable
doubt, relief from the problem of treaty restrictions on the use of nuclear excavation
probably can be obtained more easily.
The Effect of World Opinion
Reaction among the nations of the world to the employment of nuclear explosives for
building a canal would depend largely upon what had transpired in the peaceful use of
atomic energy, and on how convincingly and in what manner the United States and other
interested powers had presented their case. If progress had continued and news of that
progress had been disseminated to the leaders and peoples of other nations, there probably
would be little difficulty.
The discussion of foreign policy aspects of the use of nuclear explosives in construction
of a sea-level canal has focused on problem areas connected to such a project. This should
not, however, over-shadow the tremendous prestige and respect that would accrue to the
United States for successful completion of an internationally used utility through the
peaceful application of atomic energy.
In summary, it appears that if it can be proved that nuclear excavation is technically
feasible and the health and safety measures would not involve too much disruption to
peoples’ lives, and if measures were taken to offset economic disadvantages incurred by
Panamanians, the political and legal problems involved in the project could be overcome and
the feat would redound to the credit of the United States. The real question is the technical
feasibility of the project.
ECONOMIC CONSIDERATIONS
Effect of Toll Structures on World Trade
Because of the cost of amortizing any investment in a sea-level canal and of providing a
share in the revenues to the Republic of Panama, it is assumed that any change in toll
1-56
structures would be upward rather than downward. The effects of an increase in toll rates
would be both on the volume of traffic and on the commodities carried.
Profit margins in the shipping industry are such that changes in operating costs
generally are shifted to the product being carried. The volume of shipping through the canal
can be expected to change with increasing tolls, therefore, either when alternatively less
costly routes or other transportation modes are available or when the shift of cost to the
commodity being carried becomes so great as to reduce the quantity being shipped. Any
disruptions which do take place will have foreign policy implications in so far as they affect
the shipping of other nations, the suppliers of goods in international commerce, and the
end-users of these goods.
Studies conducted by the Stanford Research Institute and Arthur D. Little, Inc.
indicate that, while small changes in tolls would not affect the volume of shipping, diversion
of shipping begins as the increases range above 25%. A more recent study, conducted by
Arthur Andersen and Company in connection with the Commission’s Study of Interoceanic
and Intercoastal Shipping, concludes that selective increases averaging 50% over present tolls
can be applied without markedly affecting traffic growth. The extent of the disruption
depends on whether the toll increases are general or selective and on the magnitude of the
increases. Any increase in tolls resulting in a substantial reduction of shipping could produce
friction between the United States and the two groups of nations under whose flags most
transits of the canal take place. These groups may be categorized as major trading partners
of the United States and less developed nations. Any major changes in toll structures would
have to be considered not only in the light of their effect on canal revenues, but also in
terms of special foreign policy relationships between the United States and these nations.
Many commodities, particularly petroleum, ores, metal and coal which are the highest
tonnage items transiting the canal, are so highly competitive that relatively small changes in
costs per ton can cause shifts to alternative sources of supply. These bulk items are
frequently very important sources of foreign exchange earnings for developing nations and
since sailing around Cape Horn is more expensive for bulk carriers, toll rates which
effectively raise the price to these suppliers can cause serious economic dislocations. Any
analysis of the impact of tolls on the volume of tonnage being shipped must, therefore, be
disaggregated to see its effects on shifting sources of supply for various commodities. These
shifts must be considered in the light of United States relations with the suppliers affected.
The United States might also find itself involved in foreign policy issues with end-users
of products transiting the canal under various circumstances resulting from higher toll rates.
For example, a major shift in the rate structure could be translated into generally higher
world prices for commodities transiting the canal with resulting world-wide dissatisfaction.
This dissatisfaction could be particularly pronounced in the case of poorer nations
dependent on food, grains, and other agricultural commodities which are significant items in
canal traffic. Also, for several of the Central American countries and Colombia, the canal is
an important link between their coastal markets; consequently, increased shipping costs
would have a direct and extensive effect on the domestic economy. Once again, any
measurement of the effects of a change in the toll structure must be disaggregated, this time
to measure its effects on United States relations with end-users of products which are
transported through the canal.
1-57
Effect of a Sea-Level Canal on World Trade
The foreign policy considerations mentioned above in relation to toll structure also
apply to the discussion of expanding the canal. Both tolls and capacity impose limits on
traffic. The Shipping Report to the Study Commission demonstrates that the existing canal
could be reaching its full capacity sometime during the period 1989-2000; as this date
approaches, complications for ships transiting the canal will increase. As of 1970, there were
about 1300 ships afloat, under construction or on order which are too large to pass through
the canal under any circumstances because of excessive beam width. An additional 1750
such ships cannot pass through the locks fully laden at all times because of draft limitations.
These limitations on quantity and size can complicate world trade by making shipping
more costly and difficult, by causing economic dislocations for suppliers, and by restricting
supplies to the world’s consumers. They thus could tend to retard the rapid expansion of
world trade. In so far as a sea-level canal would mitigate these complications and also reduce
transit time, it would supply foreign policy benefits which are not so readily apparent when
simply measuring the elasticity of canal traffic to changes in the toll structure.
The benefits which do accrue to the United States by removing these potential barriers
to world trade are of considerable significance in evaluating the overall desirability of a
sea-level canal.
The reduction of barriers to trade lowers costs and increases efficiency at home for, like
technological progress, trade widens the range of available ways of transforming labor and
other resources into desired goods and services. Technological progress and geographic
specialization both make this transformation more efficient. The ready availability of items
in world trade reduces artificial incentives for the flow of American capital abroad. It also
tends to reduce over-reliance on regional economic groupings and lessens the discrimination
our exports face from such groupings. All countries benefit from the specialization, the
growth and the exchange of technology, and the spur to productivity that competition in
the world market provides.
Seventy percent of the goods transiting the canal originate or terminate in United States
ports. The canal is, therefore, in a very real sense our window on the world. We have a
definite foreign policy interest in seeing that the window remains fully open to the world of
the 21st century.
1-58
CHAPTER VIII
AN ATLANTIC-PACIFIC SEA-LEVEL CANAL: AN
INTERNATIONAL PUBLIC UTILITY
There has long been discussion concerning the possibility of arranging some form of
multinational participation in the operation of an isthmian canal. The 1967 draft treaties
contained provisions for multinational participation in the financing, ownership and
operation of a sea-level canal, but the exact terms of an arrangement were left open for
future agreement.
United States interest in possible multinational participation stems from political and
financial considerations. While United States interests might be served by some form of
multinational participation in the future, the foreign policy benefits at present do not
appear great. We would hope to reduce the burden on the United States taxpayer somewhat
by obtaining international financial support for new canal investment. There is little doubt,
however, that the United States would provide the major share of the investment.
Panama has historically resisted multinational participation. The inducements for
multinational participation are not great to major user nations, who appear to believe that
the operation of an isthmian canal is primarily a United States responsibility.
1-59
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ANNEX II
FINAL REPORT
(ABRIDGED)
ON
THE EFFECT OF CONSTRUCTION OF AN
ATLANTIC-PACIFIC INTEROCEANIC SEA-LEVEL CANAL
ON THE NATIONAL DEFENSE OF THE UNITED STATES
BY THE
NATIONAL DEFENSE STUDY GROUP
ATLANTIC-PACIFIC INTEROCEANIC CANAL STUDY COMMISSION
WASHINGTON, D.C.
JUNE 1970
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INTRODUCTION
In October 1965 the Atlantic-Pacific Interoceanic Canal Study Commission requested
the Secretary of Defense to undertake a study of the national defense aspects of a sea-level
canal. At the direction of the Secretary of Defense, the study was initiated under the
auspices of the Secretary of the Army, who appointed the Deputy Under Secretary of the
Army (International Affairs) as study group chairman.
The purpose of the National Defense Study was described by the Commission as
follows:
“To determine the effect of the construction of an Atlantic-Pacific sea-level
interoceanic canal on the national defense of the United States and to compare the
alternate routes and methods of construction from the standpoint of national defense.â€
The study group was organized from members assigned to the concerned offices within
the Department of Defense, and from the Department of State, Department of
Transportation, and the Atomic Energy Commission. The study has been developed, refined
and updated through five annual drafts. The final report represents the sixth comprehensive
review. This document is the abridged and unclassified version of the final report.
The study is organized into five chapters. Chapter I presents the conclusions derived
from the analysis of the defense aspects. Chapter II analyzes the strategic mobility and
logistic support considerations of a sea-level canal. Chapter III discusses the vulnerability
and defense requirements of a canal. The regional security aspects of a sea-level canal and its
associated defense bases are considered in Chapter IV. In the final chapter the national
defense considerations of the method of construction are analyzed.
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CHAPTER I
CONCLUSIONS
The National Defense Study Group supports the following conclusions with regard to
the national defense aspects of a sea-level canal:
1. A sea-level canal would represent a major defense asset for the United States. It
would economize defense efforts by meeting:
a. The continuing requirement to shift naval power to meet changing threats and
situations, a requirement which could be pressing in the future due to existing
United States commitments and projected force level constraints.
b. The continuing requirement to move logistic support by surface shipping to
overseas areas in:
(1) Peacetime
(2) Stability operations
(3) Limited war
(4) General war. In this category of warfare, the canal would facilitate
recovery of the United States from a general war attack.
2. A sea-level canal would meet the requirements of the increased size of both naval
and merchant ships.
3. A sea-level canal would be far less vulnerable than either the present canal or any of
the modernized versions of the third lock canal. Damage to any sea-level canal sufficient to
necessitate re-excavation would require an accurately delivered multi-megaton attack. A
totally nuclear excavated canal, by virtue of its greater depth and cross sectional area, would
be less vulnerable to blockage than a conventionally excavated canal.
4. A sea-level canal would better provide for both peak period traffic demands and
long-term (annual) traffic requirements. The greater peak period capacity of a sea-level canal
would significantly ease the time phasing requirement necessary to avoid a lucrative target
bottleneck. The greater annual capacity would meet the demands of military shipping while
minimizing commercial shipping travel time. This would not be possible if the present lock
canal were operating at capacity or near capacity as can be expected by the end of the
century.
5. Considering the foregoing and the location of Routes 8, 10, 14, 17, and 25, a
sea-level canal at any one of the routes would be adequate, whether constructed by
conventional or nuclear means, for military transit requirements and would represent a
significant improvement from a defense standpoint over the present lock canal and over a
third lock-type modernization.
6. Due to its reduced vulnerability and greater capacity, a sea-level canal constructed
wholly by nuclear means is preferable from a defense standpoint to a conventionally
excavated canal or one that is constructed by a combination of nuclear and conventional
II-1
excavation. For this reason, if there is no national decision to construct in the near future,
research and development efforts should continue in order to develop a nuclear excavation
capability for future canal construction.
7. If only conventional excavation methods can be employed, Route 10 possesses a
significant advantage over Route 14 primarily in that construction of Route 10 would leave
the present lock canal as a backup facility after construction and would not hazard the
present canal during construction.
8. A transisthmian canal, either lock or sea-level, is of major and continuing
importance to the national defense of the United States.
9. By providing for Canal Defense our bases would render a major contribution to
regional security of the Americas.
10. Neither the conventional nor the nuclear construction effort required to build a
sea-level canal would tax the construction resources of the United States.
II-2
CHAPTER II
STRATEGIC MOBILITY AND LOGISTIC SUPPORT
INTRODUCTION
This chapter examines the contribution of the Panama Canal to the mobility of United
States naval forces and to the ocean-borne logistic support of all types of overseas military
operations and estimates the effect which construction of a sea-level canal at various
locations would have on these aspects of the national defense. It reviews the past role of the
Panama Canal in naval deployments and logistic support, the limitations which the present
canal imposes, and the role of the Canal in relation to current strategic concepts; and it
projects the use which could be made of a sea-level canal in implementing United States
strategy as it may evolve to meet world conditions in the future.
Study of the past, present and future role of an Atlantic-Pacific interoceanic canal
indicates that it shortens significantly the time to deploy forces at the beginning of a
conflict in almost any part of the world, and that as the conflict progresses the cumulative
saving of time results in bringing into action greater military force for the same supporting
resources. Put another way, such a canal economizes the effort needed to apply the required
military power.
Since the advent of the larger aircraft carriers, a major element of United States naval
power has been unable to transit the Panama Canal. While the decision to build these ships
removed a design constraint from our naval architects which led to more effective modern
weapons systems, it had the adverse effect of increasing the time of transit of these ships
between the Atlantic and Pacific fleets. Construction of a sea-level canal would result in
economies and would permit greater flexibility in the deployment of our carrier strike
forces, a major factor in the effective employment of seapower. While the uncertainties
inherent in the necessity to navigate a restricted passage would require planning and
preparations for the contingency that use of the canal might be denied, at least temporarily,
a sea-level canal would be considerably less vulnerable to such closure than would the
present lock canal. Although it is not possible to quantify in concrete terms the advantage
which a sea-level canal would afford over the present canal, this chapter presents the best
estimate of the net advantage that can be made with data currently available.
CONTRIBUTIONS OF PANAMA CANAL TO
NAVAL MOBILITY AND LOGISTIC SUPPORT
The Panama Canal has provided a steadily increasing contribution to our national
strength and security since its opening in 1914. Through the years the number of ships
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annually transiting the Panama Canal has increased from 1,100 to more than 15,500. During
World War II some 5,300 warships and 8,500 other ships carrying troops and cargo for
military use passed through the canal. Again, during the Korean War, the canal facilitated
the rapid movement of logistic support for military operations. It has been estimated that
during FY 1953, 22 percent of Army tonnage directed for Korea was shipped from East or
Gulf Coast ports through the canal.
The logistic support required by current military operations in Southeast Asia has also
increased military use of the canal. Between 1964-1968 there has been a 640 percent
increase in dry cargo tonnage and a 430 percent increase in POL* tonnage moved into the
Pacific Ocean through the Panama Canal by the Military Sea Transportation Service which
provides the logistical surface shipping support for United States military operations
overseas. During FY 1968 approximately 28 percent of the POL sent to South Vietnam,
Thailand, Philippines, Guam, Okinawa and Japan transited the Panama Canal.
Experience since 1940 shows that logistic requirements for military operations have
steadily increased and can be expected to do so further in the future. The complicated
machines of modern war have increased the need for logistic support of all kinds. In this
regard POL and ammunition are particularly important. Consumption per man per day has
markedly increased. The bulk characteristics of these two classes of supply suit them
particularly for ocean shipment. Another factor which dictates an expanded need for ocean
transport is the increasing quantity of motorized ground and airmobile equipment of larger
dimensions.
The importance of a transisthmian canal can be demonstrated by hypothesizing the
following case: move 80,000 personnel and 3,000,000 measurement tons of supplies to the
Pacific from Atlantic and Gulf Coast ports through the Panama Canal. Using the factors of a
troop transport capacity of 3200 personnel and a cargo ship capacity of 7200 measurement
tons, the number of ships required for total lift at one time approaches 450. Closure of the
Panama Canal would approximately double the requirements for ships to support operations
in the Pacific at the same level of support. In general, the most sensitive transport capability
resource is ocean shipping and in most cases, because of the large tonnage required, ocean
shipping will account for about 90 percent of total deliveries.
Since its opening the canal has been a prime consideration in the planning for and
accomplishment of the safe and timely movement of naval units between the Atlantic and
Pacific Oceans. A saving in distance of approximately 8,000 miles is realized by canal
transit, versus rounding Cape Horn, in the deployment of ships from one coast to the other.
A time saving of up to 30 days can accrue for slower ships and at least 15 days for fast ships
(20 knots). The capability to shift rapidly naval power between the Atlantic and Pacific
Oceans presents a significant advantage to the country controlling the Isthmian passage.
Our world-wide contingency planning would require an increase in the active naval
forces if we were denied the flexibility resulting from our ability to move naval vessels
quickly from the Atlantic to the Pacific. If the active naval force level cannot be increased,
the alternatives are to accept increased reaction time which could result in increased losses
or at least in accepting greater risk of increased losses.
The savings in steaming time and distance resulting from use of the canal during World
War I and II by both naval and logistic support forces produced the important end benefit
*Petroleum, oil, and lubricants
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of reduced exposure to the enemy submarine threat. A basic concept of shipping protection
in that ships could be at sea for the shortest period of time necessary to accomplish their
mission. By eliminating the necessity of the long voyage around Cape Horn, the U-Boat
operating area along the northeast coast of South America was bypassed and the necessity
for ASW operations in the area was removed. While it is impossible to forecast future naval
operations precisely, it appears reasonable to assume that an advantage of this nature also
would occur in future military operations in which the enemy has a significant naval
capability.
A concomitant commercial and logistic advantage of a sea-level transisthmian canal is
that it would allow shipping (that too large to transit the lock canal) to avoid the natural
hazards of the Cape Horn and Strait of Magellan area. It should be noted, however, that
large vessels would probably use the Cape Horn route in spite of its hazards if it represented
a clear economic advantage over use of the sea-level canal. The principal dangers to
navigation are narrow channels, poor weather conditions, and tidal currents in the Strait of
Magellan and icebergs and frequent gales in the Cape Horn area.
Due to these hazards the continuous large-scale use of Cape Horn and the Strait of
Magellan would result in the attrition of men and shipping involved. In this regard a
transisthmian canal would husband our naval and maritime resources.
ADEQUACY OF PRESENT CANAL
Though the present Canal makes a major contribution to the strategic mobility of the
U.S. Navy, it does not provide an unrestricted passage for all naval ships. The present Canal
is incapable of providing transit for the Navy’s fifteen attack aircraft carriers (CVA) and
four antisubmarine aircraft carriers (CVS). Thus, the flexibility of the Navy’s nuclear
striking power and antisubmarine aircraft carrier capability is restricted by the limitations of
the existing lock canal. In this respect the Canal is obsolescent.
An example of the effect which the inadequacy of the present Canal already has had on
operations in Southeast Asia was the interocean movement of the aircraft carriers
ENTERPRISE, INDEPENDENCE and BOXER, and the communications configured escort
carrier ANNAPOLIS. The saving in distance on these deployments from the East Coast to
the operating area of Vietnam via the Panama Canal would have been as much as 5,000
miles per ship. A saving in time of as much as 11 days per ship could have been realized
depending on the speed of advance.
In addition to the U.S. Navy aircraft carriers which are too large to make the transit,
there are about 1,300 ships afloat, under construction, or on order which cannot enter the
Panama Canal locks. There are approximately 1,750 more ships in these categories that
cannot pass through the Canal fully laden at all times because of draft limitations due to
seasonal low water level.
When considering the limitations of the Panama Canal it should be recognized that the
Suez Canal also has a ship size limitation, particularly with regard to channel depth. Today,
carriers of the MIDWAY, ENTERPRISE, AMERICA, KITTY HAWK and FORRESTAL
class could not transit the Suez Canal if it were reopened. This means that the Suez Canal
will no longer provide an alternative routing for this type of naval ship. Loss of the Panama
route as well as the Suez route would severely restrict the flexibility of our naval resources.
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For example, a ship which required 25 days to go from New York to Tokyo through the
Panama Canal would require 34 days via the Suez Canal. If required to go around the Cape
of Good Hope, the sailing time would be 38 days.
Any consideration of adequacy of the existing canal should include its vulnerability.
The locks, dams, power systems, and the depth and width of the Gaillard Cut make the
present canal a vulnerable target. In certain situations the canal could be closed for two
years. A sea-level canal would be far less vulnerable. Considering the more likely methods of
attacks, 5 days to two weeks is a reasonable estimate of closure time for a conventionally
excavated sea-level canal. Closure of a nuclear excavated canal would be extremely difficult
short of seizure.
An alternative to a sea-level canal as the answer to the growing obsolescence of the
Panama Canal is its improvement and modernization. In this regard the interest of the
Engineering Agent of the Canal Commission has been centered on a lock canal option
utilizing a third set of locks capable of carrying 150,000 DWT ships. The total capacity of
such an augmented canal would be approximately 35,000 transits per year. Principal
features of this plan include very large additional locks, deepening and widening of the
canal and the pumping of sea water into Gatun Lake or the recirculation of fresh water to
meet the increased water requirements. The major defense disadvantages of this type
solution are the vulnerability to sabotage and blocking and the inability of this canal to
transit the Navy’s large aircraft carriers.
ADVANTAGES OF SEA-LEVEL CANAL IN
FUTURE APPLICATION OF MILITARY POWER
Current strategic concepts are inherently interrelated to the varying levels or intensities
of military conflict. To a significant degree they reflect the resources the United States is
willing to expend to meet a particular threat. A sea-level canal would make a contribution
across the military spectrum, although the importance of this contribution varies greatly
between types of conflicts and between specific conflicts of the same general type.
General war is usually considered to consist of two phases. The first involves the period
of the nuclear exchange and the second is the period which follows the exchange and in
which the war is brought to conclusion.
Assuming the first phase lasts a matter of hours or at most days, the canal probably
would have no role to play. Depending on the length of strategic warning, however, the
canal could play a major role in the prepositioning of both combat naval forces and land
forces. A sea-level canal would have the advantages of the reduced time and distance factors
present in today’s Canal as well as the additional advantages of an increased vessel size
capacity and of reduced time of transit. Transit time in this type emergency would be very
nearly a function of ship speed, rather than today’s lock manipulation time. While it may be
argued with some considerable merit that the degree of strategic warning postulated above is
unlikely, the advantage which this additional option provides should not be disregarded.
Assuming a general war, a sea-level canal could well play a major role in the survival of
the United States as a major world power during the second period. During this time of
wide-spread destruction and chaotic social and economic conditions the rapidity of relief
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may well be as important as the relief itself. Succor will have to come from the less damaged
areas of the world. An operational canal would facilitate the flow of these supplies to the
appropriate areas of the United States.
Moreover, the canal would fill to some extent the gap created by the disruption of
cross-country land transportation. The proper distribution of surviving resources will be a
very difficult problem at best. Closure of the canal would make it more so.
The ability to use the canal for rapid deployment of the residual forces of the United
States would be of great importance to the successful continued prosecution of the war.
Limited war and stability operations are characterized by conscious restraint with
regard to one or more of its aspects, e.g., objectives, forces, weapons or locale. However, it
may involve very large forces between major powers engaged in a considerable area of
operations. Because of the magnitude of general war destruction, limited wars and other less
formalized military operations have become the most prevalent and probable type of
conflict. The increasing destructive power of modern weapons appears to assure that this
trend will continue in the future. Certainly, the history of conflict since World War II makes
it clear that wars or engagements of limited scope are the more likely. It is also clear that the
ability to react rapidly in situations requiring the use of armed force may make the
difference between a crisis which has been calmed and one which gets out of control.
It is important for the United States to preserve the capability to respond quickly with
the proper level of military power in response to commitments abroad. Fundamental to this
concept is the ability to employ our superiority on the seas to maximum advantage. In
planning for the future, the continued use of the seas will remain important to the ability of
the United States to apply military power with speed and discrimination wherever required
in the national interest.
As national economic restraints make themselves felt on naval force levels, the sea-level
canal’s capability to provide the U.S. with “interior lines†between the Atlantic and Pacific
becomes of even greater importance. The ability to quickly move major vessels and shipping
from one ocean to the other is obviously a tremendous advantage. A sea-level canal would
not only permit the faster inter-theater transfer of carrier forces, which the present canal
cannot accommodate, but would provide a greater capacity for handling shipping of all
types in an atmosphere of reduced vulnerability to damage. Because of the emergence of the
Soviet Union as a world power with a major submarine fleet, the United States Navy could
conceivably be confronted with a situation in which the interior lines of deployment
through a relatively invulnerable sea-level canal assume greater importance than has been
true since the opening of the Panama Canal.
In World War II (1941-1945), United States Government vessels made 20,276 transits,
and 24 million tons of military supplies passed through the Canal. During the Korean War
(1951-1954), United States Government vessels made 3331 transits, and 12 million tons of
supplies went through. The Canal played an important role in the deployment of naval
vessels during the Cuban crisis in 1962. In dealing with any possible future conflicts strategic
mobility on the seas will continue to be of great importance. The capability of naval forces
to respond in a timely manner with appropriate power and with the ability to move troops
and supplies with safety and assuranceacross the oceans to the scene of conflict is essential.
In accomplishing these tasks the availability of a sea-level transisthmian canal would provide
a significant strategic advantage. Current operations in Southeast Asia bear this out.
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Although Vietnam is a Pacific nation, major logistic support for the war flows from the East
and Gulf Coasts of the United States. Since the closure of the Suez Canal in June 1967, this
support has utilized the Panama Canal almost in toto. While shipping times are longer from
the East Coast, they are not prohibitively so, particularly in the role of long-term logistic
support. Average sailing time to Vietnam from East Coast ports is 37 days, from West Coast
ports 25 days.
Total cargo in FY 1967 (1968) shipped through the Canal in support of United States
efforts in Southeast Asia was approximately 5.190(7.2) million long tons or about 5.6 (6.8)
percent of total Canal cargo tonnage transited. During FY 1968, of a total of 11,947,000
measurement tons of dry cargo shipped from CONUS for the military services by MSTS to
South Vietnam, Thailand, Philippines and Guam, 3,942,066 measurement tons were shipped
via the Panama Canal (approximately 33%). As regards POL, a total of 14,118,588 long tons
was shipped for use in support of operations in Southeast Asia, 4,104,970 long tons were
shipped via the Panama Canal (approximately 29%).
The role of the Panama Canal in support of the war in Vietnam shows that it is not only
of major logistic and strategic importance in the lower intensity conflicts, but also cost
effective in the performance of that role.
FURTHER CONSIDERATIONS
Having discussed the importance of a transisthmian canal to past and present military
operations, the advantages of a sea-level canal over the present lock canal require further
consideration. These advantages fall into the following general categories:
(1) vulnerability or survivability (See Chapter III)
(2) peak period transit capacity
(3) long-term transit capacity, and
(4) ship size capacity
Peak period capacity of the present canal may be addressed in terms of its daily lockage
limitations. The rated daily capacity is estimated at 65 lockages or about 71 ship transits.
These figures are the result of many factors such as operator efficiency, condition of
equipment, and time required for lock manipulations—filling or emptying a lock, opening
and closing gates. These capacity rates cannot be sustained on an annual basis due to present
limitation on the lockage water supply. They could be sustained for a rather extended
period, however, provided the Gatun and Madden Lakes were at a sufficient level at the time
in question.
Based on the currently estimated transit speed of 7 knots and single lane traffic, the
daily capacity of a sea-level canal in Panama would be between 90 and 180 transits. Such a
ceiling means, in effect, that the peak transit capacity would not be a major limiting factor
for future military use. With the lock canal it could be. The requirement to time phase
shipping through the canal in order to avoid a target bottleneck would be significantly
eased.
Annual transit capacity today is limited by the availability of water for lockage.
Basically the present water supply limits the number of lockages to approximately 18,000
transits annually if an acceptable water level is maintained in Gatun Lake. Annual transit
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capacity has been estimated to be approximately 27,000 provided additional improvements
costing $92 million are made. The annual figure would more than provide for any
reasonably foreseeable military shipping requirements. The range of future shipping
estimates indicates that a capacity of 27,000 transits would be reached by normal
commercial traffic between 1989 and 2000. The capacity range of the sea-level canal
options under principal consideration is up to 80,000 ocean-going transits per year.
Ship size capacity. A sea-level canal would not have the ship size restriction of the
present lock canal. The present restriction derives from the dimensions of the locks (110’
wide and 41’ deep by 1,000’ long). The dimensions currently being considered for a
conventionally excavated sea-level canal are 550’ x 75’ at the edges with an 85’ deep
centerline. A nuclear excavated canal would be 1,000’ wide with a minimum depth greater
than 100’, which would run to 250’ deep at canal center.
The United States naval combat ships that cannot utilize the Panama Canal have already
been enumerated. During the period 1953-1969 there have been 36 interoceanic transfers of
such vessels; however, 19 of these transfers have occurred since the Gulf of Tonkin incident.
Navy planning has tended to minimize the interocean transfer of large units due to the
transit time and cost involved. If a sea-level canal had been available a far greater degree of
deployment flexibility would have been afforded. The requirement for timely redeployment
of even our largest fleet units would become increasingly important in the event of reduced
force levels.
Until World War II, the size of U.S. Navy ships was limited by the size of the locks of
the Panama Canal. Even today the size of the canal locks is still a major consideration in
naval design. In those cases there is little question that this artificial constraint has had an
adverse effect by not permitting naval architects to maximize operational capability in all
cases. In those cases where the trade-off is not considered excessive this is still the case, e.g.,
the proposed Fast Deployment Logistic (FDL) Ship has been designed to allow transit of
the Canal.
The construction trend in many other naval vessels, however, is toward larger ships
which cannot be accommodated by the Canal. The specifications for current nuclear
powered attack aircraft carriers (CVA) include a beam width of 257 feet at flight deck level,
a length of 1,040 feet, and a draft of 37 feet. U.S. Navy combination oiler and ammunition
ships now in service, and others under construction, have beam widths of over 100 feet,
lengths over 700 feet and drafts greater than 37 feet.
It is clear that if the United States is to remain predominant on the high seas, the U.S.
Navy must continue to take full advantage of future improvements in the areas of ship
design and propulsion. An important corollary to a naval modernization program is a
sea-level canal which will afford the naval warships of the future expeditious passage
between the Atlantic and the Pacific Oceans and at the same time allow naval architects and
planners to be constrained by the more liberal restrictions of a sea-level canal.
In view of the strategic significance of future operations at sea, the increasing quantity
of logistic support required to sustain military operations, the trend to ships of larger
dimensions, and the projected increase in the number of ships requiring passage between the
Atlantic and Pacific Oceans, it becomes evident that a sea-level canal would constitute a
major asset for the defense of the United States.
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COMPARATIVE EVALUATION OF ALTERNATE PROPOSED
CANALS FROM STANDPOINT OF STRATEGIC MOBILITY
AND LOGISTIC SUPPORT
The ultimate decision on the particular selection of a site for the sea-level canal is not a
consideration of paramount importance from the standpoint of strategic mobility and
logistic support. The various routes under consideration for a sea-level canal connecting the
Atlantic and Pacific Oceans are in such relatively close proximity to one another that the
sailing time between them is negligible when considering the overall time to transfer
shipping via a canal as opposed to rounding Cape Horn. The most significant consideration
from the viewpoint of national defense is that the canal be sea level and thereby eliminate or
minimize the inherent disadvantage of a lock canal, such as its vulnerability and limited
capacity to handle shipping due to the limitations which the locks place on ship dimension
and the time involved in lock operation.
While any of the canal sites under consideration would be adequate from the standpoint
of naval mobility and logistic support, a wholly nuclear excavated canal at Route 17 would
have advantages over the other routes because of its reduced vulnerability and greater
capacity. The overriding consideration, however, is that the canal to be constructed bea
sea-level waterway.
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CHAPTER III
VULNERABILITY AND DEFENSE REQUIREMENTS
A detailed analysis of the broad spectrum of threats that a sea-level canal would face
indicates that the most probable of the threats are sabotage, clandestine mining of the
waterway, or the attack of shipping in the canal by low-performance aircraft or readily
transportable weapons. The more traditional forms of attack—blockade, naval or aerial
bombardment, or ultimately attack by missile-delivered nuclear weapons—are unlikely.
These would probably be either part of or evoke a general war situation, confronting the
perpetrator with the total military strength of the United States. In addition, such attacks
could fail to inflict sufficient damage to prevent the use of the sea-level canal.
The relative invulnerability of a sea-level canal to most types of attack stands in sharp
contrast to the vulnerability of the present canal, whether or not it has been modernized.
The fact that the present lock canal could be closed by the use of relatively unsophisticated
weapons is particularly significant in view of the forecasts which anticipate that insurgency
and subversion will probably persist in Latin America to the end of the century.
Interruption for extended periods to canal service, which could be achieved with relative
ease, would not only seriously hamper the logistical support of military operations in time
of war but also adversely impact on international trade in time of peace.
The detailed comparison of the vulnerability of the various canals considered indicates
that there is a very significant lessening of the vulnerability of a sea-level canal from that of
the present lock canal. There is a somewhat smaller difference between a completely nuclear
constructed canal and a conventionally constructed sea-level canal, the nuclear canal being
the least vulnerable. This results from the great depth and width which nuclear construction
provides. The sinking of a ship in a nuclear channel would not block it, as very likely would
be the result in a conventionally excavated channel.
It has been argued that tidal gates would make a sea-level canal as vulnerable as the
present lock canal. Such a view is not supported by the facts. The tidal gates proposed for
controlling currents in a conventionally excavated sea-level canal are described in detail in
Annex V, Study of Engineering Feasibility. They would be structurally simple rolling gates
that could be moved laterally across the canal channel as needed. The canal could function
for military purposes without the tidal gates, but they have been incorporated into the plans
to reduce tidal currents to no more than 2 knots, a level at which experience indicates safe
navigation is assured for commercial purposes. Sea-level canal experience is expected to
show that faster currents can be tolerated and that the use of tidal gates could be diminished
or possibly eliminated. If tidal gates were sabotaged while in use, they could be removed
with no more difficulty than removing a sunken ship or blown bridge. Shipping could then
continue to use the canal in somewhat faster tidal currents with some operational
restrictions. Military destruction or sabotage of the tidal gates would have little effect on the
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canal’s use by combat vessels and by the relatively small ships used for logistical support.
DEFENSE REQUIREMENTS
With guerrilla action the most likely possibility, a concept of defense of a sea-level canal
has been developed over the last several years. Initially, it was based on a precisely
delineated buffer zone which would include the tactically important terrain features. Under
continuing review the concept of a defense buffer zone has given way to a concept of access
to critical areas for purposes of surveillance and defense, as required.
Sufficient forces to patrol and defend the canal against surprise attack will be stationed
on the Isthmus. Under conditions of Limited or General War the necessary naval, ground,
and air augmentation forces, adequate to meet the threat, would be brought in through
prepared port and air base facilities at the site of the sea-level canal and those bases
remaining in the Canal Zone. The permanently stationed defense forces vary between the
canal sites considered. In general, these forces include airmobile infantry with their normal
combat and service support elements. Air and naval forces would be positioned on or near
the Isthmus as required.
COMPARISON OF DEFENSE CONSIDERATIONS
OF THE ALTERNATIVE CANAL ROUTES
Each route has its own particular defense advantages and disadvantages when compared
with the other routes. Some of these are purely military while others, being political or
psychological in nature, would impact on the security of a sea-level canal.
Both Routes 10 and 14 are conventionally excavated in their entirety. Due to the cost
of excavation the depth of these canals will be much less than that of a nuclear excavated
canal. The nominal depth would be 75 feet. While it would be extremely difficult to close
either a nuclear or a conventional canal by bombardment or even by an emplaced charge,
the conventional canal is more vulnerable to blockage by the sinking of shipping in the
canal. The nuclear canal is less susceptible to this type of blockage because of its great depth
and width. The sinking of a ship in a nuclear canal would at worst only restrict passage, i.e.,
require a deviation in course or reduce speed at the point of sinking.
Route 10 has a major or even overriding advantage over Route 14. Construction of
Route 10 would leave the present lock canal intact with its water supply unimpaired. If
satisfactory treaty arrangements could be worked out, the lock canal could then be held on
a standby basis to supplement or replace the sea-level canal in time of need. From the
commercial and logistical standpoint this arrangement would represent a significantly
increased canal transit capacity which possesses the potential for further growth, i.e., the
conversion of the lock canal to a second sea-level canal.
Both Routes 10 and 14 have a unique vulnerability problem, the barrier dam. The
problem is more pronounced on Route 14 than on Route 10, essentially due to the greater
length and number of dams on Route 14. Detonation of one of these earth-filled dams
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would cause severe canal flooding, bank erosion, and blockage of the canal by earth and
debris. The barrier dams on Route 14 total 15 miles in length. In addition to the barrier
dams, Route 14 has the problem of the Chagres River. The river will be diverted from its
natural course into the canal. If its diversion dams were lost, the river would flow into the
canal creating major navigation problems.
There will probably be fewer problems with the defense of Route 17 than either 10 or
14. The Zone presence will be smaller than at present, removing major United States forces
out of the view of the Panama City/Colon populace. Over the life of the sea-level canal most
defense facilities could be expected to move from the Zone bases to the Darien area as they
become obsolete and maintenance costs require replacement.
Until the core borings from Route 17 were analyzed, this Route represented the nuclear
option. It was selected to be constructed by nuclear excavation in its entirety. The boring
revealed, however, that a 20-mile reach in roughly the center of the route is composed of
weak clay shale which will not permit nuclear excavation of this section under the current
state of the art for nuclear excavation. The AEC believes that with a sufficient future effort
Route 17 could be designed so as to use nuclear excavations throughout its length. This
effort would seek to answer such questions as: (1) The stability of nuclear crater slopes in
clay shales; (2) whether gentle slopes in clay shales can be achieved by using some nuclear
techniques such as the multiple base row-charge or subsidence crater (as opposed to the
usual throw out crater), or by dressing row crater slopes with some inexpensive conventional
earth moving technique, and (3) whether some modification to the alignment of Route 17
could reduce substantially the length or amount of the clay shales. Until the above
mentioned developments are realized, however, Route 17 must be considered as a route
utilizing both nuclear and conventional construction. As a combined route it loses its
advantage of relative invulnerability to blockage by sinking of shipment in the channel. The
varying lengths of the proposed canals affect the defense requirements. Routes 25, 23 and 8
are two to three times as long as the Panamanian routes. Routes 25 and 23 present a set of
complex defense problems. In addition to its greater length, more than three quarters (80
miles) of the canal will have a dredged channel of 550’ x 75’ with the same relative
vulnerability and defense problems as Routes 10 and 14. The nuclear portion of Route 25
which crosses the Continental Divide appears more susceptible to guerrilla attack than the
corresponding part of Route 17, because of the greater width of the mountain range which
constitutes the Divide on Route 25, 25 miles, as opposed to 15 miles on Route 17.
Shipping in the conventionally constructed portion of Route 25 and the Colombian portion
of Route 23 would be susceptible to attack by direct fire weapons from the hill mass which
parallels this route almost continuously for 40-50 miles. The conventionally constructed
portion would have almost no protecting lip or bank as the nuclear portion would. On the
other routes the ridge lines are generally perpendicular to the canal and do not afford the
vantage points of a parallel ridge. While there is a similar ridge on the Pacific end of Route
17 it is much shorter, of less elevation, and at greater range from the canal. Moreover, the
canal on Route 17 would be protected to a significant degree by its 300 ft. nuclear ejecta lip
and because of its greater depth would be much less easily blocked by sunken shipping.
The military issues applicable to a Colombian sea-level canal in general apply to Route
8. The negotiation of a canal defense base agreement with both Costa Rica and Nicaragua
would be necessary in order to have a meaningful defense arrangement. Negotiation of such
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defense agreements would be difficult and coordination of defense operations could be
more complicated and difficult since three national interests would be involved. Route 8’s
principal advantage is its nuclear excavation and attendant lack of vulnerability, although
this advantage is largely academic in that the cost of construction is all but prohibitive.
Overall the Nicaraguan-Costa Rican route does not appear to have any military
advantage over the other canal routes which might mitigate the cost and construction
disadvantages which caused the Commission not to pursue a more intensive site-survey-type
investigation of this route.
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CHAPTER IV
CANAL SECURITY AS A PART OF REGIONAL SECURITY
It is evident that the affairs of Latin America and the United States will continue to be
bound up together for the foreseeable future. In addition to their geographic proximity, the
two areas share many common bonds—economic, political and social. Transportation and
communication technology, together with this community of interests, may be expected in
the future to expand contacts between North and South America.
In addition to the shared interests just mentioned, North and South America share an
interest in the security of the hemisphere and a need to foster the basic conditions which are
conducive to the growth of political and economic stability and progress throughout the
area.
To further these objectives an environment free from warfare must be preserved and to
this end the states of the Western Hemisphere have created a community of nations to
develop a cooperative approach to hemispheric security. The Inter-American Treaty of
Reciprocal Assistance (the Rio Treaty) drafted in 1947, and the Charter of American States
(Charter of Bogota) drafted in 1948 and recently amended, have resulted from our
collective efforts.
The Charter of American States details the obligations of these states to maintain peace
and security in the hemisphere and denies to any state or group of states the right to
intervene directly or indirectly in the internal or external affairs of any other state. The Rio
Treaty also provides for a collective defense against external threats to the security of the
hemisphere.
A canal in Panama is an important element of hemispheric defense by the Rio Treaty
countries and it is essential that it remain in friendly hands. Thus, canal defense is a key part
of the security interest which the U.S. shares with Latin America. With advances of modern
technology in the field of military weaponry canal defense can no longer be accomplished
solely by defending the immediate area in and around the canal. Air and naval stations are
necessary to extend the line of canal defense outward into the Atlantic and Pacific, and
forces assigned the responsibility for canal defense must be prepared to operate in this
modern environment.
Defense functions will be vital in the future for any of the sea-level sites under
consideration. Properly performed, they will provide defense of the canal and thereby
I-15
contribute to the security of the entire region. The canal will thus continue to contribute to
the ability of the Rio Pact nations to defend against aggression from outside the hemisphere.
II-16
CHAPTER V
EFFECT ON THE NATIONAL DEFENSE
OF THE CHOICE OF METHOD OF CONSTRUCTION
This chapter discusses, from the military standpoint, indirect effects which the choice
of method of construction may have on the national defense. This choice is directly related
to the choice of site. Earlier chapters have already considered the advantages and
disadvantages of alternative sites from the defense standpoint. The present chapter examines
less direct effects, such as the drain on United States construction capabilities, risk of
closure of the present canal during the construction of the new canal, and technological
advances with military utility.
BASIC DATA ON CONSTRUCTION ALTERNATIVES
Two general methods for constructing a sea-level canal are currently under considera-
tion: one using mechanical excavators to accomplish all the excavation, and the other using
a combination of nuclear explosions to excavate part of the main navigation channel (and
possibly part of the flood control system) and mechanical excavators to excavate the
remainder.
DRAIN ON CONSTRUCTION CAPABILITIES
Construction of a sea-level canal would not significantly affect the national defense of
the United States by diverting construction effort, both personnel and materiel.
Personnel
Conventional Construction. The construction on Routes 10 and 14, the routes
considered for construction entirely by conventional methods, would require about 7,000
people, the majority of whom probably would be employed by civilian contractors. The
requirement for government management personnel in key positions is roughly 50 men. The
project would require the services of 30-50 outstanding consultants in the fields of
management, design and construction, employed on a part-time basis. The’ government
design and design support staff required for a project of this size would number about 600
people, including support groups, such as construction support, supply personnel and
finance, and field personnel, such as survey crews. At peak strength the construction force
in the field would have the following strength:
I]-17
Government supervision 400
Contractor personnel 6,000
Medical personnel 200
These numbers compare with the following data on contract employees, in millions,
engaged in construction in the United States:
1966 1967 1968
All Contract
Construction 3.19 3.28 S21 3.27
General Building
Contractors .99 1.03 98 99
All Heavy Construction
Contractors .65 .67 .66 .68
Highway & Street
Contractors .32 cD aSit 2o2
Other Heavy Construc-
tion Contractors oY 23D .36 36
*Estimated on basis of incomplete data for the year.
In 1968 the total number employed in heavy construction and highway and street work
was 2,450,000. In a “worse case†situation, it is assumed that the approximately 7,000
workers needed on canal construction were all United States personnel. This would mean
that less than .3% of the total United States construction force was involved. The “‘worse
case†does not represent a significant diversion of capability from a national defense
standpoint and, moreover, it is unlikely to occur as a considerable portion of the work force
will most probably be indigenous to the host country.
Nuclear Construction. The construction of Routes 17 and 25 by nuclear construction
methods will reduce the numbers of contractor personnel required to about 4,000, but
would raise the skill level over that required for conventional construction only. The
management requirements will remain basically the same as those for conventional
construction. The number of consultants would be increased to a total of 50-60 to furnish
consultants in nuclear as well as conventional fields. The design and support staff would
require about 700 people for Route 17 and 1200 for Route 25. These numbers would
include people qualified in conventional construction as well as people trained in nuclear
excavation design. At peak strength the construction effort would involve the following
people in the field:
Government supervision 395
Contractor personnel
(Route 17) 4,000
Contractor personnel
(Route 25) 5,000
Medical personnel 250
While the number of personnel involved for the nuclear construction alternatives is
I-18
smaller than for conventional construction, the demand for highly trained and experienced
specialists from the nuclear energy field would probably be more significant from the
standpoint of national defense than the overall numbers of people involved in any of the
alternatives.
Materiel
Some idea of the possible drain on construction materiel can be obtained by comparing
the dollar cost of construction in the entire United States.
Conventional Construction. On the basis that Route 10 could be constructed in 14
years, the average annual contract costs would be about $200 million. Assuming the peak
year contract cost to be half again that of the average year, the peak year construction
contracts would be approximately $300 million. The estimates compare with the following
construction data for the United States ($ billion):
1966 1967 1968 1969*
Total New Construc-
tion Put in Place $75.1 $76.2 $84.7
Total Private Bile 50.6 57.8
Total Public 2 24.0 25.6 Zieh
Heavy Construction 19.2 19.9 20.8
*Estimate is based on incomplete data for the year.
The peak year amount given above for canal construction would be .4% of the total
1969 construction, 1.2% of total 1969 public construction, and 1.3% of 1969 heavy
construction. Route 14 would require 16 years to construct at a slightly higher cost.
Because Routes 10 and 14 consist mostly of excavation, demand on construction
materiels is expected to be modest. An exception is chemical explosives of which possibly a
million tons may be used during the construction period. Special manufacturing provisions
may be required to supply this increased demand.
Conventional construction requires large amounts of specialized equipment which must
be delivered in a relatively short period of time before construction is started. This
equipment will probably be specifically designed for the project and might consist of a
substantial number of special earthmoving machines and several large dredges.
Nuclear Construction. The nuclear routes may be less costly and take equal or less time
than converting the existing canal to sea-level operation. Thus, the national defense
implications of diverting construction effort would be even less than for converting the
existing canal by conventional means. The requirement for specialized equipment, such as
large diameter drilling equipment, and the need for advanced procurement orders must be
recognized.
Nuclear construction of Route 17 and Route 25 would require about 250 and 150
nuclear explosives respectively, with a total yield for both in the range of 120 megatons.
II-19
The amount of fissionable and thermonuclear materiel required for this number of
explosives would be small compared to the total United States stockpile and therefore
would not have any unfavorable national defense implications. Special manufacturing
facilities may be required to fabricate the explosives themselves.
TECHNOLOGICAL BENEFITS
Conventional Construction
Construction of a sea-level canal by conventional means would produce technological
benefits primarily in the field of excavation equipment and techniques. A project of this size
and magnitude would use the most modern equipment and methods. Machinery of novel
design could be used and would be specifically adapted to the canal excavation. The
experience and advances in technology gained thereby would be useful not only in civil
projects involving large quantities of earth moving, but also in military projects of a similar
nature.
The experience gained by engineers engaged in such construction has a carry-over into
civil and military fields in the areas of planning, organization, and execution of projects of
large scale which require the coordinated efforts of many engineering and administrative
agencies.
Nuclear Construction
The development of nuclear excavation technology which must precede nuclear
construction of a sea-level canal would probably be of greater significance to the national
defense than any other indirect effect discussed in this chapter. The technological benefits
could be greater than from the use of conventional earthmoving methods.
Beyond the development of technology, the development program and the construction
of a sea-level canal by nuclear means would result in increasing the United States pool of
trained and experienced people in an important area of the nuclear energy field.
CLOSURE OF THE PRESENT CANAL
Depending on the plan finally adopted, conventional construction of a sea-level canal
along Route 14 might involve risk of accidental closure of the present canal, as well as
deliberate closure for some limited period of time, in effecting the changeover of sea-level
from the present level of Gatun Lake, 82-87 feet above sea level. The deliberate closure for
short periods of time (currently estimated at 30 days), accurately forecast in advance, would
not have serious defense implications.
The risk of accidental closure stems from the possibility that excavation in or near
present slopes may result in an unstable condition which would lead to a major landslide
blocking the present lock canal or the sea-level canal after conversion. Depending on the
magnitude of such a slide, it could close the interoceanic waterway to traffic for a period of
I-20
months. If Gatun Lake were emptied, the lock canal could be out of operation for as long as
two years. The denial of the canal to both defense and commercial shipping for such a
period could have a serious adverse effect on the national defense.
A major advantage of Route 10 over Route 14 as the route for a conventionally
excavated canal is the fact that Route 10 can be constructed without risk of interference
with the traffic in the existing canal. Route 10 is located approximately ten miles west of
the existing canal, a sufficient distance to preclude canal closure by accident. It would also
preclude the planned closure for changeover.
I-21
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11-22
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THE ATLANTIC -PACIFIC
INTEROCEANIC CANAL
- STUDY COMMISSION
UC 6
SY CTT | CD eB aT
ANNEX Il
REPORT OF THE STUDY GROUP
ON
CANAL FINANCE
Submitted to
The Atlantic-Pacific Interoceanic Canal Study Commission
October 1970
a i oe ee
REPORT OF THE STUDY GROUP
ON
CANAL FINANCE
Table of Contents
Chapter
I.
II.
IIT.
IV.
Wie
TING RO DW CTO Nee oe en Ore SI ee owen CELE
Ate ARUEPOSSIOM ter SLUGWs ees cust cis Gisieud Oo cn eerEs Sor es
Dee SCOPE OMe StUCVa Are incense atic tmnt serene re enore Ts
Cree SUI VaRKeSCl tall Onlerneret et reson aetna eee ea eee
PERSON se
JNINVAILASISS ANINID JEWW/ANILIUVNIIOIN,. Ga cencacenconedotnuanedes
ASPAINtrOdUCtIONe By. ole CO ene ae ee en ee
BeAr aly ticalhactorsa ees eee ere hee oe ee ere
C. ]2COMOTMNG JBVAOATIOM oocthcadesscacc cabo buon aeoden os
DPembayoutsAnalysiss erate ct cee ee atte ee cle mente hae
MEE OD SORBEINAN CINGaneeeerren erin ene
/NVegers Gre Ne iiall Pagespere ce ene an aren Pree PORE Wine econ rect eee tenner kt Wee
Be PrincipalvAltematives) 2a. sees seen ee eo ae oO ome ne
C. Interest Costs under the Two Alternatives ...............
CONCEUSIONS iretetse street er siaies eo cae aiees els she sreoee is eyeacue
Appendix
Lee eA © WAUAINVAME VSI Ss cr ccc caste cere a ro oeie le ees anise ariel shies
II-iti
INntrOdUctOnt eater cere ae cocaine teeter ners
Cos@EstimatesitonEanall@ptionss eee eee ene
Iireainy (Cost amal Lame) USS coccoocoscscusdccosubsscbon
Forecasts of Cargo Tonnage and Transits.................
PrOjectedWReveniesmss staat eee Mee rd ence ait ta oe ENE
LENS to) AOS COUMERNES sooscoccocoousuoucosunoee
Page
IlI-1
IIl-1
III-1
III-3
III-5
III-5
TII-5
I-11
IIl-12
IlI-12
III-17
IlI-19
III-19
I-22
III-30
IlI-36
III-51
Ifl-51
I-52
I-54
III-57
III-A-1
List of Tables
Table Page
Il-1 Annual Cost of Operating and Maintaining The Panama
Canvall . s.,2:2/50:h CR SO Oe Se et Ee ee ee III-11
I]-2 Projected Transit Requirements for A Sea-Level Canal ............. Ill-14
IIIl-1 Route 10: Net Revenue as a Percentage of Construction
CostzandINewW orthibysOpenine) Daten sere eee III-32
III-2 Route 10 — By-Pass Project: Net Revenues, and Net
Revenuesias aybercentace of Constuctionl Costurera eee IlI-33
IIIl-3_ Route 14S: Net Revenue as a Percentage of Construction
CostaandiNet Worthiby.Openines Dace sao eect III-35
Il-4 eCostof Replacement of Exastingseocks Candles ae ae eerie IlI-36
Ill-5 Route 15: Net Revenue as a Percentage of Construction
CostyandiNet Wornthsby, © penin oa Date mera eae III-38
IlI-6 Route 10: Recoverable Construction Costs at Current
Panama; Canal-WollPRates\a tae eee Oe ee iE eee III-46
IlI-7 —Self-liquidating Tolls for Route 10 as Affected by
(iransitiGapacity. Mrcione chest oor ne Oe SECC III-46
III-8 Canal Options Ranked by Self-liquidating Tolls ................... IlI-49
Al-1 Route 10: Self-liquidating Toll, Financing Separate
andi@ombinediwithvbanamalCanallrrsssee ree III-A-6
Al-2 Route 10: Effect on Self-liquidating Tolls of Various
TolliChange Dates: ¢ ..2. 6 i secies cee Se ce: OD ee III-A-7
Al-3 Route 10: Comparison of Early and Late Completion
PALES a cesancye Fass sn ce ahd 5 ee ee sR eT cee eRe OE III-A-7
Al-4 Route 10: Comparison of Early and Late Toll Change
Dates cs 54 acu SS Biel oe ee Se ee ee One re Ill-A-11
Al-5 Route 10: Comparison of Early Completion Date and
Late Toll Change Date with Late Completion
Dateand Eanlyolli€hangeiDate wane eee eee eae III-A-11
Al-6 Route 10: Estimated Peak Debt for a Sea-Level Canal
on Route 10 Operated in Conjunction with the
Panama‘ @analh ..3.c seek See oe eee III-A-15
Aleys~ (Route VOB. 5.250. 2i ec ae sloiia Wetilsedie ee eee III-A-15
Al-8 Route 10: Recoverable Construction Costs at Current
Panama’ C@anallollURates:..2., 8-3 ocoscie oo oe eee III-A-27
Al-9_ Route 10: Effect of Transit Capacity on Self-
liquidating: Tolls: 7.052 eee oe Oot Ee eee eee III-A-28
AMON Route OsEffectstof alBy-passi me Arena eiceiterinn tea eee III-A-28
AN li Comparisoniof Routessl Ofamclala'S se geeere wees ayaa esse er III-A-3 1
Al-12 Comparison of Sea-Level and Lock Canal Options ................. III-A-37
Al-13 Canal Options Ranked by Self-liquidating Tolls ................... III-A-40
III-iv
Figure
Il-1
II-2
II-3
Il-4
III-1
III-2
III-3
IlI-4
III-5
IlI-6
III-7
III-8
III-9
IlI-10
IlI-11
IlI-12
IlI-13
Ill-14
Al-1
Al-2
Al-3
Al-4
Al-5
Al-6
Al-7
Al-8
Al-9
Al-10
Al-11
Al-12
Al-13
Al-14
Al-15
A1-16
Al-17
Al-18
Al-19
List of Figures
GanalWRoutesimer reer cy rede rarer teen ba hatte aay i aati beware toate eh cas
Isthmian Cargo Tonnage: Actual and Projected ...................
Projected Revenues Based on Current Panama Canal Tolls System .....
Projected Revenues Based on Restructured Tolls System ...........
Panama Canal: Estimated Payout Date of Debt vs. Interest
Continued Operation of Present Panama Canal ...................
Canal Demand and Existing Capacity: Potential Tonnage
PROJE CU ONE sake cera at era PROPS Near ae care sun ek ca tech esect aes ane wel
Canal Demand and Existing Capacity: Low Tonnage
PROje CHOI nts tein aus causa ny a te Sie ecodiy ta nay Re aA wcuree uN ehucaseehiviua, sete ouscoas
Net Revenue as Percentage of Construction Cost: Route 10 .........
Net Revenue as Percentage of Construction Cost: Route 14S .........
Net Revenue as Percentage of Construction Cost: Route 15 .........
Route 10: Toll Per Cargo Ton vs. Canal Opening Date .............
Route 10: Cash Flow Analysis (Low Tonnage, 46% Mix) ...........
Route 10: Cash Flow Analysis (Potential Tonnage, 25% Mix).........
Route 10: Cash Flow Analysis (Potential Tonnage, 25% Mix).........
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Cash Flow Analysis—Effects of a By-pass ...............
Route 10: Toll Per Cargo Ton vs. Canal Opening Date .............
Route 10: Toll Per Cargo Ton vs. Canal Opening Date .............
Route 10: Toll Per Cargo Ton vs. Canal Opening Date .............
RoutemlOteashthlowsAnalysismre aera eerie aie
RouteslOs Cash Blow Analy sisy ssccss 5 cect ecce coe 6 oe Sere sear eeu s oie as
RoutesOsCashsklowsAnaly sis en eee cece eee
Routed OnCashuBlow Analy sist yas arene seen a oracles eels crebele
Roum Os Cain Roy†AMHIMNGIS ¢ 5 op boc cocdonscnudcaduacucadouued
Route lis Cash BlowsAnaly sist: ccna s ace soe ease oe eae
RonteslOsCashiBlowsAnialysisierraeae ene enn ie ane
Route VOsCash BloweAmalysis:... 4s os Seca e ac oes eelecie ad cleicvene, 6 ane
RoutenO-AnalysisiombeakaDebtee anneene eee aio ie aa
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Sensitivity of Toll to Project Cost .....................
Route 10: Sensitivity of Tolls to Transit Capacity .................
Ill-v
Page
III-6
IfI-13
I-15
III-16
ILI-23
IfI-24
III-27
IlI-28
IfI-31
IlI-34
IlI-37
III-40
III-42
IlI-43
I-44
IlI-47
ILI-48
IH-50
IlI-A-4
III-A-5
II-A-8
III-A-9
III-A-10
IH-A-12
III-A-13
IlI-A-16
III-A-17
III-A-18
IlI-A-19
IfI-A-20
IlI-A-21
III-A-22
III-A-23
III-A-24
III-A-25
III-A-26
III-A-29
Figure
A1-20
Al-21
Al-22
Al-23
Al-24
A1-25
A1-26
A1-27
Al-28
A1-29
List of Figures (Cont’d)
Page
Route 10: Cash Flow Analysis—Effects of a Bypass ............... III-A-30
Route 14S: Toll Per Cargo Ton vs. Canal Opening Date ............. III-A-32
Route 14S: Toll Per Cargo Ton vs. Canal Opening Date ............. III-A-33
Route14Sx€ashiblowfAnalysise cs aeewetrar. cuss isce coe occas enor III-A-34
Route lS Woll Per@arzoMionwssCanaliOpenine Dates.) ee III-A-35
Route 15: Toll Per Cargo Ton vs. Canal Opening Date ............. III-A-36
Routes CashtblowsAnalvsisheaeshin. cesar sicen cielere et eeten renee III-A-38
RouteslS:€ashi blowsAmaly sis aa seein ete ict cee ine ee ee III-A-39
Panama Canal: Estimated Payout Date of Debt vs.
ItEneStHRATC Sess eet eee erent cect Re enero eae III-A-41
Continued Operation of Present Panama Canal ................... III-A-42
III-vi
Chapter I
INTRODUCTION
Purpose of the Study
In October 1965, the Secretary of the Treasury, at the request of the Atlantic-Pacific
Interoceanic Canal Study Commission, agreed to provide the Chairman for an inter-
departmental study group to assess the financial feasibility of a new, sea-level Isthmian canal
and to examine alternative methods for financing the construction and operation of such a
canal. Mr. R. Duane Saunders, then the Director of the Office of Debt Analysis and
subsequently Assistant to the Secretary (Debt Management) until July 1969, was initially
assigned responsibility for this task. In July 1969, Mr. Edward P. Snyder, Director of the
Office of Debt Analysis, became Chairman of the Study Group.
The purpose of the Canal Finance Study was described by the Commission as follows:
To examine the methods available for financing the construction and
operation of a sea-level canal; and in cooperation with other agencies
and the Commission, to analyze the implications of each approach.
In the ultimate sense, the purpose of the Canal Finance Study is to
provide comparative analyses of the economic and financial costs of
alternative canal proposals so that the Commission can give appro-
priate weight to these costs of the various alternatives in arriving at
its final recommendation. The narrower objective is to develop a
feasible plan for the financing of the recommended alternative.
Scope of the Study
The Commission’s instructions to the Canal Finance Study Group were incorporated in
a nine point topical outline:
Is it possible to finance a sea-level canal through tolls?
What sources of finance are feasible?
What are the alternative methods of financing a sea-level canal?
Priority of payments on capitalization.
What related costs should be included in the analysis?
Residual interests.
Construction and operating costs.
Net revenue available.
. Financial plan.
The Canal Finance Study Group undertook to examine only those issues which might
have a direct bearing on the financing of the construction and operation of sea-level and
other canal options under consideration. Within this relatively limited framework,
AS ON e e
III-1
examination of the economic and financial implications of the canal options has involved an
analysis of the results of the other Commission studies, particularly the construction and
operating cost estimates developed for the Study of Engineering Feasibility and the projected
traffic and revenue estimates contained in the Study of Interoceanic and Intercoastal
Shipping.
The Study Group did not attempt to evaluate (1) the effects of a new canal on the
economies of (a) the potential host countries (b) the United States or (c) third party
countries, (2) foreign relations benefits or costs (except for the costs of directly related
payments to the host country), or (3) national defense values of a sea-level canal. These
matters fall more directly within the purview of other study groups, and the Commission
has concluded, in coordination with these study groups, that quantitative dollar values
cannot be placed on the non-revenue benefits and burdens attributable to a new
interoceanic canal. Exclusion of these broad questions from the Finance Study limits the
overall value of the Study. In particular, a complete economic evaluation of a sea-level canal
project requires that judgments be made on the foreign policy, defense and other values and
costs associated with a particular decision.
The primary analyses of the economic and financial implications of the canal options in
this Study are limited to the evaluation of Routes 10 and 14 Separate in Panama, for which
conventional excavation is assumed. The addition of a third lane of deep-draft locks to the
present Panama Canal and continued operation of the present canal also are considered but
in less detail. Route 25 in Colombia, involving nuclear excavation along the portion that
traverses the Continental Divide, has not been analyzed, largely because of uncertainties
concerning the feasibility of nuclear excavation at the present time.
This Study treats only with costs and revenues directly associated with transiting ships
between the oceans. An organization concerned with building, operating, and maintaining
new canal facilities may have other commercial activities. No costs or revenues from any
such activities have been included in the analyses in this Study.
Within its limited scope, the basic question which the Finance Study attempts to
answer is whether any of the alternative proposals would be a commercially feasible venture.
The costs and revenues associated with the various canal options were examined to
determine whether the additional revenues which would be earned by the new facilities
would be sufficient to recover their capital and operating costs. This analysis is characterized
as the ““economic evaluation.†Also examined were assumptions under which the books of
account of a canal operating agency would show a recovery of costs after 60 years of
operation. This examination involved analysis of various combinations of revenues to be
credited to the agency at different toll rates, reimbursable costs to be charged against the
agency, and rates of interest charged the agency on its reimbursable capital. This is
identified as the “payout analysis.â€
A detailed financial plan, which was an original objective of this Study, would
necessarily incorporate factors that include the final recommendations of the Commission as
to whether and when additional facilities should be constructed, the terms of any new
treaty agreements, and any revision in the tolls system. The general circumstances under
which additional facilities would be commercially feasible, or under which self-liquidating
financing could be anticipated under the payout analysis, are broadly included.
IlI-2
Since costs would be incurred over a period of years and revenues also would be
realized over a period of years, they must be placed on a common basis for comparative
purposes. This is done by discounting future costs and earnings to a common date using
appropriate interest rates for this purpose.
To permit rapid revision of the economic and financial analyses as new data on costs
and revenues were received, a number of computer programs were developed so that new
variables could be introduced for machine analysis. The results are presented graphically and
in tabular form to show the impact of changes in variables.
Study Presentation
Chapter II summarizes the estimates of costs and revenues derived from the Study of
Engineering Feasibility and the Study of Interoceanic and Intercoastal Shipping, respec-
tively. Chapter III provides analyses of alternative canal proposals, presenting both the
“economic evaluation†and the “payout analysis.†Chapter IV discusses alternative methods
of financing. Chapter V presents conclusions derived from the economic evaluation and the
payout analysis.
III-3
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Chapter II
COST AND REVENUE ESTIMATES
Introduction
This Chapter summarizes the basic estimates of construction costs, operating expenses,
and revenues from projected interoceanic canal traffic upon which the economic evaluation
and payout analyses in this Study are based. The construction cost estimates, obtained from
data developed for the Study of Engineering Feasibility, are based on evaluation of data
from field surveys, previous reports, and engineering design studies. The revenue estimates
from the Study of Interoceanic and Intercoastal Shipping are based on two estimates of the
growth of cargo tonnage.
Cost Estimates for Canal Options
Figure II-1 diagrams the routes considered in the sea-level canal investigation. Based on
a comparative analysis of all the sea-level canal routes, the Study of Engineering Feasibility
concluded that Route 10 in Panama was the most desirable for a sea-level canal from an
engineering standpoint and that Route 14 Separate (14S) in the Canal Zone was the next
most desirable alternative. It was also concluded that, if nuclear excavation should become
feasible, Route 25 in Colombia would be the least expensive sea-level canal alternative. The
Study of Engineering Feasibility also developed cost estimates for Route 15, the
designation given to an improved lock canal along the existing Panama Canal alignment.
These estimates are based essentially on adding a lane of deep-draft locks to the present lock
canal.
All conventionally excavated sea-level canals would be designed for alternating one-way
convoy traffic and would have a single channel 550 feet wide, with a parabolic bottom 75
feet below mean sea level at the edges and 10 feet deeper along the center line. A channel of
these dimensions would be able to accommodate ships of 150,000 deadweight tons (DWT)
under all conditions, and ships of 250,000 DWT under selected favorable conditions. Ocean
approaches would be 1,400 feet wide and 85 feet deep, suitable for two-way traffic. The
plans include provisions for gates to control tidal currents induced by tides, when necessary.
A tug boat fleet would also be provided to assist navigation through the canal. Necessary
supporting facilities such as roads, anchorages and buildings were also included in the cost
estimates. Because essentially all of the military installations needed for the defense of a
sea-level canal within Panama could be adapted from existing installations in the Canal
Zone, the additional costs for this purpose would be small and are not included in the cost
estimates.
The estimates of costs of continued operation of the existing lock canal include an
allowance for the cost of the Canal Zone Government, which amounted to $23.4 million in
III-5S
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IlI-6
fiscal year 1969. The cost estimates for the sea-level canal options do not include such an
allowance on the basis that reduced U.S. personnel requirements and a greater reliance on
local personnel would reduce such costs. To the extent that some Government functions are
found necessary for sea-level canal operation, the analyses in this Study may overstate the
economic and financial feasibility of the sea-level canal options.
Route 10
Route 10 crosses the Panamanian Isthmus through generally low-lying country about
10 miles southwest of the existing lock canal. The land cut, which would intersect portions
of Gatun Lake, would be 36 miles long. The ocean approaches would be 17 miles long. The
maximum elevation in the area to be excavated is about 430 feet. Compared to other routes
it has several advantages, such as short length, easy accessibility, low elevations, and little
need for supporting facilities beyond those already available at the Panama Canal. These
advantages are all reflected in the relatively low estimated construction cost for Route 10.
The Engineering Feasibility Study concluded that a conventionally excavated single-
lane sea-level canal on Route 10 would cost about $2.88 billion to design and construct; this
cost includes provision for tugs which are needed for the safe operation of the canal. The
funds would be expended approximately as follows during the 14 years required for
completion:
Year Funds required
($ millions)
11
11
54
152
253
306
306
298
257
10 257
11 275
12 267
13 250
14 183
OOAONDOBRWN —
Cost of operation and maintenance of a sea-level canal on Route 10 would amount to
$35 million a year plus $640 per transit. This includes all costs associated with tugs which
would accompany most ships.?
1 Since tugs are essential for the safe transit of ships through the canal, tug service as required was assumed to be an
integral part of the services furnished for the tolls paid by all ship operators. This differs from present Panama Canal
practice in which tugs are provided as required by canal operating rules, but individual ship operators are charged for the
tug services in addition to tolls.
III-7
Certain of the facilities furnished as a part of the original sea-level canal construction
would require replacement before the end of the period for which the finances of the canal
are being examined. The year when the replacement is required and its estimated cost are
tabulated below:
Year after opening Estimated cost of Annual depreciation
replacement is required replacement, $ millions expense, $ millions
25 3 ml
30 18 O
40 44 1.1
Upon opening of the sea-level canal for full operation, it was assumed that the Panama
Canal would be placed in a stand-by status for about 10 years to provide a transit facility in
case of interruption to traffic in the sea-level canal on Route 10. To maintain the lock canal
in a status of limited operational readiness would cost about $4 million a year. After 10
years, the lock canal would be mothballed at an estimated cost of $1 million, and
maintained in this status at a cost of about $1 million a year.
The transit capacity of the sea-level canal on Route 10 would be at least 38,000
passages a year. The capacity could be increased to 56,000 transits a year or more by the
addition of a centrally located by-pass. The by-pass would cost $460 million and would take
about four years to construct. Operation and maintenance cost would decrease about $1
million a year because of improved efficiency of operations.
Route 14S
This route lies wholly within the present Canal Zone and follows closely the lock canal
alignment. It takes advantage of excavations made for the Third Locks Project in
1939-1942. The land cut, which would traverse the widest part of Gatun Lake, would be 33
miles long. The ocean approaches, including the reach across Limon Bay, would be 20 miles
long. The maximum elevation in the area to be excavated is about 450 feet. Route 14S
generally enjoys the advantages of Route 10 but its construction would interfere with
operations in the lock canal, increase the risk of causing slides into the lock canal which
might block the canal for traffic, and eliminate future use of the lock canal as a temporary
alternative or an addition to the sea-level canal.
The cost of construction of a canal along Route 14S is estimated to be slightly more
than that for Route 10. Route 14 with the cut through the Continental Divide separated
from the present canal would cost about $3.04 billion for design and construction including
IL-8
the cost of tugs. Funds would be expended approximately as follows during the 16 years
required for completion:
Funds required
Year ($ millions)
1 11
2 ll
3 40
4 179
5 321
6 366
7/ 364
8 317
9 284
10 262
11 250
12 215
13 140
14 121
15 91
16 68
Fixed operation and maintenance cost, the additional cost per transit, and the schedule
and cost for major replacements would be the same as for Route 10. Route 14S would
divide and lower Gatun Lake, and thus preclude the use of the Panama Canal as a standby
for the sea-level canal. Accordingly, no costs for standby operation or mothballing the
Panama Canal were included in the analysis of Route 14S.
The capacity of Route 14S would be at least 39,000 transits a year. Capacity could be
increased to 55,000 transits a year or more by shortening the length of the restricted cut.
This would cost $430 million and require four years for construction. Operation and
maintenance cost would be reduced about $1 million a year because of improved efficiency
of operations.
Route 25
This route lies wholly within Colombia and generally parallels the Panama-Colombia
border. The total land cut is 98 miles in length; the ocean approaches are five miles long.
The disadvantages of long length and lack of existing supporting facilities would be more
than offset by the expected savings if nuclear excavation were technically feasible at an
estimated cost of $2.1 billion. Route 25 is not included in the economic evaluation or
payout analysis largely because of the uncertainties surrounding nuclear excavation.
Route 15
The Route 15 option analyzed in this Study consists of the new plan for adding deep
draft locks to the Panama Canal described in the Study of Engineering Feasibility. In
IlI-9
addition to new large locks, the plan includes widening and deepening channels, augmenting
the lockage water supply, and other features. These improvements would cost $1.53
billion, would be capable of handling ships up to 150,000 DWT, and would provide for a
total transit capacity through the improved canal of 35,000 ships a year. The approximate
annual expenditures for the 10 years required for construction are tabulated below:
Funds required
($ millions)
10
20
100
200
220
220
220
220
220
100
<
@o
o®
®
OOONOORWN —
—_
In addition to the cost of operation and maintenance of the present canal, the
operation and maintenance of the deep draft locks would cost $13 million per year. There
would also be an additional cost of $1,600 per transit for all transits over 26,800 a year.
This amount includes $800 per transit for pumping lockage water. There would be no
separate charge against canal users for these costs. Tug charges, about $0.024 per cargo ton,
would be in addition to these costs. Consideration would also have to be given to the
possible replacement of the existing locks.
Continued Operation of the Present Panama Canal
An alternative to building a sea-level canal is the continued operation of the Panama
Canal. It has been estimated? that the present canal can accommodate 26,800 transits a year
provided improvements at an estimated cost of $92 million are undertaken. The tonnage
estimates in the Shipping Study suggest that the demand for transits, at the existing toll
levels, could reach 26,800 annual transits as early as 1990.
Estimated annual cost of operating and maintaining the lock canal from 1971 to 2000
is indicated in Table II-1, based on information provided by the Panama Canal Company.
Annual costs range from $79 million to $92 million over the period in constant dollars and
include the costs of the improvement program proposed in the Kearney Report.
The debt on which the Panama Canal Company pays interest to the U.S. Treasury
amounted to $317 million as of June 30, 1970. In certain of the evaluations this $317
million has been used as the indebtedness of the Panama Canal Company. However, it
a “Improvement Program for the Panama Canal, 1969â€, A.T. Kearney and Company, Inc.
IlI-10
TABLE II-1
Annual Cost of Operating and Maintaining The Panama Canal
(millions of dollars)
pass eurent Depreciation Operation Added Total
Annua Cat on of
Transits Improvements Improvements
Pilotage Cost
1971
1975
1980
1985
1990
1995
2000
(and after)
should be pointed out that, as of the same date, the total unrecovered United States
investment in the Canal, including unpaid interest accrued since 1903, was estimated by the
Company to be $700 million, excluding defense costs.
The present canal has been in operation for 56 years. As a result of continuous
maintenance and improvements the canal continues to be in excellent condition capable of
being operated for many years. It is not known, however, whether or when the existing
locks might require replacement. The cost of such replacement has not been estimated but
an approximate cost of $800 million has been used for evaluation purposes. Construction
has been assumed to take six years. Transit capacity would remain at 26,800 a year (with
the improvements recommended in the Kearney Report).
Treaty Cost and Land Use
The cost of real estate acquisition and easements has been estimated for the various
routes as indicated below:
Cost of Real Estate
Route $ millions
10 27
14S 2
15 0
No lump sum settlement cost with the host country for land use is included in the
analysis since royalties are assumed to provide the entire reimbursement to the host
country.
Ill-11
Forecasts of Cargo Tonnage and Transits
The Shipping Study presents two forecasts of cargo tonnage through a sea-level canal.
The two estimates are called the “‘potential tonnage’ forecast and the “low tonnageâ€
forecast (Figure II-2). The potential tonnage forecast is considered reasonable by the
Commission, but with recognition that no forecast for so long and distant a period can be
relied upon unequivocally. The low tonnage forecast provides for possible lower future
traffic and has been adopted by the Commission for determining financial risks. The
projected tonnage for the two estimates is summarized below for bench-mark years:
Projected cargo in millions of long tons
Year Potential Forecast Low Forecast
1970 111 111
1980 157 171
1990 239 218
2000 357 254
2020 643 325
2040 778 403
For the purpose of estimating transit requirements, the Shipping Study developed a
range of possibilities concerning the cargo distribution of the future among freighters, dry
bulk carriers and tankers. A methodology, which included consideration of projected ship
characteristics of future interoceanic canal traffic, was employed to convert the projected
cargo mix into a projection of transits for canal capacity planning and revenue projection
purposes. It was concluded that the future mix of ships carrying cargoes through a sea-level
canal could range from the present experience of the Panama Canal, in which 46% of the
cargo tonnage is carried in freighters and 54 percent in dry bulk carriers and tankers, to a
much higher ratio of bulk carriers and tankers by the year 2000 and thereafter, i.e., 75%
with only 25% of the cargo tonnage moving in freighters. For revenue projection purposes
the 46 percent freighter cargo mix was used with the low tonnage forecast, and the 25
percent freighter cargo mix with the potential tonnage forecast.* Table II-2 shows the range
of forecast transits associated with the forecasts of cargo tonnage and cargo mix.
Projected Revenues
Revenue computations in the Shipping Study were derived by converting current
Panama Canal revenue experience to an average toll per ton of cargo for each type ship and
by weighting according to estimated cargo distribution among the types of ships. Thus, tolls
are stated in terms of dollars per cargo ton as an expedient for relating cargo tonnage and
cargo mix to gross revenues.
Tolls for the existing Panama Canal are levied on the basis of the Panama Canal ton
which consists of 100 cubic feet of cargo carrying space. Laden ships pay $0.90 per ton and
ships entirely in ballast $0.72 per ton. Certain other ships pay $0.50 per displacement ton.
The present tolls system produces gross revenues which currently average approximately
3 If the higher tonnage were realized, it would presumably include a much higher proportion of bulk commodities moving
on larger ships and a lower proportion of freighter cargo.
Iil-12
Millions of long tons of cargo
1000
oa oO ~ 0 0
Potential tonnage
forecast ~
;| ee ae a:
| A 1
NTT
9
8
am al la ee IN ld
eT eanama Canatexparince | | |_|
ISTHMIAN CARGO TONNAGE: ACTUAL AND PROJECTED
FIGURE II-2
IlI-13
TABLE II-2
Projected Transit Requirements
For A Sea-Level Canal '
Total number of transits
“Potential†: “Lowâ€
tonnage? : tonnage®
1 or a canal which can accommodate ships up to 250,000 DWT.
225% of cargo in freighters.
346% of cargo in freighters.
$0.884 per long ton of cargo. Bulk cargoes produce less than average revenue per cargo ton,
and a trend toward increased proportion of bulk cargo would result in a lower gross
revenue per ton of cargo transited under the current toll assessment system. The 25 percent
— 75 percent ratio projected in the Shipping Study would produce gross revenues averaging
approximately $0.777 per ton of cargo under the present system.
Figure II-3 shows projected revenues under the present Panama Canal toll assessment
system. The projected revenues depicted in Figure II-3 are based on the Shipping Study
estimated average toll rates of $0.884 per cargo ton for the “low†tonnage, 46% freighter
cargo mix forecast, and, reflecting the declining proportion of freighter cargo, $0.884
declining on a uniform annual basis to $0.777 per cargo ton in year 2000 for the
“potential†tonnage, 25% freighter cargo mix forecast.
The Shipping Study also concluded that a restructured assessment system could
produce approximately 40 percent greater revenues from an average tolls increase of 50
percent, without markedly affecting the traffic growth expected under the present Panama
Canal tolls sytem. This restructured system would involve selective increases of as much as
150 percent on some cargoes and reductions below the present levels for some bulk cargoes.
Figure II-4 shows projected revenues under the restructured assessment system discussed in
the Shipping Study, assuming the restructured system had been put into effect at the
beginning of 1970. The projected revenues related to the restructured tolls system in Figure
II-4 are based on the same computations as for Figure II-3 but with 50% higher revenues for
year 1970 declining gradually to 40% higher revenue in year 1990.
The projected average tolls per ton of cargo, using the existing Panama Canal toll rates
and structure—which produces $0.884 per cargo ton for the 46% freighter cargo mix and
$0.884 declining to $0.777 in the year 2000 with a decline to 25% in the freighter cargo
Ill-14
Millions of Dollars
Potential tonnage forecast
25% freighter cargo mix
Low tonnage forecast
46% freighter cargo mix
1970 1980 1990 2000 2010 2020 2030 2040
Year
PROJECTED REVENUES BASED ON CURRENT PANAMA CANAL TOLLS SYSTEM
FIGURE II-3
III-15
Millions of dollars
1000
900
800
700
600
500 §
400
Potential tonnage forecast
25% freighter cargo mix
NA Low tonnage forecast
46% freighter cargo mix
1970 1980 1990 2000 2010 2020 2030 2040
Year
PROJECTED REVENUES BASED ON RESTRUCTURED TOLLS SYSTEM
FIGURE I1-4
III-16
mix— form the basis for the revenue estimates that are included in the economic evaluation
in this Study. The payout analysis, on the other hand, assumes a toll structure that
produces a constant revenue per cargo ton without regard to the proportion of freighter, dry
bulk, and tanker cargoes and uses a toll rate of $0.884 per cargo ton (the current average
revenue per ton from total Panama Canal traffic) at least until initiation of construction or
opening of a new canal.
Payments to Host Countries
The 1955 Treaty with Panama provided for a fixed $1,930,000 annuity to Panama. The
1967 draft treaty would have substituted royalty payments for each long ton of cargo
transported through the canal, starting at 17 cents per long ton of cargo upon ratification of
the new treaty and rising 1 cent annually for five years to 22 cents per long ton where it
would remain thereafter.
The Study Group has assumed the following royalty rates for its financial evaluations.
Royalty rate per ton
Year of cargo transited
1971 $0.17
1972 0.18
1973 0.19
1974 0.20
1975 0.21
1976 and after 0.22
IlI-17
Chapter III
ANALYSIS AND EVALUATION
Introduction
General
This Chapter presents and summarizes the analysis of the economic and the financial
implications of various canal options. Two basic approaches are involved in the analytical
process — one designated as the “economic evaluation†and the other as the “‘payout
analysis.†These two analyses are distinguished by the specific questions toward which each
is directed. Economic evaluation attempts to provide a measure of the worth to the Federal
Government, or to the Nation as a whole, of a proposed investment project. Payout analysis,
on the other hand, relates to the books of account of a proposed project, i.e., the extent to
which capital costs, operation and maintenance expense, royalty and other costs charged to
an assumed project operating agency could be recovered from revenues and credits assigned
to the agency. Both approaches, although directed to differing objectives, may be pertinent
to the Commission’s findings and recommendations.
As an example of the application of both procedures, prior to project approval Federal
water resources projects are generally subjected to a thorough examination of the total
benefits which would be created by the project and the costs which would be attributable to
the project. The procedures for conducting these analyses have been formalized in ‘Policies,
Standards, and Procedures in the Formulation, Evaluation, and Review of Plans for Use and
Development of Water and Related Resources’’,! and made applicable to the various Federal
agencies involved in water resources project planning and development. Senate Document
No. 97 provides for consideration of all benefits attributable to the project, whether or not
these benefits generate revenues for the project.
Assuming a favorable outcome of the economic evaluation, indicated by benefits at
least equal to costs either on a present value or annual equivalent basis, the proposed project
may be subjected, where applicable, to a payout analysis in order to determine whether
revenues assigned to the project would be sufficient to amortize the reimbursable portion of
construction costs. A favorable outcome of both the economic evaluation and the payout
analysis (if one is conducted) has generally been a prerequisite to project approval by the
Congress.
The Commission requested that the Finance Study Group consider only the potential
financial returns of the canal options under consideration. A complete benefit-cost analysis,
i Reprinted and popularly referred to as Senate Document No. 97 (87th Congress, 2nd Session).
III-19
however, would take into account foreign policy, defense, and other benefits and burdens
which might be attributable to a canal investment, including what the Commission considers
to be the unique role of an interoceanic canal in the American Isthmus as part of the
world-wide transportation system. In this connection, Federal budgetary procedures
regularly require estimates of the dollar value of all benefits and all burdens. However, in the
case of the interoceanic canal investigation, the Commission has concluded that no
quantitative dollar values could be placed on the non-revenue benefits attributable to a new
interoceanic canal; nor could all the burdens of such a canal be identified or quantified.
Accordingly, the Finance Study Group has applied the procedures generally prescribed for
Federal project economic evaluation using only toll revenues and credits as benefits, and
estimated construction and other identified costs as burdens. Notwithstanding these
fundamental limitations, this analysis is hereafter referred to as the ““economic evaluation.â€
To properly reflect the benefits and costs for the Nation as a whole, only the
incremental benefits and costs are relevant. Because the Finance Study considers only
revenues as benefits, the question of the financial return from the viewpoint of the Nation
as a whole depends upon whether the additional revenues which would be earned as a result
of any new investment, over and above the net revenues which would be earned by the
existing lock canal, would be sufficient to cover the costs of operating and maintaining the
new facilities and to amortize the capital investment with an appropriate rate of return.
While this statement of principle seems easy and straightforward, its application may be
difficult and complex, even apart from problems of estimating technical factors affecting
costs and revenues.
In addition to the economic evaluation described above, which is designed to reflect the
overall net “economic†return to the United States, the Finance Study Group also
conducted payout analyses of the canal options. These analyses illustrate that it would be
possible to create a financially viable canal operating agency even though for the Federal
Government, as a whole, the project may not be economically feasible in terms of the
benefits and costs evaluated in this Study.
The payout analyses are conducted so that the implications for tolls can be evaluated
depending on the portion of the investment determined to be reimbursable, the rate of
interest, and other costs to be charged to the agency. Such determinations may be
appropriate to the extent of the foreign policy, defense, and other non-revenue benefits
attributable to the investment in new facilities which are not considered in the economic
evaluation. In the case of the present Panama Canal Company, for example, the nominal
Federal capital on which interest is paid is less than half the unamortized capital investment
in the lock canal and associated facilities, the rate of return paid on the nominal capital is
far below current market yields, and the bulk of the present annual payment to Panama is
not charged against canal revenues.
Period of Analysis
A 60-year period of operation of the new facilities is examined in both the economic
evaluation and the payout analysis. Each investment option is examined for assumed
opening dates for the new facilities ranging from 1990 to 2020. With construction periods
ranging from 10 to 16 years, the analyses, therefore, treat new construction beginning from
III-20
1974 to 2010. The analyses also assume that the existing lock canal facilities will remain
under U.S. control throughout the period under examination.
Risk and Uncertainty
Risk and uncertainty are involved in any investment project; the outcome may be
better or worse than assumed in the planning. The most appropriate method for dealing
with these factors is to make explicit allowances in the estimations of revenues and costs
and to compute expected values and probability distributions. An alternative is to provide
an allowance against adverse results by using a higher discount rate for project evaluation.
Office of Management and Budget Circular No. A-94 requires explicit consideration of
risks, which has been done on the revenue side in the interoceanic canal studies through
adoption of two “equally likely’ estimates of future tonnage through an enlarged canal
facility. The “potential†and “low†tonnage projections in the Shipping Study Group
Report are intended to provide a basis for an estimate of the range of possible revenues.
Estimated revenues are a function of the tonnage estimate and the toll rates applicable to
the tonnage. However, the level and structure of toll rates, the composition of traffic, and
the volume of traffic transiting the canal are interrelated. The Commission accepted the fact
that the Shipping Study Group was unable to forecast the details of canal traffic so far into
the future, and considered it impractical and undesirable to attempt to prescribe the level
and structure of future toll rates. Therefore, a basic uncertainty must necessarily prevail
with respect to the revenue estimates.
On the cost side, there is historical evidence of construction cost overruns in various
civil works projects. However, faulty estimates, as such, have accounted for a very minor
portion of increased project costs. In any event, the construction cost estimates for the
canal options include contingency allowances averaging 12 percent, which do not appear
unreasonable based on past experience.
Inflation
In both analyses cost and revenue data are in current prices. These are maintained
throughout the period of analysis with no adjustments made for possible changes in price
levels. In this sense, the current price relationships are assumed to remain stable over time.
The Shipping Study concluded that canal tolls could be increased by the amount of
inflation in competing transportation modes without diverting traffic from the canal.
However, toll rates for the existing Canal have not been changed materially since the Canal
was opened, even though the general level of prices and costs has increased substantially. In
addition, the Shipping Study conclusion may need some modification if there are
differential rates of inflation in the cost of competing transportation services.
Inflation could be a significant factor as far as construction costs are concerned.
Approximately 70 percent of the estimated costs involve earth excavation which historically
has experienced only a moderate rise in cost owing to constantly improving technology. In
recent years, however, excavation costs have begun to rise at a rate approaching that of the
entire construction industry.
Ill-21
Royalties
Host country payments are not included in the economic evaluation since the question
of the distribution of benefits is logically separable from the question of the measurement
of total benefits. They are included in the payout analyses as part of the bookkeeping. The
Panama Canal Company, however, is not now charged with the bulk of present payments to
Panama.
Future Finance of the Present Panama Canal
Continued operation of the present Panama Canal provides a benchmark against which
the financial performance of other canal options may be measured. The present canal is not
comparable in terms of maximum ship sizes which could be accommodated by the
contemplated sea-level canal alternatives. The transit capacity of the present canal, even if
improved as recommended in the Kearney Report, would be 26,800 transits a year, and this
traffic level is projected to be reached at various dates from 1989 on. After the present canal
is saturated, it would not be comparable to the sea-level canal options in transit capacity.
The analysis of continued operation of the present canal assumes continuation of Canal
Zone Government costs, improvement of the canal as recommended in the Kearney Report,
liquidation of the cost of this improvement as well as the present debt on which the Panama
Canal Company pays interest to the United States Treasury, and payment of royalties to
Panama. Projected revenues from the present canal would be sufficient to retire the current
debt and amortize the Kearney improvements at interest rates ranging up to about 10
percent, as shown in Figures III-1 and III-2. On the basis of the unamortized capital
investment in the present canal — approximately $700 million — rather than the
interest-bearing debt, the rate of return would be reduced to from 6 percent to 7 percent,
somewhat less than the current borrowing costs of the Federal Government but within the
recent range of these costs. Continued operation of the canal to 2050, assuming this to be
possible without replacing the locks, would build up substantial reserves.
Analytical Factors
Toll Rate and Structure
There would be major differences between a sea-level canal and the existing canal in the
capability to handle sizes and numbers of ships. To determine the economic advantage to be
gained by providing the additional capacity of a sea-level canal it is desirable to compare the
maximum realizable net revenues from a sea-level canal and from the existing lock canal.
This analytical procedure should not be interpreted as advocating an increase in tolls to
maximum levels: pricing policy is complicated and related to aims other than purely
commercial revenues. Nevertheless, estimating the maximum realizable net revenues from a
sea level canal and from the existing lock canal would be useful for evaluating the cost of
achieving additional capacity because the difference would be the amount of net revenue
that marginally could be attributed to the investment in a sea-level canal.
The Shipping Study estimated the demand for transisthmian crossings in cargo tons and
associated transits—the “potential†and “low†tonnage forecasts—and the potential supply
of such crossings in cargo tonnage capacity and related transits of the existing lock canal.
III-22
Interest rate
Potential tonnage
projection (1)
Potential tonnage
projection (2)
Low tonnage ANS P
Projection (1) .
1970 1980 1990 2000 2010 2020
Year in which debt is paid out
NOTES:
1. Toll rate assumed as $0.884 per cargo ton.
2. Tolls based on existing Panama Canal structure and rates.
3. 1970 Panama Canal debt assumed as $317 million.
4. $92 million canal improvement program assumed.
5. Royalties reach $0.22 in 1976.
PANAMA CANAL
ESTIMATED PAYOUT DATE OF DEBT VS. INTEREST RATE
FIGURE III-1
III-23
Present value of excess
of revenues over operation, maintenance
and royalty to year 2050. $ millions.
Potential tonnage
600
Potential tonna
400 a
200
4% 6% 8% 10%
Interest Rate
NOTES:
1. Tolls assumed as $0.884 per cargo ton.
2. Tolls based on existing Panama Canal System.
3. 1970 PCC debt of $317 million and $92 million improvement costs assumed paid out first.
4. Royalties reach $0.22 per cargo ton in 1976.
5. Neither deep draft locks nor replacement locks assumed to be constructed.
CONTINUED OPERATION OF PRESENT PANAMA CANAL
FIGURE III-2
Ill-24
The excess of the tonnage demand forecast over the capacity of the existing lock canal,
therefore, is an estimate of the demand for additional transisthmian facilities. Without
allowing for the effects of a change in tolls or toll structure on total demand, the product of
estimated excess tonnage demand and various toll rates is a measure of the revenue which
could marginally be attributed to the investment in additional canal facilities.
From an economic viewpoint, the demand for canal services is a function of the price
charged for those services. Tolls for use of the existing canal have not been materially
changed since the canal was opened, so that, as a result of inflation in world prices, real tolls
have actually declined. It may be suggested that adjustments in toll rates may provide a
means for assuring the most economical use of canal facilities.
The Shipping Study points out that the cost of alternative means of placing a
commodity in the hands of the final buyer provides an upper limit on tolls that could be
charged for use of the canal. In many cases, the most likely alternative to shipments through
a transisthmian canal would be the use of larger ships which can economically use other
routes. In fact, the trend toward the development and use of supership bulkers and tankers
is well established. This trend can be interpreted as suggesting a decline in the economic
value of a transisthmian canal as a result of advances in technology. In this connection, at
toll levels lower than the existing Panama Canal tolls the Shipping Study indicates that a
canal that could transit ships of 200,000 and 250,000 DWT could compete with alternative
routing for larger ships.
Focusing only on revenue producing benefits and dollar cost outlays, the approach
prescribed for evaluating Federal public works projects? would require that the revenue
projections for each of the canal options be based on a toll structure and related charges
which would maximize the net benefits from canal operations. It should be emphasized,
however, that this analytical requirement would not prejudice decisions bearing on the
distribution of potential financial and economic benefits among the United States, the host
country, and third countries. However, it can greatly facilitate weighing the relative costs
and benefits of the alternatives open to the United States, focus attention on the merits of
the policy of subsidizing canal traffic, and assist in reconciling policies concerning the canal
with other Federal policies.
Scale of Development
From an economic viewpoint the objective of any undertaking is to maximize the net
present value—excess of benefits over burdens on a present value basis—of an investment.
For comparisons of the relative economic efficiency of two equal investments the ratio of
benefits to burdens, both in terms of present value, should be used. Net present value is
maximized when a development is extended to the point at which the benefits added by the
last increment of scale are equal to the burdens involved in adding that increment of scale.
This maximizing approach is recognized and prescribed for project planning and formulation
for Federal water resources projects by Executive Branch agencies.* In the economic
2 Thid.
3 Tid.
III-25
evaluation of the canal options in this Study, benefits equate to revenues and burdens to
construction, operating and other identifiable costs.
From an economic viewpoint the sea-level and other canal investment alternatives
constitute an incremental addition to the existing transisthmian facilities. From this
viewpoint, therefore, only those revenues associated with the additional traffic exceeding
the capacity of the existing canal are relevant for evaluating an investment decision. Figures
III-3 and III-4 illustrate the tonnage demands estimated by the Shipping Study Group (the
“potential†and “low†projections, respectively), the estimated capacity of the present
Panama Canal, and the demand in excess of the capacity of the present canal. The product
of this excess demand and various toll rates provides the incremental revenues used in the
economic evaluation.
To maximize the net present value of any new canal investment, the project should be
extended to the point at which the present value of the incremental revenues just equals the
present value cost of providing the incremental capacity. In this connection, the Shipping
and Engineering Studies suggest that there may be an engineering scale problem. The
capacity of the existing lock canal is limited in both the number of annual transits and the
maximum ship size which can be accommodated. The present canal, improved as
recommended in the Kearney Report, would provide capacity for 26,800 annual transits. A
sea-level canal on Route 10 would provide capacity for 38,000 annual transits—an
incremental capacity of 11,200 transits—under currently known safe ship operating methods
in restricted channels. In terms of maximum ship size, the present canal with its maximum
ship capacity of 65,000 DWT is of sufficient dimensions to accommodate about 90 percent
of the ships in the world fleet in the year 2000 and about 80 percent in the year 2040. A
sea-level canal on Route 10 would be able to accommodate ships up to 150,000 DWT under
all conditions and ships of 250,000 DWT under favorable conditions. The Shipping Study
indicates that the added costs of providing channels large enough to handle superships might
not be recoverable from tolls on such ships in view of the economical alternative routes
available to these ships.
The requirement to relate the incremental costs of the canal options—to include varying
channel sizes—and the incremental projected revenues to be realized from each option was
recognized at an early date in the sea-level canal investigation. However, because of the
uncertainties inherent in the very long range forecast of the Shipping Study and the
ageregative forecasting methodology employed, this analysis was not carried forward.
Discount Rates
The purpose of discounting is to provide a common basis for comparing alternative uses
of resources where the time patterns of benefits and costs are different and one alternative is
not clearly superior in every respect to all other uses of resources. Assuming two alternatives
involving the same capital investment are technically feasible, that with the larger present
value is clearly relatively more desirable from an economic viewpoint. Since relative
evaluations may be changed by the use of one discount rate rather than another, however,
the choice of a proper discount rate is extremely important.
In addition to its use in comparing time streams of costs and benefits, a discount rate is
also needed to compare financial flows. For this purpose, if an agency is to be able to meet
Il-26
Cargo Tons (Millions)
800
700
600
Total canal demand
500
400
300
200
400
300
Demand beyond
200 capacity of existing canal
100
1990 2000 2010 2020 2030 2040
Year
Notes:
1. Canal demand is potential tonnage forecast.
2. Existing canal capacity based on 25% freighter cargo mix, 65,000 DWT
maximum ship size, and 26,800 annual transits.
CANAL DEMAND AND EXISTING CAPACITY
POTENTIAL TONNAGE PROJECTION
FIGURE II1-3
III-27
Cargo Tons (Millions)
800
700
600
500
400
300
200
400
300
200
100
Total canal demand
BAGDUOLC DUSos
e
°
eee wwieieeere.e 21°
wraieeee= ee eee
\—— Existing canal capacity
Demand beyond
capacity of existing canal
1990 2000 2010 2020 2030 2040
Year
Notes:
1. Canal demand is low tonnage forecast.
2. Existing canal capacity based on 46% freighter cargo mix, 65,000 DWT
maximum ship size, and 26,800 annual transits.
CANAL DEMAND AND EXISTING CAPACITY
LOW TONNAGE PROJECTION
FIGURE II1-4
III-28
its debt service charges, the appropriate discount rate is at least as high as—and possibly
higher than to provide a margin against uncertainties—the agency’s cost of reimbursable
capital. For a Federal investment, therefore, an appropriate discount rate should be at least
the current cost of money to the United States, i.e., current market yields on outstanding
Treasury obligations with maturities comparable to the period of investment.
While the Treasury does not enter the market to borrow a specific amount for a specific
period to finance an investment of an equal amount for the same period, it is, in general,
compelled to have a comparably greater amount of debt outstanding over the period, and
the most appropriate estimate of the cost to the Government would appear to be the
current market cost of borrowing for comparable maturities. The market yield formula,
moreover, provides a current measure of the minimum cost of money in the economy, since
Treasury borrowing costs are lower than private borrowing costs, and thus serves as a
minimum measure of the opportunity cost of public or private investment.
Any Government project uses economic resources. In the absence of Government
investment, these resources would be available to the private sector. The opportunity to
consume or invest and earn a rate of return for a different use by the private sector is
foregone as a result of the Government investment and constitutes the opportunity cost of
the Government investment. Thus, use of a discount rate lower than the opportunity cost of
capital in the private sector can lead to a misallocation of resources from the private sector
to the public sector and from a higher return use to a lower return use within the public
sector.
For these reasons, the Subcommittee on Economy in Government of the Joint Economic
Committee concluded that the optimum allocation of resources requires the use of
economically relevant discount rates in the evaluation of public investments and proposed
the opportunity cost of displaced private spending as a correct conceptual basis for the
Government discount rate.* Office of Management and Budget Circular No. A-94 prescribes
use of a discount rate related to current yields on Government securities and a higher rate
reflecting opportunities foregone in the private sector for evaluation of all projects with
costs or benefits extending over three or more years.
Some analysts believe that the principle that the discount rate used to evaluate
Government projects should reflect opportunities foregone across the private economy as a
whole must be modified for the analysis of Government projects which would displace
private investments. In the latter case, these analysts suggest that the appropriate discount
rate is the private rate of return on investment in the particular industry affected. Even with
this qualification, however, most analysts would agree that the private rate of return on an
equity investment must be at least approximately twice the current market yield on
outstanding Treasury securities, since, in order to attract equity capital from private
investors, the industry must be able, after payment of the corporate income tax, to offer
investors a return not less than the return obtainable without risk on Treasury secuities.°
4 “The Planning-Programming-Budgeting System: Progress and Potentials’, December 1967; and “Economic Analysis of
Public Investment Decisions: Interest Rate Policy and Discounting Analysis’, 1968.
F See, for example, William J. Baumol, “On the Discount Rate for Public Projects’, in Joint Economic Committee, The
Analysis and Evaluation of Public Expenditures: The PPB System, A Compendium of Papers Submitted to the
Subcommittee on Economy in Government (91st Congress, 1st Session).
IlI-29
Since the Federal Government would assume some equity type risks in supporting
directly or indirectly an investment in new canal facilities, the expected overall rate of
return on the investment should be sufficiently above the cost of Treasury financing to
afford equitable compensation for the assumption of that risk. Consequently, in the
economic evaluation the Finance Study Group has analyzed the various canal options at
discount rates of 6, 9, and 12 percent. Rates in the lower end of this range are in the area of
market yields on U.S. Government securities in recent years. Rates in the upper end of the
range would more nearly reflect the opportunity cost of capital in the private sector.
Economic Evaluation
Based on incremental benefits (revenues), neither the Route 10 nor Route 14S sea-level
canal alternatives, nor the addition of a third lane of locks to the existing lock canal, Route
15, is commercially feasible if identified benefits are required to cover the whole of
investment and operating costs, unless construction is substantially delayed and financing
costs are below current Treasury financing costs. If a sufficient part of the investment cost is
chargeable against foreign policy, defense, and other noncommercial benefits, however,
construction and operation of a sea-level canal may still be in the national interest.
Conversely, the present value of the deficit resulting from the economic evaluation
provides a measure of the cost to the Nation of obtaining the foreign policy, defense, and
other benefits that may be attributed to the project.
Route 10
Computations summarized in Figure III-5 indicate the fraction of construction costs
that could be recovered through the additional revenues and cost savings attributable to a
Route 10 canal. As indicated in Table III-1, the net present value cost of opening Route 10
in 1990 would be $720 million to $1 billion depending upon the interest rate used in the
evaluation and upon whether the potential tonnage or low tonnage forecast were to
materialize. The corresponding level annual revenue deficiency during each year of the 60
year period of operation would range from $150 million to $400 million.
The analyses summarized in Figure III-5 and Table III-1 assume that as experience with
operating ships in restricted waterways is developed, the Route 10 channel would prove to
be sufficient to accommodate the 39,300 annual transits which would be necesary in the
year 2040 to carry the “potential†tonnage projection with the 25 percent freighter cargo
ship mix. (The “low†tonnage projection would require 31,500 annual transits in the year
2040). If improved ship operation technology is not developed so that the maximum transit
capacity of Route 10 is limited to 38,000 annual transits, a level which would be reached in
the year 2025 with the “potential†tonnage/25 percent freighter cargo mix projection, the
net revenues of the Route 10 option would be reduced (net deficit increased, net surplus
reduced) by the amounts shown in Table III-2. Table III-2 also indicates that the increased
net revenues attributable to the increased traffic which could be accommodated if a by-pass
were constructed would not be sufficient to recover the construction cost of the by-pass
project.
I1I-30
6% Discount Rate 9% Discount Rate
Potential Tons
1990 2000 2010 2020 1990 2000 2010 2020
NS ee ee SS
Source: Table III-1.
Opening Dates
NET REVENUE AS PERCENTAGE OF CONSTRUCTION COST
Present Value Basis — Route 10
FIGURE III-5
IlI-31
TABLE III-1
ROUTE 10
Net Revenue as a Percentage of Construction Cost,
and Net Worth by Opening Date. Present Value in 1970.
(Dollars in millions)
Shipping Study Tonnage Forecast
Opening Date Potential Tons Low Tons
and Revenue Net Average Revenue Average
Discount Rate as % of Worth Annual as % of Annual
Cost Deficiency Cost Deficiency
21%
11
27%
14
Notes:
‘Existing Panama Canal toll structure and rates.
2No royalty.
3Net revenue equals gross revenue attributable to tonnage in excess of the capacity of the existing canal plus operating cost
savings resulting from closing the existing canal less cost of operating the Route 10 canal.
Average annual deficiency is the level annual revenue shortfall over the 60 year period of operation.
Route 14S
A Route 14S sea-level canal would involve a larger commercial deficit because of higher
construction costs and a longer construction period. Thus, the cost on a present value basis
of opening Route 14S in 1990 would range from about $960 million to $1.26 billion,
depending on the interest rate and tonnage. The 60 year level annual revenue deficiency
would be $200 million to $515 million. (See Figure III-6, and Table III-3).
No analysis of the effects of increased transiting capacity on Route 14S was undertaken
because the minimum Route 14S capacity of 39,000 annual transits would be sufficient to
accommodate the “‘potentialâ€â€™ tonnage/25 percent freighter cargo mix until about the year
III-32
TABLE III-2
Route 10 — By-Pass Project
Net Revenues, and Net Revenues
as a Percentage of Construction Cost,
Present Value in 1970.
(Dollars in millions)
Opening Date Net Revenues
Net
and ae as % of
Discount Rate Cost
1990
6% $6 30%
9% 1 19
2000
6% $7 37%
9% 1 21
2010
6% $8 40%
9% 1 23
2020
6% $8 43%
9%
Notes:
1 Opening date is date the Route 10 channel would be opened. The by-pass would be opened in each case in 2025. The 60
year analysis period begins with opening date of Route 10.
Existing Panama Canal toll structure and rates.
3No royalty.
* Potential tonnage, 25 percent freighter cargo mix projection.
2035, and the incremental revenues to be gained from construction of increased transiting
capacity would be lower than the incremental revenues attributable to a Route 10 by-pass.
Replacement of the Existing Lock Canal Facilities
The sea-level canal options have been examined on a comparative basis with continued
operation of the existing lock canal. A consideration in the evaluation of alternatives is the
possibility that the locks of the existing canal may require major replacements at some
indeterminate time in the future. The foregoing analyses have not included provision for this
contingency. If the existing lock canal should need major replacements during the period of
IlI-33
9% Discount Rate
6% Discount Rate
%
100
Potential Tons
80
60
40
Low Tons
20
1990 2000 2010 2020 1990 2000 2010 2020
Oy Ss —§_ SS
Source: Table III-3.
NET REVENUE AS PERCENTAGE OF CONSTRUCTION COST
Present Value Basis — Route 14S
FIGURE III-6
[I-34
TABLE III-3
Route 14S
Net Revenue as a Percentage of Construction Cost,
and Net Worth by Opening Date. Present Value in 1970.
(Dollars in millions)
Shipping Study Tonnage Forecast
Potential Tons Low Tons
Revenue Average Revenue Average
as % of et Annual as % of
Deficiency Cost
Opening Date
and
Discount Rate Cost Worth
Notes:
LExisting Panama Canal toll structure and rates.
2No royalty.
Net revenue equals gross revenue attributable to tonnage in excess of the capacity of the existing canal plus cost savings
resulting from closing the existing canal less cost of operating the Route 14S canal.
4 average annual deficiency is the level annual revenue shortfall over the 60 year period of operation.
analysis, the present value net worth of the existing canal (See Figure III-2) would be
reduced by the present value of the replacement costs, and the present value net worth of
the sea-level canal options (See Tables III-1 and III-3) would be correspondingly increased.
As indicated in Chapter II, a cost of $800 million has been used for evaluation purposes.
Table III-4 contains the present values in 1970 of the replacement expenditures,
assuming the replacement is begun in the year 2000, 2010, or 2020. The present value of
the replacement cost represents the reduction in the net worth of the existing canal, if major
replacement is proved to be necessary, and the corresponding increase in the present value
IlI-35
TABLE I11-4
Cost of Replacement of Existing
Lock Canal. Present Value
in 1970. Millions of Dollars.
Year Replacement Discount Rate
Begins 6% 9%
net worth of the sea-level canal options. For example, if it is determined that the existing
canal will require major replacement beginning in the year 2010, the net commercial deficit
on a present value basis indicated in Tables III-1 and III-3 of the sea-level canal options
would be reduced by $19 million if a 9 percent discount rate is used.
Route 15
The Route 15 option would require continued operation of the existing lock facilities:
thus, there would be no operating cost savings. Taking into account the additional revenues
from the added capacity provided, the cost on a present value basis of opening the third lane
of locks in 1990 would range from about $370 million to $600 million, depending on the
interest rate and tonnage. (See Figure III-7, and Table III-5). This option, like continued
operation of the present canal, could involve a need to replace the existing lock canal
facilities.
Payout Analysis
In addition to the foregoing economic evaluation, which reflects the overall net
financial return to the United States, the Finance Study Group also conducted a series of
payout analyses of the canal options. This approach is more restricted than the economic
evaluation since it is directed to determining the circumstances under which revenues
credited to an interoceanic canal operating agency would be sufficient to pay off costs
charged to the agency. The payout analysis illustrates the balance between revenues and
expenditures as it might appear on the books of an interoceanic canal operating agency over
the period of analysis.
The basic feature of this “bookkeeping†approach is the dedication of all revenues from
interoceanic canal transits to the payment of operation and maintenance costs, royalties,
and the amortization of debt attributed to existing and new facilities. This differs from the
previously described economic evaluation in which only incremental revenues were credited
to each canal option. The primary objective of the payout analysis is to illustrate
combinations of costs, interest rates, tolls, and royalty payments charged to the operating
agency which would permit paying off the debt of the operating agency after the new canal
has been in operation for 60 years. The variables considered included reimbursable
ILI-36
6% Discount Rate 9% Discount Rate
% %
100 100
80 80
Potential
Tons
60 60
40
40
20 20
1990 2000 2010 2020 1990 2000 2010 2020
—————Essss Opening Dates ——__—__’
Source: Table I11-5.
NET REVENUE AS PERCENTAGE OF CONSTRUCTION COST
Present Value Basis — Route 15
FIGURE III-7
IlI-37
TABLE III-5
ROUTE 15
Net Revenue as a Percentage of Construction Cost,
and Net Worth by Opening Date. Present Value in 1970.
(Dollars in millions)
Shipping Study Tonnage Forecast
Opening Date Potential Tons Low Tons
and Revenue Average Revenue Average
Discount Rate as % of Net Annual as % of Net Annual
Cost Worth _ Deficiency Cost Worth Deficiency
Notes:
LExisting Panama Canal toll structure and rates.
No royalty.
3 Net revenue equals gross revenue attributable to tonnage in excess of the capacity of the existing canal less the cost of
operating the third lane of locks on Route 15.
4No provision for possible replacement of existing locks.
5 Average annual deficiency is the level annual revenue shortfall over the 60 year period of operation.
construction costs, host-country payments, the “potential†and “low†tonnage projections,
the date for opening a sea-level canal (between 1990 and 2010), and toll rates between
$0.60 and $1.30 per cargo ton with adjustments at various dates. Unless otherwise specified,
the toll rate associated with all analyses comprising the payout analysis assumes an average
revenue of $0.884 per cargo ton regardless of cargo composition until the structure is
changed to produce different levels of revenue.
Variations of the general method were used to explore the effect of the following
factors on toll rates necessary to permit payout after 60 years of operation:
IlI-38
1. The various canal options under consideration.
2. Separation of the costs and revenues of the sea-level canal options from those of
the Panama Canal so that net revenues of the latter would not be available for
defraying construction costs of a sea-level canal until the sea-level canal is placed in
operation.
3. Combination of the costs and revenues of the canal options with those of the
Panama Canal, making net revenues of the latter available for defraying
construction costs.
4. Variation between the “potential†and the “low†tonnage projections of the
Shipping Study.
5. Variation of the date when the canal option is placed in operation.
6. Variation of the date when the tolls are changed from the assumed rate of $0.884
- per cargo ton to the rate required to liquidate all costs of both the old canal and
the new option.
7. Variations in reimbursable cost.
8. Variations in the interest rate charged on reimbursable capital.
9. Variations in project transit capacity.
Detailed analyses for Routes 10, 14S, and 15 are contained in Appendix 1, Payout
Analysis. The remainder of this Section discusses the payout analyses pertaining to Route
10, and concludes with a summary comparing the canal options under consideration in
terms of toll rates which would be necessary in order for the books of the operating agency
to show payout after 60 years of operation of the new facilities under certain assumptions
as to costs and interest rates.
Route 10 — General
The financial circumstances most favorable for a sea-level canal on Route 10 have been
taken as the lowest toll rate which would permit liquidation of all debts after 60 years of
operation. These circumstances prevail when the costs and revenues of the existing canal are
combined with the costs and revenues of the new canal to permit defraying new
construction costs with net revenues from operation of the Panama Canal.
Generally, in order that Route 10 be self-liquidating after 60 years of operation, increases in
toll level over that now prevailing at the Panama Canal would be required. If tolls are
increased earlier rather than later, more revenue would be available for paying the debts
incurred in constructing a new facility. Also, the earlier toll rates are increased, the smaller
the required increase in tolls, or the higher the return that could be realized on the
investment. Two dates for an increase in tolls have been examined, i.e., the date on which
construction on Route 10 is started and the date on which the new facility is placed in
operation. The earlier date is more favorable and is discussed further in this Chapter.
Net Panama Canal revenues available for paying for the construction of a new facility
are dependent on the volume of traffic—the greater the volume, the greater the net revenue
available. Since transisthmian canal traffic is projected to increase continuously, the later
the new facility is constructed, the lower the required toll per cargo ton, or the greater the
rate of return on the investment. Figure III-8 illustrates combinations of toll rates which
would permit payout after 60 years of operation and opening dates for a sea-level canal on
Route 10 at several interest rate levels, assuming toll rates are increased when construction is
III-39
Toll for payout after 60 years
of operation, $ per cargo ton
Potential tonnage
Projection
1990 2000 2010
Sea-level canal opening date
1.00
Toll for payout after 60 years
of operation, $ per cargo ton
0.80
Low tonnage
Projection
0.60
1990 2000 2010
Sea-level canal opening date
NOTES:
1. Canal financing assumed an extension of that of the Panama
Canal with a 1970 debt of $317 million.
2. Toll of $0.884 per cargo ton assumed until canal construction
is started.
3. Panama Canal assumed on standby for ten years, and then in
mothballs.
4. Route 10 cost is $2.88 billion.
5. Royalty reaches $0.22 in 1976.
ROUTE 10 TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE III-8
I1I-40
started. Combinations for both the “potential†and the “low†tonnage projections are
presented.
Cash Flows
Figures III-9 and III-10 illustrate the year-by-year changes in revenues, costs and debt
which would prevail, and the toll rates which would be required to permit payout after 60
years of operation, if Route 10 were constructed under a particular set of assumptions. The
assumptions and the reasons for selecting them are as follows:
1. Costs and revenues are combined with those of the Panama Canal to permit using
net revenues of the latter to defray construction costs.
2. Toll rates are increased to $1.00 per cargo ton at the start of Route 10
construction to maximize net revenues which can be used to defray construction
costs.
3. Sea-level canal commences operation in 2000 to permit use of the Panama Canal
until its transit capacity is reached, and thus to maximize net revenues which can
be used to defray construction costs.
4. Six percent interest is charged, somewhat below current Treasury borrowing costs
but within the range of these costs in recent years.
5. Toll rates are changed after 10 years of operating experience (year 2010) to the
rate necessary to achieve payout after 60 years of operation.
Figure III-9 shows that an average toll rate of $1.02 per cargo ton would be necessary
for the period after 2010 to permit payout after 60 years of operation under the
assumptions described above, if the low tonnage projection were to materialize. Figure III-9
also shows that the accumulated debt would continue to increase some 25 years after start
of operation.
Figure III-10 shows what might happen under the same assumptions, but with the
“potential†tonnage projection. The figure illustrates that toll rates could be reduced to
$0.43 per cargo ton for the period after 2010 and still achieve payout after 60 years of
operation. The figure also shows that liquidation of debts would begin immediately upon
completion of the sea-level canal. Figure III-11 illustrates the implications for self-
liquidating tolls if early completion (1990) of the sea-level canal were deemed necessary. The
figure shows that a toll rate of $0.96 per cargo ton would be required from the start of
construction throughout the period of operation to permit payout 60 years after opening
even if the “potential†tonnage projection materialized. The figure also shows that the canal
debt would continue to increase for some 30 years after start of operation, to a peak more
than $2 billion greater than the debt when the canal opened.
Sensitivity of Self-liquidating Tolls to Reimbursable Costs
The costs which must be reimbursed from toll revenues might vary from the $2.88
billion presently estimated construction cost of a sea-level canal on Route 10 for a number
of reasons. These include the following:
1. The cost of the canal might change during the design stage because of the
additional foundation information which would become available from design stage
explorations.
IIl-41
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll from 1985 to 2010 Toll after 2010, $1.02
Toll to $1.00 per cargo ton per cargo ton
1985,
$0.884 per
cargo ton—>
Annual operation and maintenance
om ow = == =
—_
Annual royalty
—
Annual net available
for paying debt
Annual revenues
Major
replacements
oy 1
Ny
\
\
\
= Accumulated debt
.
Ses
we
we
.
patie °
Seeeseese eet ®
1970 2000 2020 2040 2060
Year
NOTES:
1. Construction cost is $2.88 billion.
2. Interest is 6%.
3. Royalty reaches $0.22 per cargo ton in 1976.
4. New canal opens in 2000 for payout in 2060.
5. Low tonnage projection and 46% mix used.
6. Canal financing assumed an extension of that
of Panama Canal with a 1970 debt of $317 million.
7. Panama Canal kept on a standby for ten years and
then in mothballs.
ROUTE 10 CASH FLOW ANALYSIS
(Low Tonnage, 46% Mix)
FIGURE III-9
IlI-42
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll from 1986 to 2010 Toll after 2010, $0.43
$1.00 per cargo ton per cargo ton
Toll to 1985,
$0.884 per
Annual operation and maintenance
Annual revenue
Major
replacements
Annual net available
for paying debt
Accumulated debt
Annual construction cost
8
1970 2000 2020 2040 2060
Year
NOTES:
. Construction cost is $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 2000 for payout in 2060.
. Potential tonnage projection and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal kept on standby for ten years, and then in mothballs.
NOOR WN—
ROUTE 10 CASH FLOW ANALYSIS
(Potential Tonnage, 25% Mix)
FIGURE II1-10
III-43
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1975, $0.884
per cargo ton
Toll after 1975, $0.96
pened. coo. ..—<—<—
Annual operation and maintenance
Annual royalty
Major replacements
Annual revenue —~,
Annual net available
for paying debt
Annual construction cost
.
ee
. .
Se eeee®
1970 2000 2020 2040 2060
Year
NOTES:
. Construction cost $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 1990 for payout in 2050.
. Potential tonnage projection and 25% mix used.
- Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal kept on standby for ten years and then in mothballs.
NOoPRWNM—
ROUTE 10 CASH FLOW ANALYSIS
(Potential Tonnage, 25% Mix)
FIGURE III-11
Ill-44
2. Part of the construction cost might be charged against presently unevaluated
benefits, thus reducing the amount to be reimbursed from tolls revenues.
3. Part of the construction cost might be determined to constitute a subsidy, reducing
the cost to be reimbursed from tolls revenues.
4. The channel size might be changed.
5. Treatment of present Canal investment might be altered.
An analysis was undertaken to determine the effect of variations in reimbursable costs
on toll rates necessary to achieve payout after 60 years of operation at several interest rate
levels. The results of the analysis are shown in Figure III-12. The computations are based on
the “low†tonnage projection and the assumption that the sea-level canal would be opened
for traffic in 2000.
Figure III-12 can be used in the following manner. Route 10, completed in 2000 at a
cost of $2.88 billion, would be self-liquidating after 60 years of operation at 6% interest rate
if a toll rate of $1.02 per cargo ton were charged from the beginning of construction and
maintained over the 60 year period of operation. (The line identified as 6% passes through
$2.88 billion as measured on the horizontal scale at a toll rate of $1.02 per cargo ton, as
measured on the vertical scale.) If reimbursable costs were determined to be one-half billion
dollars less for some reason, the corresponding toll rate would be $0.95 per cargo ton. (The
line identified as 6% passes through $2.38 billion as measured on the horizontal scale at a
toll rate of $0.95 per cargo ton, as measured on the vertical scale.)
Figure III-12 may also be used to approximate the effect of royalty rates differing
from the $0.22 per cargo ton used in the analyses. For example, tolls of $0.83 per cargo
ton, out of which royalties of $0.17 per cargo ton are paid, would have the same financial
effect as tolls of $0.88 per cargo ton as read on the figure from which royalties of $0.22 per
cargo ton are assumed to be paid.
Figure III-13 furnishes similar information for the “‘potentialâ€â€™ tonnage projection.
Recoverable Construction Costs, Route 10, at Panama Canal Toll Levels
Payout analyses can be used to determine the approximate portion of Route 10
construction costs which could be recovered at various interest rates and toll levels. The
amounts which could be recovered using current Panama Canal toll rates are examined
below on the basis that the current tolls have not been changed materially since the Canal
was opened, and may also be resistant to future change. The values in Table III-6 are taken
from Figures III-12 and III-13.
Sensitivity of Tolls to Transit Capacity, Route 10
The Engineering Feasibility Study indicates that the capacity of Route 10 is 38,000
transits a year unless operational methods not now considered safe can be adopted after
experience has been gained in operating the sea-level canal. The 38,000 transit capacity
would be exceeded in about year 2025 if the “‘potential†tonnage forecast and 25% freighter
cargo mix were realized. The effect on self-liquidating tolls is shown in Table III-7 for
various assumed peak transit capacities for Route 10.
IhI-45
TABLE III-6
ROUTE 10
Recoverable Construction Costs
at Current Panama Canal Toll Rates
(Dollars in Billions)
Construction Cost
Interest Rate Recoverable : Unrecoverable
“Potential’’ tonnage projection’
6%
7%
7.6%
“Low†tonnage projection?
6%
6.7%
1 Based ona toll rate of $0.777 per cargo ton on the vertical scale of Figure ||1-13; corresponds to the 25% freighter cargo
mix.
21 ower limit of reimbursable costs examined in the sensitivity studies.
3 Based on a toll rate of $0.884 per cargo ton on the vertical scale of Figure |||-12; corresponds to the 46% freighter cargo
mix.
Table I11-7
Self-liquidating Tolls for Route 10
as Affected by Transit Capactiy
Capacity, : Self-liquidating
transits per year : toll per cargo ton '
39,300 and above
38,000
36,000
34,000
1 Construction started in 1975, operation in 1990; potential tonnage; royalties $0.22 per cargo ton; 6% interest rate;
financing an extension of Panama Canal financing; toll of $0.884 until 1975; project cost $2.88 billion.
IlI-46
Toll, $ per cargo ton
1.20
1.00
0.80
0.60
1.6 2.0 2.4 2.8 3.2
Project cost, $ billions
NOTES:
1. Route 10 construction schedule is of that of Panama Canal with a 1970 debt
assumed. of $317 million.
2. Royalty rate is $0.22 per cargo ton. 7. Toll of $0.884 per cargo ton assumed
3. Sea-level canal is opened in 2000. until sea-level canal construction is
4. Payout is in 2060. started.
5. Low tonnage and 46% mix are assumed. 8. Panama Canal assumed on standby for
6. Canal financing assumed an extension 10 years and then in mothballs.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE III-12
III-47
1.20
1.00
Toll, $ per cargo ton
0.80
0.60
1.6 2.0 2.4 2.8 3.2
Project cost, $ billions
NOTES:
. Route 10 construction schedule is assumed.
. Royalty rate is $0.22 per cargo ton.
. Sea-level canal is opened in 2000.
. Payout is in 2060.
. Potential tonnage and 25% mix are assumed.
. Canal financing assumed an extension of that of
Panama Canal with a 1970 debt of $317 million.
. Toll of $0.884 per cargo ton assumed until sea-level canal
construction is started.
8. Panama Canal assumed on standby for ten years and then in mothballs.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
Onhwn—
~N
FIGURE II1-13
Ill-48
If sea-level canal operating experience shows that additional transit capacity cannot be
secured any other way, a by-pass could be provided at a cost of $460 million. For the
“potential†tonnage 25 percent freighter cargo mix projection, the by-pass would be ready
-or operation in 2025 after four years of construction. Figure III-14 illustrates the changes
in cash flow if (a) toll levels were increased in 1975 to maintain payout date even if the
by-pass became necessary, and (b) toll levels were maintained at former level and payout
date were delayed if the by-pass became necessary.
Ranking of Canal Options
One way of ranking the canal options within the context of the “‘payout analysis†is by
the average equivalent tolls per cargo ton which would have to be charged to liquidate the
costs charged against that option after 60 years of operation. This ranking is shown in Table
III-8 which assumes a 6% interest rate, start of operation of each new construction option in
2000, and a change of toll rate from the assumed rate of $0.884 per cargo ton to the
required level at the start of construction of the option. The required tolls are given for both
the “low†and the “potential†tonnage projections. The tolls listed with the “low†tonnage
projection are considered more relevant in this analysis. A similar analysis was not done in
connection with the “economic evaluation†since that analysis indicates that none of the
sea-level canal options, nor the third lane of locks, provides a net commercial return
sufficient to cover costs including amortization of the capital investment at a rate of interest
approaching current Federal Government borrowing costs.
TABLE II1-8
Canal Options Ranked by Self-Liquidating Tolls
Required Tolls per Cargo Ton!
Canal Option “Low†tonnage “Potentialâ€
projection projection
Present canal improved as recommended
by Kearney
Present canal improved as recommended
by Kearney and existing locks re-
placed in 2000
Route 15
Route 10
Route 14S
Route 15 with existing locks replaced
in 2000
1 Royalties reach $0.22 per cargo ton in 1976, tolls change from $0.884 per cargo ton at the start of construction of the
canal option, canal option in service in 2000, financing of the canal option assumed an extension of that of Panama
Canal, and all debts liquidated with interest at 6% after 60 years of operation.
Required tolls after liquidating the cost of Kearney improvements and current debt on which Panama Canal Company
pays interest and including cost of Canal Zone Government.
Tug charges of $0.02 per cargo ton added to values derived from analyses to make them comparable to those for sea-level
canal options.
4 Cost of Canal Zone Government included.
III-49
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1975, $0.884
per cargo ton
Toll after 1975 as
indicated below —~—»
Annual operation and maintenance
Major replacements
Annual revenue
Annual net available
for paying debt
Annual construction —**t
cost, bypass
|
|
!
I
\ pallet Annual construction cost,
ean
a sea-level canal
.
Accumulated debt without ——>»"
bypass, toll $0.957 per cargo ton
Accumulated debt with
bypass, toll $0.963 per cargo ton
Accumulated debt with
bypass, toll $0.957 per cargo ton
1970 2000 2020 2040 2060
Year
NOTES:
1. Construction cost $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 1990 for payout in 2050.
. Potential tonnage projection and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal kept on standby for ten years and then in mothballs.
. Cost of bypass $460 million.
AnNOnAWN
ROUTE 10 CASH FLOW ANALYSIS
EFFECTS OF A BYPASS
FIGURE II1-14
I-50
Chapter IV
METHODS OF FINANCING
General
The lack of financial attraction as a purely commercial enterprise need not necessarily
preclude construction of a sea-level canal. Many Federal capital projects do not generate
revenues adequate to cover their costs and, therefore, would not meet the test of
“economic†feasibility applied to the canal options in Chapter III. Rather, these projects
have been justified by identifiable economic benefits, including benefits which produce no
revenues for the project. As mentioned earlier, such benefits have not been identified with
quantified values for inclusion in the economic evaluation of this Study. However,
consideration could be given, even if on a judgmental basis, to charging a portion of the cost
of new canal facilities against defense, foreign policy, and other objectives and benefits, thus
reducing the capital investment reimbursable from commercial revenues.
Similarly, absence of overall economic feasibility need not bar private or foreign
government participation in the project. However, questions of eventual ownership and
control could affect the form of such participation, the amount of necessary subsidies, and
the manner in which such subsidies were provided. Arrangements for financing, ownership,
and control would, of course, have to be carefully examined from the point of view of
protecting the financial interest of the United States, as well as its defense and foreign
policy interests.
Manner of Providing Subsidies
To tne extent necessary, Federal subsidies could be provided either as contributions
during the construction period or annually over the economic life or amortization period of
the project. To the extent that subsidies are justified on defense, foreign policy, shipping, or
other grounds, proper accounting would suggest that appropriations for the subsidies be
sought by and be reflected in the budgets of the Federal agencies with primary
responsibilities for these areas.
Foreign Government Participation
It is not clear to what extent participation by foreign governments in the financing and
control of the project would be consistent with U.S. defense and foreign policy objectives.
Participation by foreign governments which are recipients of U.S. foreign aid would also
raise a question as to whether the effect of such participation would not ultimately be to
increase the amount of U.S. foreign aid otherwise required, resulting, in effect, in U.S.
Government financing but loss of control over the operations. Purely economic and
financial considerations, however, would not appear to preclude foreign government
participation.
IfI-51
Private Participation
a. By Users. Private canal users could be required to buy stock in a canal corporation.
The stock purchase requirement could be related to the number of transits, with the
purchase price incorporated as a surcharge on the toll.
b. By Others. Stock in the canal corporation could be offered for sale to investors
generally, including private users and foreign governments. If this approach were taken,
however, it would appear necessary to increase the direct Federal subsidy in order to
provide more adequate debt service coverage, offer U.S. Government guarantees, or hold out
the prospect of attractive returns on equity. Alternatively, this approach might require a
higher tolls structure.
Principal Alternatives
The considerable uncertainty regarding the economic and financial feasibility of the
project as evidenced by the wide range of assumptions discussed in Chapter III, the
questions raised above with regard to the consistency of private or foreign participation with
the foreign policy and defense objectives, and the increased Federal subsidies which would
be required in order to attract private investors may suggest that control and operation of
the canal should be vested in an independent Federal agency. The Federal agency could be
financed either directly by the Federal Government or by the issuance of its own
obligations, with or without a guarantee by the Federal Government.
Direct Federal Financing
Direct Federal financing could be accomplished by interest-bearing appropriations to
the canal agency or by authorizing the canal agency to borrow from the Treasury within
limits established in appropriation Acts. Under either form of direct Federal financing, the
enabling legislation should provide broad authority for the establishment of tolls adequate
to meet the agency’s financial commitments, and this authority should not be limited to the
existing cargo carrying capacity basis.
To assure proper accounting, the enabling legislation should require that charges for the
use of the canal be set at levels calculated to cover all costs of operating and maintaining the
canal, including depreciation, payment of interest on the Federal capital, and return of the
Federal investment over an appropriate amortization period, e.g., the 60 year period used as
a basis for the economic evaluation and payout analyses in this Study. If the agency is
authorized to borrow from the Treasury, the legislation could also limit the maximum
maturity of any obligation issued to the Treasury to a period not to exceed the balance of
the period of U.S. control. Under either form of direct Federal financing, interest and
scheduled principal payments could be deferred, but any payments so deferred should
themselves bear interest.
Federally Guaranteed Financing
The acceptability of the guarantee approach is dependent upon adequate revenue
coverage of the debt service. Enabling legislation should require adequate coverage, since the
guarantee should be a means primarily for facilitating the market borrowing and for securing
a more favorable interest rate. That is, a guarantee should be looked upon as a means for
assuring the marketability of the obligations and not as a disguised means for providing
IlI-52
additional Federal subsidies of an undetermined amount. The latter would be the result if
the projected debt service coverage allowed no margin for overestimation of revenues or
underestimation of costs.
Although a Federal guarantee may ensure the marketability of the revenue bonds so
that the amount of coverage is not important from that viewpoint, some margin of coverage
is desirable to avoid frequent recourse to the guarantee. Moreover, adequate debt service
coverage will be reflected in a somewhat lower rate of interest on the market borrowings
since investors may be reluctant to rely on a guarantee as the only security for their
investment. If a situation should develop, moreover, in which frequent recourse had to be
made to the Federal guarantee, this would likely be prejudicial to continued sound financing
of the canal and could also indicate a failure to establish appropriate tolls.
For these reasons revenue after depreciation or after charges against depreciation
allowances should be, as a minimum, one and one-half times debt service charges. In some
circumstances, it may be possible to reduce the coverage requirement in the earlier years of
operation, for example, if a fairly rapid build-up to 1-1/2 times coverage should be indicated
by the financial projections. The margin could be used for financing a sinking fund bond
retirement mechanism.
A higher debt service coverage requirement has the effect of raising the net project cost,
and, therefore, would result in increasing the immediate amount of Federal subsidy needed.
The additional subsidies made necessary by the higher debt service coverage requirement, as
distinguished from the subsidy justified on defense, foreign policy, or other grounds, could
be provided in the form of direct Federal loans the repayment of which would be
subordinate to the repayment of the guaranteed obligations. In particular instances, an
unsatisfactory debt service coverage may be corrected to a limited degree by some extension
of debt amortization schedules. This could probably be accomplished at the present time
without any substantial increase in interest costs because changes in the interest rate curve
become increasingly flat in the long-maturity area. The alternatives, of course, are an increase
in the overall tolls structure, or in the amount of Federal subsidy. A relatively small increase
in subsidy could have a significant leverage effect on debt service charges.
The debt service coverage requirement also implies the desirability of a call feature on
the revenue bonds after adequate provision for a sinking fund or reserve fund. Excess
revenues could then be applied to the early retirement of outstanding debt and thus shorten
the amortization period and reduce the overall interest cost to be borne by the project.
As an additional prerequisite for Federal guarantees, it would be necessary to
obtain certain “‘self-enforcingâ€â€™ financing arrangements; specifically, the enabling legislation
should grant the canal operating entity broad authority to set tolls at levels sufficient to
cover all costs including debt service. Any subsidies deemed necessary for particular types of
canal traffic should be provided by direct appropriations for this purpose to the interested
Federal agency, e.g., Department of Defense with respect to military vessels, Department of
Commerce (Maritime Administration) with respect to other U.S. flag vessels, Department of
State with respect to foreign vessels.
It would be desirable to have funds immediately available to cover the contingent
liability assumed by the guarantees to avoid the risk of delays in meeting any liability. This
could be done through advance appropriations, or by authorizing the canal operating entity
to borrow from the Treasury in amounts sufficient to make good on the guarantee. In any
III-53
event, Federal payments with respect to a guarantee should be treated as repayable advances
to the canal operating agency, and interest should be charged in accordance with the current
market yields on direct Treasury obligations of comparable maturity. Enabling legislation
should vest in the Secretary of the Treasury authority to approve the issuance of debt
obligations by the canal agency. Such approval should extend to the amounts, interest rates,
timing, other terms, and debt service coverage, in order to provide for the coordination of
the canal agency’s borrowings with other Federal financing and to protect the financial
interests of the United States under the guarantee.
Interest Costs Under the Two Alternatives
It has always been difficult to predict movements in market interest rates even over
relatively short periods of time. Longer-run predictions—under some of the options canal
construction need not begin prior to 1990—are even more hazardous. Currently, interest
rates are at historic highs, and have risen with only minor interruptions for over a
generation.
On the demand side, a substantial backlog of unmet credit demand exists. State and
local governments alone in 1969 postponed or deferred about $3 billion of authorized debt
issues. While the amount of borrowing deferred by other borrowers has not been tabulated,
it is clear from the rate of new mortgage originations, for example, that individuals have
deferred a substantial amount of borrowing for housing purposes. To the existing backlog of
unfilled borrowings must be added potential future demands for credit. In the area of public
investment, an area in which needs are determined largely on the basis of considerations
other than economic and thus are less sensitive to interest rate movements, it is easy to
visualize a substantial demand for such debt-financed projects as environmental pollution
control facilities, public housing, education, health, and public transportation facilities. In
view of the substantial current backlog and potential future demand, barring a deep
recession which it seems clear no Administration would allow to develop, it is difficult to
foresee any significant long run reduction in the demand for credit, either relatively or
absolutely.
On the supply side, the 5 year projections in the Budget and Economic Report appear
to indicate that the Federal Government will not be a significant net saver and supplier of
funds at least in the near future. Moreover, the increased stability of the economy, in terms
of freedom from significant recession, and the expansion of income maintenance programs
may well reduce the incentive for individuals to save, and could result in less than
proportionate increases in private savings as the economy expands.
In view of the foregoing, it is difficult to anticipate any significant secular reduction in
interest rates. Under current market conditions, taking into consideration the yields on
outstanding Treasury, Federal agency, and corporate obligations, the cost of direct Federal
financing of the canal project would appear to be approximately 8 percent, although rates
in the range of 6 - 9 percent might reasonably be considered. Short-term market changes
may lead to some modification of this conclusion, but it is based largely on the secular
considerations previously described.
Federally guaranteed financing would require a higher interest rate than direct Federal
financing. Although a full Federal guarantee provides the same assurance of safety of
principal as the investor obtains in Treasury obligations, the investor must also look to the
III-54
strength of any legal assurance of timely payment, loss of liquidity because of the thinness
of the market, and other factors. Under current market conditions, a Federal agency well
established in the market could expect to borrow at a rate approximating one-half of
one percent over the Treasury borrowing rate. Moreover, experience with existing programs
indicates that investors in guaranteed issues also look to the underlying viability of the
project or program being financed. The uncertainties surrounding the viability of the canal
project, the long period from the initiation of construction to the beginning of significant
payment, and the above-mentioned marketing considerations suggest that an interest rate
approaching 9 percent would be required for Federally guaranteed financing.
It is not obvious that any advantage claimed for Federally guaranteed financing would
be sufficient to justify the higher cost of financing under this method. It is sometimes
argued that a project should be financed by issuing its own obligations in the market in
order to assure that the project meets the “test of the market.†If direct Federal subsidies
are required in any event, however, the “market test’’ argument loses some of its force.
Moreover, the higher financing costs would require greater Federal subsidies, or could result
in the need for direct Federal subsidies to otherwise marginally self-supporting canal
options.
Attempts have been made to justify the higher financing costs of agency market
borrowing in terms of additional “flexibilityâ€, usually meaning freedom from the statutory
ceiling on the public debt and from budget controls. Under current budget accounting
rules, outlays by Federal agencies from the proceeds of obligations issued in the market are
counted as Federal outlays in the budget, and it would be difficult to argue that the canal
project should be exempted from the normal budget review process. On the other hand, the
so-called ‘“‘market test’? may be the most effective mechanism for assuring that the financing
of the canal does not become a heavier burden on the general taxpayer than intended at the
time the decision is made.
III-55
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Chapter V
CONCLUSIONS
The following are the major conclusions derived from this Study:
I
De
Long-range estimates of potential revenues, construction costs, operating expenses,
and interest rates are tenuous and subject to unforeseeable changes.
If viewed as a commercial enterprise (e.g., within the context of the economic
evaluation in this Study), in which a new canal option is considered as an
incremental development to the existing transisthmian canal facilities and only
those revenues associated with traffic beyond the capacity of the existing Panama
Canal are considered in the evaluation, investment in a sea-level canal or a third
locks option cannot be justified.
If subjected to a more limited type of financial analysis (e.g., the payout analysis
contained in this Study’), in which total interoceanic revenues are dedicated to the
payment of operation and maintenance costs and amortization of the construction
debt of new transisthmian canal facilities, the costs of a sea-level canal or a third
locks option could be amortized by tolls revenues under certain conditions, even if
the “low†tonnage projection were to materialize. These include the following:
combining the financing of the sea-level canal with that of the Panama Canal,
initiation of construction no earlier than 1985, a moderate increase in toll rate for
the existing canal upon initiation of construction, and charging the canal operating
agency interest at arate below the current cost of Treasury borrowing.
Financial and other considerations indicate that responsibility for construction and
operation of a sea-level canal should be vested in an independent agency of the U.S.
Government which should be financed directly by the Government.
The payout analysis includes basic considerations for development of an outline
financial plan. However, development of a detailed financial plan for new canal
facilities must await implementing decisions reflecting such matters as treaty terms,
possible revisions in the tolls system, and financing arrangements.
III-57
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7
Appendix 1
PAYOUT ANALYSIS
Purpose
This Appendix presents the detailed results of analyses of cost and revenue data which
were undertaken in order to illustrate combinations of assumptions under which the costs of
a new interoceanic canal could be amortized after a period of 60 years of operation. The
analyses are based on assigning total interoceanic revenues to the payment of operation and
maintenance costs, royalties and the amortization of debts attributed to existing and new
facilities. Panama Canal revenues, operation and maintenance costs, improvement costs, and
the debt on which interest is paid to the United States Treasury are considered in the
analyses. This Appendix contains the detailed studies referred to under “‘Payout Analysisâ€
in Chapter III. It does not include consideration of the ““Economic Evaluationâ€â€™ described in
the same Chapter.
Method
The analyses consist essentially of synthesizing a year-by-year bookkeeping operation
extending from the start of design and construction (or earlier) and ending 60 years after
initiation of operation of the new canal facilities. All the basic information presented in
Chapter II on costs and revenues are reduced to annual values for purposes of the analyses.
Two basic statements define the bookkeeping as follows:
The debt at the end of the year equals the debt at the beginning
of the year plus the cost of capital improvement during the year,
and annual interest; less the remainder from gross revenues after
payment of royalty, operation and maintenance costs, and any
major replacement.
Annual interest during the year equals the debt at the beginning
of the year times the interest rate for the whole year, plus the
cost of capital improvement during the year times the interest
rate for one-half of the year.
Not all of the expenditures mentioned in the foregoing statements occur in every year of the
analyses.
The analyses determined the tolls after payment of royalty that would permit paying
off all debts with interest at various assumed rates after the new facilities had been in
operation for 60 years. The general method was varied as necessary to explore the effect of
the following on toll rates necessary to permit payout after 60 years of operation:
1. The various canal options under consideration.
III-A-1
2. Separation of the costs and revenues of the sea-level canal options from those of
the Panama Canal so that net revenues of the latter would not be available for
defraying construction costs of a sea-level canal until the sea-level canal is placed in
operation.
3. Combination of the costs and revenues of the canal options including Route 15 and
its locks with those of the Panama Canal, making net revenues of the latter
available for defraying construction costs.
4. Variation between the ‘potential’? and the “low†tonnage projections of the
Shipping Study.
5. Variation of the date when the canal option is placed in operation.
6. Variation of the date when the tolls are changed from the assumed rate of $0.884
to the rate required to liquidate all costs of both the existing canal and the new
canal option.
7. Variations in reimbursable cost.
8. Variations in the interest rate charged on reimbursable capital.
9. Variations in project transit capacity.
The analyses were programmed for solution by automatic data processing equipment.
This permitted rapid solution of any given set of conditions to determine the payout date
with a trial toll rate. The computations were repeated until the toll rate which permitted
payout in 60 years was solved directly or could be interpolated. The program permitted
various inputs to reflect the variations enumerated in the previous paragraph. The output
could be varied according to the objective of the computation.
Under the existing Panama Canal toll assessment system, tolls are levied on the basis of
cargo carrying space or ship displacement and not on the basis of cargo tonnage actually
carried. In this Appendix, projected interoceanic revenues are expressed in terms of toll
rates or dollars per cargo ton as an analytic and expository expedient for relating revenues
to projected cargo tonnages. This procedure involves the use of a constant toll rate over the
period of analysis regardless of changes in the proportion of cargo carried in freighters, dry
bulk carriers and tankers. Under the existing Panama Canal toll assessment system, in
contrast, if the Shipping Study potential tonnage, 25% freighter cargo mix forecast
materializes revenue per cargo ton would decrease from the current rate of $0.884 to
$0.777 per cargo ton in the year 2000 as the proportion of freighter cargo declined from the
current 46% to 25%. Use of this analytic and expository expedient in this Appendix should
not be interpreted as advocacy of a change in the existing toll assessment system.
Appendix Presentation
The results of the studies are presented, with minor exceptions, on three types of
display sheets entitled as follows:
1. “Toll Per Cargo Ton vs. Canal Opening Date.†Separate curves of this type are
presented for Routes 10, 14S and 15, for financing separated from that of the
Panama Canal and combined with it, and for toll rate change dates at the start of
operation of the canal option and the start of construction of the canal option.
Each sheet has curves for the two projections of transisthmian canal cargo tonnage.
ITI-A-2
2. “Cash Flow Analysis.†These sheets are used to demonstrate the variations with the
years of annual revenues, annual operation and maintenance cost, annual royalty,
and net revenue available for debt service; annual construction cost; and the
accumulation of debt during construction and liquidation after 60 years of
operation. Curves are shown for Routes 10, 14S and 15 for selected conditions. An
interest rate of 6% is used on all curves of this type.
3. “Sensitivity of Toll to Project Cost.†Individual curves are presented for Route 10
for “low†and “potential†tonnage projections, for completion dates of 1990 and
2000, and for two toll rate changing dates, at several interest rate levels.
This Appendix discusses first the effects of separating or combining the financing of the
sea-level canal options from the revenues, costs and debts of the Panama Canal. This is
followed by a discussion of Route 10 in considerable detail with references to curves as
appropriate. Route 148 is then discussed at less length because the analyses are similar to
those for Route 10. Route 15 comes next, followed by a discussion of continued operation
of the Panama Canal. The last analysis compares the various canal options on the basis of
tolls which would have to be charged to make the options self-liquidating after 60 years of
operation. The Appendix concludes with a summary.
Financing Separated or Combined with That of The Panama Canal, Route 10
The most favorable circumstance for amortizing the costs of the various canal options
has been taken as the lowest toll rate which would permit liquidating all debts after 60 years
of operation, assuming a particular interest rate. The tolls required with the â€low†tonnage
projection are considered more relevant than those with the “potential’’ projection. The
most favorable conditions prevail generally if the financing of the canal option were
combined with the revenues, costs and debt of the Panama Canal rather than being
considered separately from the revenues and costs of the Panama Canal. This is illustrated in
Figures Al-1 and Al-2 and Table A1-1.
The advantage of combined financing results from the fact that net revenues from the
operation of the Panama Canal can be used effectively to defray the construction costs of
the new canal option. This advantage does not occur with early (1990) completion of Route
10 because the Panama Canal Company debt and the cost of the improvement program!’
would not have been liquidated by the time construction of Route 10 would be completed.
(See Figure A1l-28). This is reflected in the higher tolls under combined financing than for
separate financing in connection with the 1990 completion date shown in Table A1-1. Early
completion of Route 10, however, is not favorable because interest rates of 6% or more
cannot be supported with the “low†tonnage projection within the $1.30 upper limit used
on toll rates for this study. :
On the basis of the foregoing, no further consideration is given in the succeeding
discussions to financing which separates the revenues and costs of the Panama Canal from
those of the canal options.
1 Recommended in “Improvement Program for the Panama Canal, 1969†by A. T. Kearney and Company, Inc.
IIT-A-3
Toll for payout after 60 years
of operation, $ per cargo ton
Toll for payout after 60 years
of operation, $ per cargo ton
1.00
0.80
Potential tonnage
Projection
0.60
1990 2000 2010
Sea-level canal opening date
1.20
=
o
°
oS
©
°
Low tonnage
projection
0.60
1990 2000 2010
Sea-level canal opening date
NOTES:
1. Sea-level canal financing is assumed to be separate from Panama Canal financing.
2. Panama Canal assumed on stand-by for 10 years after sea-level canal is opened, and in
moth-balled state thereafter.
3. Route 10 cost is $2.88 billion.
ROUTE 10 TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE A1-1
IlI-A-4
S60
oa
Sw
Ohare
= § 1.00
=
of
=8
QqgQoOec
u-* O
oOo
aay OO!
O35
ao 0180
Potential tonnage
Projection
0.60
1990 2000 2010
Sea-level canal opening date
1.20
oo
oa
5a
ca
ee o 1.00
a0
Se
a SOc
532
= ff)
renee ina
E28
0.80
Low tonnage
Projection
0.60
1990 2000 2010
Sea-level canal opening date
NOTES:
1. Canal financing assumed an extension of that of the Panama Canal with a debt of
$317 million in 1970.
2. Toll of $0.884 per cargo ton assumed until sea-level canal opens.
3. Panama Canal assumed on standby for 10 years, and then in mothballs.
4. Route 10 cost is $2.88 billion.
ROUTE 10 TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE A1-2
ITI-A-5
TABLE A1-1
ROUTE 10
Self-liquidating Toll,
Financing Separate and Combined
with Panama Canal
Toll per cargo ton
Year Route 10 Interest Tonnage Financing
opens rate projection Separate’ Combined?
Potential
Low
Potential
Low
Potential
Low
Net revenues of Panama Canal not available for defraying construction cost of Route 10. Operation of Panama Canal
stopped on completion of Route 10 and all revenues from transisthmian traffic accruing to Route 10 after that time.
2 Net revenues of Panama Canal available for defraying construction cost of Route 10. Same as (1) on completion of
Route 10.
Highest interest rate which can be compared from Figures A1-1 and A1-2.
4 Value is less than the lower limit of $0.60 shown on Figures A1-1 and A1-2.
Other Analyses, Route 10
Toll Change Date.
Tolls, if set in accordance with the “low†tonnage projection, would have to be
increased from the current levels to defray all costs within 60 years of operation of the new
canal option. The advantage of using net Panama Canal revenues to defray construction
costs would be enhanced the earlier the Panama Canal tolls are increased. Also, the earlier
the toll rate change is made the less the required increase. Figure Al-2 assumes that toll
rates are changed when Route 10 is placed in operation. Figure Al-3 assumes that toll rates
are changed when construction of Route 10 is started or 15 years before it is placed in
operation. Table Al-2 compares these two figures.
It will be noted that in the cases where toll rates can be lowered from the $0.884
assumed to prevail before the toll rate change date, the late change will produce the lower
self-liquidating toll. This is explained by the fact that the early change spreads the toll rate
change over a longer period of time and thus makes a smaller toll rate change necessary.
With a lowering of toll rates, the early change results in a smaller lowering and,
consequently, a greater toll rate than would be the case with the late toll rate change.
Cash Flows, Route 10
Figures Al-4 through A1l-7 are cash flow diagrams illustrating the status of the canal
books, assuming 6% interest. Figure Al-4 shows what might happen if “‘potential’’ tonnage
IIT-A-6
TABLE A1-2
ROUTE 10
Effect on Self-liquidating Tolls
of Various Toll Change Dates
Toll per cargo ton
Year Route 10 Interest Tonnage Toll change date
opens rate projection Early! Late?
Potential
Low
Potential
Low
Potential
Low
Toll changed when construction of Route 10 is started. Toll assumed at $0.884 per cargo ton until that date.
2Toll changed from $0.884 per cargo ton when Route 10 is placed in operation.
More than $1.30.
47% selected to show the differences.
> Less than $0.60.
growth prevailed and Route 10 were placed in operation in 1990, at which time the toll
rates were changed to the level required for all debts to be liquidated by 2050. The required
toll rate would amount to $1.00 per cargo ton. The maximum canal debt, about $6.8
billion, would be reached about year 2017. Also shown in Figure Al-4 are the effects on
canal debt of changes in interest rates and toll rates. If toll rates were $0.10 higher than that
required for self-liquidation, payout would occur about 21 years earlier. An increase of 0.5%
in interest rate or a $0.10 decrease in toll rate would cause the debt to increase
exponentially with no payout.
Figure Al-5, when compared with Figure Al-4, shows the effect which a delay in
completion date to year 2000 has on tolls and debt. The comparison is made in Table
Al-3.
TABLE A1-3
Route 10
Comparison of Early
and Late Completion Dates
Completion Date
1990 2000
Self-liquidating toll’
per cargo ton $1.00 $0.71
Peak debt in billions $6.8 $4.3
1Tolls changed from assumed $0.884 to the self-liquidating toll when Route 10 is placed in service, 6% interest, potential
tonnage.
III-A-7
Toll for payout after 60 years
of operation, $ per cargo ton
Toll for payout after 60 years
of operation, $ per cargo ton
0.80
Potential tonnage
projection
~
0.60
1990 2000 2010
Sea-level canal opening date
0.80
Low tonnage
projection
0.60
1990 2000 2010
Sea-level canal opening date
NOTES:
1. Canal financing assumed an extension of that of the Panama Canal with
a 1970 debt of $317 million.
. Toll of $0.884 per cargo ton assumed until canal construction is started.
. Panama Canal assumed on standby for ten years, and then in mothballs.
. Route 10 cost is $2.88 billion.
. Royalty reaches $0.22 in 1976.
OBWN
ROUTE 10 TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE A1-3
III-A-8
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1990, Toll after 1990, $1.00
$0.884 per cargo ton per cargo ton
Annual operation and maintenance
Major replacements
Annual revenue
Annual net available
for paying debt
e
5 °°†*~ Basic computation
With interest 0.5% higher, With tolls $0.10 lower,
will not,pay out. will not pay out.
1970 2000 2020 2040 2060
Year
NOTES:
1. Constructi t is $2.88 billion.
SE eo ee ee ROUTE 10 CASH FLOW ANALYSIS
2. Interest is 6%.
3. Royalty reaches $0.22 per cargo ton in 1976.
4. New canal opens in 1990 for payout in 2050. FIGURE A1-4
5. Potential tonnage projection and 25% mix used.
6. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
7. Panama Canal kept on standby for 10 years and then in mothballs.
III-A-9
Annual amounts in $100 millions
Accumulated debt in $ billions
1970
Toll to 2000, $0.884 Toll after 2000, $0.71
per cargo ton per cargo ton
Annual operation and maintenance
Annual royalty
Annual revenue Major
replacements
Annual net available
for paying debt
Accumulated debt
2000 2020 2040
Year
NOTES:
1. Construction cost is $2.88 billion.
2. Interest is 6%.
3. Royalty reaches $0.22 per cargo ton in 1976.
4. New canal opens in 2000 for payout in 2060.
5. Potential tonnage and 25% mix used.
6. Canal financing assumed an extension of that of Panama Canal
with a 1970 debt of $317 million.
7. Panama Canal kept on standby for 10 years and then in mothballs.
ROUTE 10 CASH FLOW ANALYSIS
FIGURE A1-5
III-A-10
2060
Figure Al-6, when compared with Figure Al-4, shows the effect which the date on
which toll rates are changed has on tolls and debt. The comparison is made in Table A1-4.
TABLE A1-4
ROUTE 10
Comparison of Early
and Late Toll Change Dates
Toll change date
1975' 1990?
Self-liquidating toll*
per cargo ton $0.96 $1.00
Peak debt in billions $6.5 $6.8
1 Start of construction.
Start of operation.
Tolls prior to change assumed at $0.884, interest 6%, potential tonnage.
Figure Al-7, compared to Figure Al-4, shows the effect of both late completion date
and early toll rate change on tolls and peak debt. The comparison is made in Table A1-5.
TABLE A1-5
ROUTE 10
Comparison of Early Completion Date
and Late Toll Change Date with Late Completion
Date and Early Toll Change Date
1990 completion 2000 completion
date and 1990 date and 1985
toll change date toll change date
Self-liquidating toll’
per cargo ton
Peak debt in billions
1Toll prior to change assumed at $0.884, interest 6%, potential tonnage.
The studies to this point indicate that delaying the date of constructionhas a greater
effect on reducing self-liquidating tolls than changing the toll rate at an early date. The latter
factor lowers self-liquidating tolls only if it is necessary to increase toll rates from the
$0.884 level assumed prior to the toll rate change.
If-A-11
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1975, $0.884
per cargo ton
Toll after 1975, $0.96
Ppepedcoo —
Annual operation and maintenance
Annual royalty
Major replacements
Annual revenue
Annual net available
for paying debt
Annual construction cost
oom TS Accumulated debt
1970 2000 2020 2040 2060
Year
NOTES:
. Construction cost $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 1990 for payout in 2050.
. Potential tonnage projection and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal kept on standby for ten years and then in mothballs.
NOORWN—
ROUTE 10 CASH FLOW ANALYSIS
FIGURE A1-6
III-A-12
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1985,
$0.884 per
cargo ton petal pe Toll after 1985, SO Clam rats TONY
per cargo ton
Annual operation and maintenance
Annual royalty
Annual revenue
Annual net available
for paying debt
Annual construction cost
Accumulated debt
1970 2000 2020 2040 2060
Year
NOTES:
. Construction cost is $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 2000 for payout in 2060.
. Potential tonnage and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal
with a 1970 debt of $317 million.
. Panama Canal kept on standby for ten years and then in mothballs.
OohWNn—
N
ROUTE 10 CASH FLOW ANALYSIS
FIGURE A1-7
III-A-13
Figures Al-8 and A1-9 illustrate the effect on cash flows for “potential†and “lowâ€
tonnages of using toll yield as $1.30 per cargo ton. This approximates the upper limit of
tolls presented in the Shipping Study. The figures assume that construction of Route 10 is
started in 1975 at which time toll rates are increased to $1.30 per cargo ton. The sea-level
canal is assumed to commence operation in 1990. With “‘potentialâ€â€™ tonnage, the peak debt
is about $2.9 billion and payout occurs after 17 years of operation. With “low†tonnage, the
peak debt is about $2.8 billion and payout is after about 30 years of operation.
Since the Shipping Study indicates that the “low†tonnage projection is as likely as the
“potential†projection, it would be prudent to base toll rates on the former. Figure Al-10
illustrates cash flow if tolls were set on this basis, and if the “low†tonnage projection
materializes. A late inservice date (2000) and an early toll rate change date (1985, at the
start of construction) were selected to secure the most favorable conditions financially. The
required toll rate is $1.02. The debt peaks at about $3.6 billion after 25 years of operation.
Figure Al-11 illustrates cash flow for approximately the same case as in Figure A1-10,
except that the “‘potential’’ tonnage projection is used. The canal debt peaks at about $2.5
billion when Route 10 is placed inservice and declines rapidly afterward. Payout would
occur in about 15 years. Figure Al-11 illustrates that payout would be extended to about
60 years after start of operation if toll rates were reduced to $0.43 in 2010.
Sensitivity of Peak Debt to Toll Rates and Opening Dates, Route 10
Table Al-6 and Figure Al-12 illustrate the implications for the peak debt associated
with a sea-level canal on Route 10 operated in conjunction with the Panama Canal for
several combinations of toll rates and opening dates for the sea-level canal.
Sensitivity of Self-liquidating Tolls to Reimbursable Costs, Route 10
The cost to be reimbursed from toll revenues might differ from the $2.88 billion
presently estimated construction cost of a sea-level canal on Route 10 for a number of
reasons. These include the following:
1. The cost of the canal might change during the design stage because of the
additional foundation information which would become available from design stage
explorations.
2. Part of the construction cost might be charged against presently unevaluated
benefits, thus reducing the amount to be reimbursed from tolls revenues.
3. Part of the construction cost might be determined to constitute a subsidy, reducing
the cost to be reimbursed from tolls revenues.
4. The channel size might be changed.
5. Treatment of present Canal investment might be altered.
Analyses were undertaken to determine the effect of variations in reimbursable costs on
toll rates necessary to achieve payout after 60 years of operation at several interest rate
levels. Table A1-7 lists the basic assumptions for Figures Al-13 through A1-18, which
present the results.
The figures can be used as described below for Figure Al-13. Route 10, completed in
2000 at a cost of $2.88 billion, would be self-liquidating after 60 years of operation at a 6%
interest rate if a toll rate of $1.02 per cargo ton were charged from the beginning of
construction and maintained over the 60 year period of operation. (The line identified as 6%
III-A-14
TABLE A1-6
ROUTE 10
Estimated Peak Debt fora Sea-Level Canal
on Route 10 Operated in Conjunction with
the Panama Canal
(Billions of dollars)
Toll per Low Tonnage Forecast Potential Tonnage Forecast
cargo ton Canal Opening Date Canal Opening Date
1990 1995 2000 1990 1995 2000
DS5IGS ee SG2-26 2251p 303.8* 102.9%
419.6* 246.5* 116.1* 87.4* 4.9
253:65) 10'8= 6.8*
37-5 : 2.6
3.6 : 22
2.8 : iE
*Will not payout within 60 years of operation. Debt shown in debt in year 2080, end date of computations.
Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
2Toll of $0.884 per cargo ton assumed until canal construction is started.
Interest rate is 6%.
4 Panama Canal assumed on standby for ten years, and then in mothballs.
5 Route 10 cost is $2.88 billion.
© Royalty reaches $0.22 in 1976.
TABLE A1-7
ROUTE 10
In-Service Toll Change
Projection Date Date
Low
Potential
Low
Potential
Low
Potential
III-A-15
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1975, $0.884
per cargo ton
Toll after 1975, $1.30
per cargo ton —————_»—_>
l<—_——. Major
replacements
Annual operation and maintenance
Annual royalty
Annual revenue we
Annual net available
for paying debt
Annual construction cost
1970 2000 2020 2040 2060
NOTES: ‘er
. Construction cost is $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 1990.
Payout is in 2007 because of high tolls.
. Potential tonnage and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal with a
1970 debt of $317 million.
. Panama Canal assumed on standby for ten years and then in mothballs.
ROUTE 10 CASH FLOW ANALYSIS
ao
FIGURE A1-8
III-A-16
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1975, $0.884
per cargo ton
Toll after 1975, $1.30
per cargo ton ae
Annual operation and maintenance
Annual revenue
replacements
Annual net available
for paying debt
e * “— Accumulated debt
Annual construction cost
1970 2000 2020 2040
Year
NOTES:
. Construction cost is $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 1990.
. Payout is in 2021 because of high tolls.
Low tonnage and 46% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal assumed on standby for ten years and then in mothballs.
ROUTE 10 CASH FLOW ANALYSIS
FIGURE A1-9
III-A-17
2060
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to Toll from 1985 to 2010 Toll after 2010, $1.02
1985, $1.00 per cargo ton per cargo ton SSS
$0.884
per cargo
ton
Annual operation and maintenance
=—=—- —_—
—_
Annual royalt
Annual revenue ee
Major
replacements
Annual net available for
Paying debt
~
Peco oe cee t eke.
Accumulated debt
1970 2000 2020 2040 2060
Year
NOTES:
. Construction cost is $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 2000 for payout in 2060.
. Low tonnage projection and 46% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal kept on a standby for ten years and then in mothballs.
NOOBhWN—
ROUTE 10 CASH FLOW ANALYSIS
FIGURE A1-10
III-A-18
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll from 1986 to 2010 Toll after 2010, $0.43
$1.00 per cargo ton aes
per cargo ton
8
Toll to 1985,
$0.884 per
cargo ton
6
4
Annual operation and maintenance
Annual revenue
2
J
e<— Major
replacements
0 =
seen, daca ! Annual net available
rage 7 ' for paying debt Be
1 ae eieis ee? ee?
! e Pe eee cese ee evcere®
1 Ts Accumulated debt
2 Ue are?
1, om
Annual construction cost
4
6
8
1970 2000 2020 2040 2060
Year
NOTES:
1. Construction cost is $2.88 billion.
2. Interest is 6%.
3. Royalty reaches $0.22 per cargo ton in 1976.
4. New canal opens in 2000 for payout in 2060.
5. Potential tonnage projection and 25% mix used.
6. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
7. Panama Canal kept on standby for ten years, and then in mothballs.
ROUTE 10 CASH FLOW ANALYSIS
FIGURE A1-11
III-A-19
Revenue, dollars per cargo ton
Revenue, dollars per cargo ton
1.40
1.20
1.00
0.80
1.40
1.20
1.00
Sea-level canal
opening date
Potential tonnage
and 25% mix
Peak debt, $ billions
Payout period,
years
Sea-level canal
opening date
Low tonnage
and 46% mix
0 2 4 6 8 10
Peak debt, $ billions
OTES:
Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
1
2. PCC revenue of $0.884 per cargo ton was assumed until canal construction is started.
3. Interest rate is 6%.
4.
5
6
Panama Canal assumed on standby for ten years, and then in mothballs.
. Route 10 cost is $2.88 billion.
. Royalty reaches $0.22 in 1976.
ROUTE 10 ANALYSIS OF PEAK DEBT
FIGURE A1-12
III-A-20
Toll, $ per cargo ton
1.20
1.00
0.80
0.60
1.6 2.0 2.4 2.8 3.2
Project cost, $ billions
NOTES:
1. Route 10 construction schedule is assumed.
2. Royalty rate is $0.22 per cargo ton.
3. Sea-level canal is opened in 2000.
4. Payout is in 2060.
5. Low tonnage and 46% mix are assumed.
6. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
7. Toll of $0.884 per cargo ton assumed until sea-level canal construction is started.
8. Panama Canal assumed on standby for 10 years and then in mothballs.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE A1-13
IH-A-21
Toll, $ per cargo ton
1.20
1.00
0.80
0.60
1.6
2.0 2.4 2.8 3.2
Project cost, $ billions
NOTES:
‘As
. Royalty rate is $0.22 per cargo ton.
. Sea-level canal is opened in 2000.
. Payout is in 2060.
. Potential tonnage and 25% mix are assumed.
. Canal financing assumed an extension of that of
Oar wn
Route 10 construction schedule is assumed.
Panama Canal with a 1970 debt of $317 million.
. Toll of $0.884 per cargo ton assumed until sea-level
canal construction is started.
. Panama Canal assumed on standby for ten years
and then in mothballs,
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE A1-14
III-A-22
1.20
1.00
Toll, $ per cargo ton
0.80
0.60
1.6 2.0 2.4 2.8 SZ
Project cost, $ billions
NOTES:
. Route 10 construction schedule is assumed.
. Royalty rate is $0.22 per cargo ton.
. Sea-level canal is opened in 1990.
Payout is in 2050.
Low tonnage and 46% mix are assumed.
. Canal financing assumed an extension of that of the Panama Canal with a debt of $317 million in 1970.
. Toll of $0.884 per cargo ton assumed until sea-level canal opens.
. Panama Canal assumed on standby for 10 years and in mothballs thereafter.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE A1-15
III-A-23
Toll, $ per cargo ton
1.20
1.00
0.80
0.60
1.6
2.0 2.4 2.8 see
Project cost, $ billions
NOTES:
ie
. Royalty rate is $0.22 per cargo ton.
. Sea-level canal is opened in 1990.
. Payout is in 2050.
. Potential tonnage and 25% mix are assumed.
. Canal financing assumed an extension of that of the Panama
oar WN
NS
Route 10 construction schedule is assumed.
Canal with a debt of $317 million in 1970.
. Tolls of $0.884 per cargo ton assumed until sea-level canal opens.
. Panama Canal assumed on standby for ten years and in mothballs thereafter.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE A1-16
Ill-A-24
Toll, $ per cargo ton
1.20
1.00
0.60
1.6 2.0 2.4 2.8 3.2
Project cost, $ billions
NOTES:
Route 10 construction schedule is assumed.
. Royalty reaches $0.22 per cargo ton in 1976.
. Sea-level canal is opened in 1990.
. Payout is in 2050.
. Low tonnage and 46% mix are assumed.
. Canal financing assumed an extension of that of the Panama Canal with a 1970 debt of $317 million.
. Toll of $0.884 per cargo ton assumed until sea-level canal construction is started.
. Panama Canal assumed on standby for ten years and then in mothballs.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE A1-17
OnNOORWN =
III-A-25
Toll, $ per cargo ton
1.20
1.00
0.80
0.60
1.6
2.0 2.4 2.8 a2.
Project cost, $ billions
NOTES:
OnhWN—
~
. Route 10 construction schedule is assumed.
. Royalty reaches $0.22 in 1976.
. Sea-level canal opens in 1990.
. Payout is in 2050.
. Potential tonnage and 25% mix are assumed.
. Canal financing assumed an extension of that of Panama
Canal with a 1970 debt of $317 million.
. Tolls of $0.884 per cargo ton assumed until
sea-level canal construction is started.
. Panama Canal assumed on standby for ten years
and then in mothballs.
ROUTE 10 SENSITIVITY OF TOLL TO PROJECT COST
FIGURE A1-18
III-A-26
passes through $2.88 billion as measured on the horizontal scale at a toll rate of $1.02 per
cargo ton, as measured on the vertical scale). If reimbursable costs were determined to be
one-half billion dollars less for some reason, the comparable toll would be $0.95 per cargo
ton. (The line identified as 6% passes through $2.38 billion as measured on the horizontal
scale at a toll rate of $0.95 per cargo ton, as measured on the vertical scale).
Figures Al-13 and the others may also be used to approximate the effect of royalty
tates differing from the $0.22 per cargo ton used in the analyses. For example, tolls of
$0.83 per cargo ton, out of which royalties of $0.17 per cargo ton are paid, would have the
same financial effect as tolls of $0.88 per cargo ton as read on the figure from which
royalties of $0.22 per cargo ton are assumed to be paid.
Recoverable Construction Costs, Route 10, Panama Canal Toll Levels
Figures Al-13 through A1l-18 can be used to determine the approximate portion of
Route 10 construction costs which could be recovered at various interest rates and toll
levels. The amounts which could be recovered using current Panama Canal toll rates are
examined below on the basis that the current tolls have not been changed for a long time,
and may also be resistant to future change. The values in the following Table A1-8 are taken
from Figures Al-13 and A1-14.
TABLE A1-8
ROUTE 10
Recoverable Construction Costs
at Current Panama Canal Toll Rates
Construction Cost in Billions
Interest Rate Recoverable Unrecoverable
“Potential’’ tonnage
projection’
6%
7%
7.6%
“Low†tonnage projection?
6%
6.7%
1Based on a toll rate of $0.777 per cargo ton on the vertical scale of Figure A1-14; corresponds to the 25% freighter
cargo mix.
Lower limit of reimbursable costs examined in the sensitivity studies.
Based on a toll rate of $0.884 per cargo ton on the vertical scale of Figure A1-13; corresponds to the 46% freighter
cargo mix.
2
Sensitivity of Tolls to Transit Capacity, Route 10
The Engineering Feasibility Study indicates that the capacity of Route 10 is 38,000
transits a year unless operational methods not now considered safe can be adopted after
III-A-27
experience has been gained in operating the sea-level canal. The 38,000 transit capacity
would be exceeded in about year 2025 if the “‘potential’’ tonnage growth and 25% freighter
cargo mix were realized. Studies were undertaken to determine the effect on self-liquidating
tolls if transit capacity were found to be less than the 39,300 transits a year projected for
the period after 2040 with the “‘potential’’ tonnage projection. The results of the study are
shown graphically in Figure Al-19 and in tabular form in Table A1l-9. The effect on
self-liquidating tolls is small.
TABLE A1-9
ROUTE 10
Effect of Transit Capacity
on Self-liquidating Tolls
Capacity, Self-liquidating
Transits per Year Toll per Cargo Ton’
39,300 and above
38,000
36,000
34,000
1 Route 10 opens in 1990 and pays out in 2050. Interest 6%. Potential tonnage and 25% mix. Tolls change from
assumed $0.884 in 1975 at the start of construction.
If canal operating experience shows that additional transit capacity cannot be secured
any other way, a bypass could be provided at a cost of $460 million, after four years of
construction. For the “potential†tonnage growth, 25% freighter cargo mix, the bypass
should be ready for operation in 2025. Figure A1-20 illustrates the changes in cash flow if
(a) tolls were changed in 1975 by the amount necessary to maintain payout date, and (b)
tolls were maintained at the former level and payout date were allowed to change. Table
A1-10 summarizes the results.
TABLE A1-10
ROUTE 10
Effects of a Bypass
Toll per Peak Debt, Year of
Analysis? Cargo Ton Billions Payout
Without bypass? $0.957
With bypass 0.957
With bypass 0.963
Istart Route 10 construction and increase tolls from $0.884 per cargo ton in 1975. Start operation in 1990. Start
bypass operation in 2025. 6% interest. Potential tonnage.
Assuming Route 10 without a bypass has a capacity exceeding 39,300 transits a year.
III-A-28
Transit capacity, thousands of ships per year
$0.95 0.96 0.97 0.98 0.99 $1.00
Toll required to liquidate all debts in 2050
NOTES:
. Construction cost is $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 in 1976.
. New canal opens in 1990 for payout in 2050.
. Potential tonnage and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal kept on standby for 10 years and then in mothballs.
NOOR WD =
ROUTE 10 SENSITIVITY OF TOLLS TO TRANSIT CAPACITY
FIGURE A1-19
III-A-29
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1975, $0.884
per cargo ton
Toll after 1975 as
indicated below
Annual operation and maintenance
Major replacements
Annual revenue
Annual net available for
paying debt
4 +4
ate:
+
Annual construction LES
cost, bypass
Sea-level canal ;
Accumulated debt without
bypass, toll $0.957 per cargo
ton
Accumulated debt with bypass,
toll $0.963 per cargo ton
Accumulated debt with bypass, toll $0.957 per cargo ton
1970 2000 2020 2040 2060
Year
NOTES:
1. Construction cost $2.88 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
New canal opens in 1990 for payout in 2050.
. Potential tonnage projection and 25% mix used.
Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal kept on standby for ten years and then in mothballs.
. Cost of bypass $460 million.
ROUTE 10 CASH FLOW ANALYSIS
EFFECTS OF A BYPASS
FIGURE A1-20
III-A-30
If tolls were set according to the “low†tonnage projection, the higher toll rates would
automatically provide the needed funds for construction of additional facilities should rapid
growth of traffic make them necessary. The additional funds available from this procedure
would exceed the amounts shown to be necessary by the preceding analysis.
The Panama Canal presents an alternative method for providing additional transit
capacity if needed. The effect on tolls would probably be less than discussed above for the
bypass case.
Route 14S
Figures Al-21 and Al-22 show the influence of canal opening date on tolls per cargo
ton at various interest rates. The former figure assumes tolls to be changed when Route 14S
is opened for service, and the latter, when construction is started. The curves show the same
characteristics as the curves for Route 10, i.e., with self-liquidating tolls greater than $0.884
per cargo ton, lower tolls will result with the early toll rate change date. For example, with
an early toll rate change, an in-service date of 2000, “low†tonnage and 6% interest,
self-liquidating toll rates would amount to about $1.09 per cargo ton. (See Figure A1-22)
With the late toll change date the required tolls would be more than the $1.30 per cargo ton
used as the upper limit to tolls in these studies. (See Figure Al-21)
The greater cost and longer construction period of Route 14S would require a higher
toll and result in a greater peak debt than Route 10 under the same conditions. Figure
A1-23 shows cash flows for Route 14S under the same general conditions as Figure A1l-4 for
Route 10. The two figures are compared in Table Al-11.
TABLE A1-11
Comparison of
Routes 10 and 14S
Cost, billions
Construction period, years
Self-liquidating toll, per cargo ton! $1.00 $1.10
Peak debt, billions $6.8 $7.9
Start operation and change tolls from $0.884 in 1990. Interest 6%. ‘‘Potential’’ tonnage.
Route 15
Figures Al-24 and A1-25 show the influence of canal opening date on toll per cargo ton
at various interest rates. The former assumes toll rates to be changed when the deep draft
locks are opened for service, and the latter, when construction of the locks is started. The
curves show the same general characteristics as similar curves for Routes 10 and 14S, i.e.,
with self-liquidating tolls greater than $0.884 per cargo ton, lower tolls will result with the
early toll rate change date. For example, with the early toll rate change date, an in-service
date of 1990, “low†tonnage and 6% interest, the self-liquidating toll would amount to
IIT-A-31
1.20
0.80
Toll for payout after 60 years of
canal operation, $ per cargo ton
Potential tonnage
projection
0.60
1990 2000 2010
Sea-level canal opening date
0.80
Toll for payout after 60 years
of canal operation, $ per cargo ton
Low tonnage
projection
0.60
1990 2000 2010
Sea-level canal opening date
NOTES:
1. Canal financing assumed an extension of that of the Panama Canal with a debt of $317
million in 1970.
2. Toll of $0.884 per cargo ton assumed until sea-level canal opens.
3. Panama Canal assumed abandoned.
4. Route 14S cost is $3.04 billion.
5. Royalty reaches $0.22 in 1976.
ROUTE 14S TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE A1-21
III-A-32
Toll for payout after 60 years
Toll for payout after 60 years
1.20
1.00
of operation, $ per cargo ton
0.80
0.60
1.20
c
iS
S
5 1.00
5
Qa
a
=
2
&
eS
° 0.80
6
0.60
Potential tonnage
projection
1990 2000 2010
Sea-level canal opening date
Low tonnage
projection
1990 2000 2010
Sea-level canal opening date
NOTES:
1.
OBRWN
Canal financing assumed an extension of that of the Panama Canal with a debt of $317 million
in 1970.
. Toll of $0.884 per cargo ton assumed until construction of sea-level canal is started.
. Panama Canal assumed abandoned.
. Route 14S cost is $3.04 billion.
. Royalty reaches $0.22 in 1976.
ROUTE 14S TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE A1-22
ITI-A-33
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1990, $0.884 Toll after 1990, $1.10
Pemcangogton per cargo ton
Annual operation and maintenance
Annual royalty
Annual revenue Major replacements
Annual net available
for paying debt
V",
A= Annual construction cost
\
\
\
\
1970 2000 2020 2040 2060
NOTES: veer
. Construction cost is $3.04 billion.
. Interest is 6%.
. Royalty reaches $0.22 per cargo ton in 1976.
. New canal opens in 1990 for payout in 2050.
. Potential tonnage and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Panama Canal locks abandoned with opening of sea-level canal.
ROUTE 14S CASH FLOW ANALYSIS
FIGURE A1-23
NOOBWN—
III-A-34
Toll for payout after 60 years
of operation, $ per cargo ton
Toll for payout after 60 years of
operation, $ per cargo ton
1.20
1.00
0.80
Potential tonnage
projection
0.60
1990 2000 2010
Deep draft lock opening date
1.00
0.80
Low tonnage
projection
0.60
1990 2000 2010
Deep draft lock opening date
NOTES:
1. Financing of deep draft locks assumed an extension of that of Panama Canal with a 1970
debt of $317 million.
2. Toll of $0.884 per cargo ton assumed until deep draft lock opens.
3. Cost of deep draft locks is $1.53 billion.
4. Royalty reaches $0.22 per cargo ton in 1976.
ROUTE 15 TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE A1-24
III-A-35
1.20
0.80
Toll for payout after 60 years
of operation, $ per cargo ton
Potential tonnage
projection
0.60
1990 2000 2010
0.80
Toll for payout after 60 years of
operation, $ per cargo ton
Low tonnage
projection
0.60
1990 2000 2010
Deep draft lock opening date
NOTES:
1. Financing of deep draft locks assumed an extension of that of Panama Canal with a 1970
debt of $317 million.
2. Toll of $0.884 per cargo ton assumed until deep draft lock construction is started.
3. Cost of deep draft locks is $1.53 billion.
4. Royalty reaches $0.22 per cargo ton in 1976.
ROUTE 15 TOLL PER CARGO TON VS. CANAL OPENING DATE
FIGURE A1-25
III-A-36
$1.02 (Figure Al-25). With the late toll rate change date (Figure A1-24), the required toll
would be $1.10.
Figure Al-26 shows the cash flows for the same conditions as shown on Figure A1-4 for
Route 10 and Al-23 for Route 14S. Figure Al-27 is a modification of the figure preceding
it in that the present locks are assumed to require replacement by 2000. This date probably
represents the earliest date at which replacement would be required, if at all. The 35,000
annual transit capacity of Route 15 is indicated on Figures Al-26 and A1-27 by the break in
the revenue curve at about the year 2015.
The lower first cost of Route 15 permits lower tolls and lower peak debts, even if
replacement of the present Panama Canal locks were required by 2000. The sea-level canal
options and the lock canal options are compared in Table A1-12.
TABLE A1-12
Comparison of Sea-Level and
Lock Canal Options
Sea-Level Canals Lock Canals
10 14S 15 15
Panama Canal locks
replaced 1 No Yes
Cost, billions $2.88 $3.04 SipOSieo2 oS4
Self-liquidating toll?
per cargo ton $1.00 $1.10 $0.83 $0.91
Peak debt $6.8 $8.9 $3.8 $4.4
Not applicable.
2$4 .53 billion for Route 15 construction plus $800 million to replace Panama Canal locks.
3Start operations of each option and change tolls from $0.884 in 1990. Interest 6%. Potential tonnage.
Continued Operation of The Panama Canal
Continued use of the present Panama Canal, improved as recommended in the Kearney
Report, is a possible alternative to the sea-level canal and lock canal options. Because of its
size limitation to 65,000 DWT ships and its capacity limitation of 26,800 transits a year, it
is not comparable to the other options under consideration.
The finances of continued operation of the Panama Canal under the Panama Canal
Company and including a Canal Zone Government at its present size has been examined
using a toll rate of $0.884 per cargo ton for both the “potential†and the “low†tonnage
projections, and $0.884 declining to $0.777 per cargo ton in year 2000 for the “potentialâ€
tonnage projection.? Even under these more costly operating assumptions than were used
with the sea-level canal options, the current debt on which the Panama Canal Company pays
interest and the cost of the Kearney improvements would be paid off at a relatively early
Estimated in the Shipping Study using present Panama Canal toll structure and level. The decline in‘yield per cargo ton with
the “potential†tonnage projection is a result of the decline.in the percentage of cargo assumed to be carried in freighter
from 46% in 1970 to 25% in 2000.
III-A-37
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1990, $0.884
per cargo ton
Toll after 1990, $0.83 ———»—»
per cargo ton
Annual operation and maintenance
Canal with deep draft
locks saturated
Annual revenue
D Annual royalty
Annual net available
for paying debt ,
Pee e ce weceeee® oe Accumulated debt.
1970 2000 2020 2040 2060
NOTES:
1. Construction cost for deep draft locks is $1.53 billion.
2. Existing locks not replaced.
3. Royalty reaches $0.22 per cargo ton in 1976.
4. Deep draft locks open in 1990 for payout in 2050.
5. Potential tonnage and 25% mix used.
6. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
7. Interest is 6%.
ROUTE 15 CASH FLOW ANALYSIS
FIGURE A1-26
ITI-A-38
Annual amounts in $100 millions
Accumulated debt in $ billions
Toll to 1990, $0.884
Toll after 1990, $0.91 ———>—>
Per cargo ton
Annual operation and maintenance
Canal with deep draft
locks saturated
Annual royalt
Annual revenue
—_>
Annual net available
for paying debt
ee iciete AG ! Replacements for
° ! existing locks
se
een
cl
a New deep draft locks
Lod
.° °* — Accumulated debt
1970 2000 2020 2040
Year
NOTES:
DHNOORWN>
. Construction cost of deep draft locks is $1.53 billion.
. Construction cost of replacements for existing locks is $800 million.
. Royalty reaches $0.22 per cargo ton in 1976.
. Deep draft locks open in 1990 for payout in 2050.
Replacement locks open in 2000.
. Potential tonnage and 25% mix used.
. Canal financing assumed an extension of that of Panama Canal with a 1970 debt of $317 million.
. Interest is 6%.
ROUTE 15 CASH FLOW ANALYSIS
FIGURE A1-27
III-A-39
2060
date. Figure Al-28 shows how this date would vary with different interest rates. After the
debt is paid off, a toll somewhat less than $0.60 per cargo ton (depending on the tonnage
projection) would cover cost of operation and maintenance.
One financial advantage of the Panama Canal is apparent at this point. The Panama
Canal, even with its more expensive operating organization, and paying interest at a greater
rate then at present, would be debt-free sometime before 2000 while the sea-level canal
options would not be free until 2060 if built under the most favorable circumstances
including higher tolls.
Figure Al-29 develops this advantage further in that it shows the excess of revenues
over costs by 2050, assuming various interest rates and “low†and “potential†tonnages.
Also shown are the present values of these excesses. The values on this figure are comparable
to zero accumulation and zero present value of Routes 10 and 14S if completed in 1990 and
if substantially greater tolls were charged.
Ranking of Canal Options
One way of ranking the major canal options considered within the context of the
“payout analysis†is by the toll per cargo ton which would have to be charged to liquidate
the costs charged against each option after 60 years of operation. This ranking is given in
Table Al-13 which assumes a 6% interest rate, start of operation of each new construction
TABLE A1-13
Canal Options Ranked by
Self-Liquidating Tolls
Required Tolls per Cargo Ton’
“Low†Tonnage “Potentialâ€
Canal Option Projection Projection
Present canal improved as recommended
by Kearney
Present canal improved as recommended
by Kearney and existing locks replaced
in 2000
Route 15
Route 10
Route 14S
Route 15 with existing locks replaced
in 2000
Royalties reach $0.22 per cargo ton in 1976, tolls change from $0.884 per cargo ton at the start of construction of the
canal option, canal option in service in 2000, financing of the canal option assumed an extension of that of Panama
Canal, and all debts liquidated with interest at 6% after 60 years of operation.
Required tolls after liquidating the cost of Kearney improvements and current debt on which Panama Canal Company
pays interest and including cost of Canal Zone Government.
Tug charges of $0.02 per cargo ton added to values derived from analyses to make them comparable to those for
sea-level canal options.
Cost of Canal Zone Government included.
Nn
wo
>
III-A-40
Interest rate
Potential tonnage
projection (1)
fe Potential tonnage
Low tonnage
projection (1) projection (2)
2000 2010 2020
1990
1980
Year in which debt is paid out
1970
NOTES:
1. Toll rate assumed as $0.884 per cargo ton.
2. Tolls based on existing Panama Canal structure and rates.
3. 1970 Panama Canal debt assumed as $317 million.
4. $92 million canal improvement program assumed.
5. Royalties reach $0.22 in 1976.
PANAMA CANAL ESTIMATED PAYOUT DATE OF DEBT VS. INTEREST RATE
FIGURE A1-28
III-A-41
Value in 2050 of excess of revenues over
Present value of excess of revenues over
Operation, maintenance and royalty to
operation, maintenance and royalty if
left to accumulate at interest. $ billions.
year 2050. $ millions.
120
100
80
60
40
20
1400
1200
1000
800
600
400
200
Potential tonnage
(1)
Potential tonnage
(2)
Low tonnage
(1)
4% 6% 8% 10%
Interest rate
Potential tonnage
(1)
Potential tonnage
(2)
(1)
4% 6% 8% 10%
Interest rate
NOTES:
. Tolls assumed as $0.884 per cargo ton.
. Tolls based on existing Panama Canal System.
. 1970 PCC debt of $317 million and $92 million improvement costs assumed paid out first.
. Royalties reach $0.22 per cargo ton in 1976.
. Neither deep draft locks nor replacement locks assumed to be constructed.
OPWN
CONTINUED OPERATION OF PRESENT PANAMA CANAL
FIGURE A1-29
III-A-42
option in 2000, and a change of tolls from the assumed $0.884 per cargo ton to the required
level at the start of construction of the option. The required tolls are given for both the
“low†and the “‘potentialâ€â€™ tonnage projections.
Summary
The results of the work described in this Appendix are summarized as follows:
1. The least expensive way to provide for transisthmian traffic consists of continuing
the operation of the Panama Canal even though the canal will not meet the needs
of ship size or annual transit capacity in the future.
2. The Panama Canal would provide the least expensive, though limited, service even
if it were found necessary to replace the existing locks by the year 2000.
3. Route 15 would provide the next least expensive service, provided the existing
locks need not be replaced. If the present locks require replacement by 2000, the
sea-level canal options would provide less costly service.
4. Route 10 would provide less costly service than Route 14S, but more costly than
the previously mentioned lock canal options except Route 15 if the present
Panama Canal locks must be replaced in 2000.
5. Self-liquidating financing of Route 10 based on the “low†tonnage projection
appears possible. One possible set of circumstances consists of the following:
(1) Route 10 financing an extension of that of Panama Canal.
(2) Start construction and change toll rate in about 1985 to the following on the
basis of the “low†tonnage projection.
Interest Rate Toll per Cargo Ton
6% $1.02
7% 1.13
8% 1.27
(3) If tonnages grow faster than the “low†rate, added capacity, if required, can
be provided by constructing a bypass which could be paid for from revenues
without increasing tolls.
IlI-A-43
6. If Route 10 were placed in operation in 2000 and the present Panama Canal toll
structure were retained, the revenues would pay off the amounts indicated below,
leaving unrecovered construction costs as also indicated below:
Construction Cost in Billions
Interest Rate Recoverable Unrecoverable
“Potential’’ tonnage
projection
6% $2.9 $0.0
7% 2a 0.8
7.6% 1.6 les
““Low†tonnage
projection
6% 2.0 0.9
6.7% 1.6 1.3
Source: Table A1-8
II-A-44
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Study of Int
ANNEX IV
REPORT OF THE STUDY GROUP
ON
INTEROCEANIC AND INTERCOASTAL SHIPPING
Submitted to
The Atlantic-Pacific Interoceanic Canal Study Commission
April 1970
REPORT OF THE STUDY GROUP
ON
INTEROCEANIC AND INTERCOASTAL SHIPPING
Table of Contents
Chapter
I INTRODUCTION
HOOW >
II. THE PRESENT CANAL
AM ITtTOMUC OMe arr yan coop tray koa nee e erowy-ue cucausteve ueve.eaceaens
3a CAD ACI LV are heen ey tae e WNT Pac ihwn Hep ie ta alaul fen ecw by po eeuew eens
SOLS Ree ener aera ca oily oR rare WER hog". ace axtie Macau: Gestion
Ill. REVIEW OF PREVIOUS PANAMA CANAL TRAFFIC STUDIES
IV. ISTHMIAN CANAL TRAFFIC FORECAST
Se eae
Transit Projections for All Canal Options for Capacity
andgRevenuerblanninceenneeee erence ccc omen
PUTPOSEVOL ChE sS tu dl Vie cz cenyarcusenrvar enue Gea wie cgi encaspomsnemer terete ©
ScoperotathesS tua yj re yaycia tye te ycmst ate cootkeronais use vena ere Caewee ions
Conductotthe Study ss wis covscosus< here + 6 hiss hes ties Graceas ooedne
BASIC EASSUTHP CIO Maes pe yep ce zon ess sees Ge siicuici Ge sews lewenlereuautrewegoucdareee =
StudypPresentationiaups..cesciync sodas sawn ae aioe is cee amen
ATAETOCUICE OM cps iaees ic tila ex vey cnet eam isttooel = sus ster owes © ateuersn acre
Me tho dologyg pipsrecsiet a sesis cinereus) is euro for es esse ev ouie|layie fal exnetrerrecits
Economic Considerations ...........-....--2 +e ee ee ee eres
Potential Cargo Tonnage Forecasts ............----+++-00-
Shippingeinendst yr. catsschorerg cranes esnecit ac creesneteren eerdinee Giaetss
Table of Contents (Cont’d)
Chapter Page
V. POTENTIAL REVENUE FOR USE OF A SEA LEVEL CANAL
A. Introductiangand:Summany Say. aie POW .. oc see oe eee IV-87
B. ‘Revenue:Borecasts0% 5 en oe ace eee IV-88
C. ‘Tolls Sensitivity? -AaR ae ee OE Aa Oa... cee eee IV-91
D.- , Tolls;Structures 7. he ee cee ee ee IV-133
VI. CONCLUSIONS... =| @USROL? TRIAT Lk See ee IV-145
Appendix
ip METHODOLOGY FOR COMPUTATION OF PROJECTED CANAL
TRABREICCANDIRE VENUES Sees et ee ere IV-A-1
De ANALYSIS OF PANAMA CANAL CARGO TONNAGE HISTORY .. IV-A-41
3. ISTHMIAN CANAL POTENTIAL TONNAGE FORECAST ........ IV-A-57
4. HAR BORSAND FORGE DEVE ORME Ne IV-A-161
5). STUDY OF SHIP DELAY COST AND RELATED CANAL
LOCATION BENEBI Si ato eee ae oe ee ee IV-A-175
IV-iv
II-2
II-3
II-4
III-1
III-2
IV-1
IV-2
IV-3
IvV-4
IV-5
IV-6
IV-7
IV-8
List of Tables
Page
Panama Canal Traffic, Fiscal Years 1915
MOUSE COME eee sergeants Sits crag os feos ko seternes alee ae cue cate se IV-10
Panama Canal Transits and Tolls by Type of Ships,
Commercial Ocean Traffic, 1946-1969...................... IV-13
Panama Canal Transits and Tolls by Type of Ship,
Commercial Ocean Traffic, FY 1968 and 1969 ............... IV-14
Panama Canal Transits and Tolls by Type of Ship,
Commercial Ocean Traffic Percentage Distribu-
THOmMEIOA G=19 69) pes omer oye vito sun srorep enact Roatan Ae SOLO RS IV-15
Comparison of Traffic Projections (Isthmian Canal
Studies - 1947) with Actual Experience .................... IV-20
Commodity Projections (SRI- 1967) ......................05. IV-24
Worldk@ceanbornemlinad een nner ieee nearer nets IV-30
World Oceanborne Goods Loaded by Type of Cargo ............. IV-31
Comparison of World Tonnage and Panama Canal
OMT ae 8p ek ea aa eh ss oa ORM LEE Oe et NL. I-33
Growth of Merchant Fleets of the World (1949-1968)
Oceangoing Steam and Motor Ships of 1,000
Grosswhonsian Overs s enceatc eerece 6 ceo Sota See cle aeua IV-39
Twelve Major Maritime Fleets of the World,
DecembersSiPyltO OS vee lpeys seh ea ree Aeeagesc 5, sis /eue dedey saeco aoe IV-40
Deadweight Percentage Distribution of the World
Bleetiby Wessel Glass iiss 26h Be cee nee, Reap ate jones hous auacepeigaye youd tard IV-41
Panama Canal Cargo Tonnage by Major Category,
EE TSIIKSO)~ ia aceaone Seale: esp ace eo Sigel Ceo eoke rece crea rines ines oman ene Sree eas IV-43
Growth Rates, Panama Canal Total Cargo Tonnage.............. IV-45
IV-v
Table
Iv-9
IV-10
IV-11
IV-12
IV=13
IV-14
IV-15
IV-16
IV-17
IV-18
IV-19
IV-20
IV-21
IV-22
List of Tables (Cont’d)
Major Trade Routes, Panama Canal Commercial Ocean
Traffic, Selected Fiscal Years 1947-1969 ...............
Comparison of Commercial Cargo Shipments to Asia
with Other Panama Canal Traffic, Fiscal Years
1947 through 1969
Comparison of Commercial Cargo Shipments to and
from Asia with Other Panama Canal Traffic,
Fiscal Years 1947 through 1969
Effect of Military Operations in Southeast Asia on
Traffic Through Panama Canal — Fiscal Years
1964 through 1969
Effect of Military Operations in Korea on Traffic
Through Panama Canal — Fiscal Years 1950
through 1956
Forecast of Total Potential Cargo Tonnage for a
Transisthmian Canal
Role of Japan’in Panama Canal Traffic — Fiscal
Years 1950 through 1969
Potential Cargo Tonnage Forecast
Commercial Traffic Exclusive of Japan Trade
Low Forecast of Cargo Tonnage for a Transisthmian
Canal
Manker— SizelDistributionse eee eee eee eee Lee
Bulki@anriersi— Sizes Distribution eee eo ree
JANIS VAS IDIOM goons cccedanboceodbobddooe
Panama Canal Experience FY 1968 and First Half
BY T9G9 ston ae ao ola en cee eR tech eo Mee che ae eee
Page
IV-46
IV-48
Iv-49
IV-50
IV-52
IV-54
IV-58
IV-61
IV-64
IV-65
IV-72
IV-73
IV-74
IV-78
Table
IV-23
IV-24
IV-25
IV-26
V-1
V-2
V-4
V-5
V-7
V-8
V-9
V-10
List of Tables (Cont’d)
Panama Canal Experience 1951-1967, Commercial
Ocean Traffic
Average DWT Projections
Projected Average Toll Per Ton
Projected Transit Requirements — Potential
Tonnage Forecast and Low Tonnage
Forecast
Average Panama Canal Tolls Per Long Ton of Cargo
MMransited) jus SEN eae eM Set ch heb ER Be, sean laters
Comparative Costs for Transportation Modes .............
Relationship of Ship Size and Alternate Route to Tolls
for the Major Routes Using Panama Canal FY
LOE Os ale. ay MN a See Ae ted see eh atreny
The World’s Merchant Fleet — History of Ships
IO {OXOLO) IDNA evaysl OWE Saco ocnocovcdacucoabonsoode
Comparison of Tanker Operating Costs with Panama
Canal Tolls
Relationship of Canal Transit Size Capacity and
Attractiveness of Using Alternative Routes
and Larger Ships
Trans-Isthmian Pipeline Estimated Construction
Costs-Annual Capacity 50,000,000 Tons
Trans-Isthmian Pipeline Estimated Charge Per BBL
Trans-Isthmian Pipeline — Consortium Proposal
Panama Canal vs. Land Bridge — Comparison of
Nautical Miles and Transit Times
IV-vii
Page
IV-79
IV-83
IV-83
IV-84
IV-90
IV-100
IV-101
IV-105
IV-108
IV-109
IV-112
IV-113
TV-115
IV-120
List of Tables (Cont’d)
Land Bridge Proposed Rail Rates by ATSF
Railroad
Estimated Cost by Containership For the Trans-
portation of Containers by Foreign Flag
Operator
Comparison of Costs for Land Bridge and Panama
Canal Routes, Yokohoma — Europe
Comparison of Costs for Land Bridge and Panama
Canal Routes, Yokohoma — New York
Comparison of Costs for Land Bridge and Panama
Canal Routes, Yokohoma — Chicago
Forecast of Free World Air Freight
Comparison of Ocean and Air Shipments Costs —
Automobiles from Yokohoma to Chicago
High Value/Ton Commodities Using Panama Canal,
FY 1967
Summary of Major Commodity Movements Through
Panama Canal — Fiscal Year 1967
Panama Canal Experience FY 1968 and First Half
PY, TOGO! soe. 2c.0, nine Ana here teas te ord ae Re er eee ner
Panama Canal Experience 1951-1967 Commercial
Océan Traffic |... nneted ent Soe Aes See
jlotaliRotentialslionnagem as eeeeeneeeeeee
CapgorMaw 6.055 se ois dos, Od ee Ce ee
AveraresD Wilk Projections ri aileiiii terre ient eine
ProjectedsAverace HolliPen ont elie ese eee eee
Sy els intee (ahe.\s\ ele) os) (=) oleiee
8) /e) = s' @) ee) sl (ni folie! e) elim! ial eis
IV-122
IV-123
IV-124
IV-125
IV-126
IV-130
IV-132
IV-142
List of Tables (Cont’d)
Table Page
Al-7 Rrojectedwinansit RequirementSmny see eae aioe eo cie oe eeeene IV-A-19
Al-8 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 65,000 DWT —
26,800 Max. Transit Capacity — 46%
TCI ONtE Ly eyasis sack eo ee tes CERIN DESH Ae IV-A-23
Al1-9 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 65,000 DWT —
0 Max. Transit Capacity — 46% Freighter .................. IV-A-24
Al-10 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 100,000 DWT —
O Max. Transit Capacity — 46% Freighter IV-A-25
Al-11 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 150,000 DWT —
0) Maxedliransiti@apacity 4.675) Ereighten ms ani 0 ae eee IV-A-26
Al-12 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 200,000 DWT —
0 Max. Transit Capacity — 46% Freighter .................. IV-A-27
Al-13 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 250,000 DWT —
0 Max. Transit Capacity — 46% Freighter IV-A-28
Al-14 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 65,000 DWT —
26,800 Max. Transit Capacity — 25% Freighter IV-A-29
Al-15 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 65,000 DWT —
O Max. Transit Capacity — 25% Freighter .................. IV-A-30
Al-16 Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 100,000 DWT —
O Max. Transit Capacity — 25% Freighter IV-A-31
IV-ix
Table
Al-17
Al-18
Al-19
A1-20
Al-21
Al-22
A1-23
Al-24
Al-25
A2-1
List of Tables (Cont’d)
Page
Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 150,000 DWT —
OMax. Transit'Capacity)— 25a. Hreichter mee ve Saree IV-A-32
Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 200,000 DWT —
O Max. Transit Capacity — 25% Freighter _................. IV-A-33
Computation of Projected Transits and Revenue —
Potential Tonnage Forecast — 250,000 DWT —
0 Max. Transit Capacity — 25% Freighter IV-A-34
Computation of Projected Transits and Revenue —
Low Tonnage Forecast — 65,000 DWT —
26,800 Max. Transit Capacity —
46% Freighter IV-A-35
Computation of Projected Transits and Revenue —
Low Tonnage Forecast — 65,000 DWT —
O Max. Transit Capacity — 46% Freighter IV-A-36
Computation of Projected Transits and Revenue —
Low Tonnage Forecast — 100,000 DWT —
O Max. Transit Capacity — 46% Freighter .................. IV-A-37
Computation of Projected Transits and Revenue —
Low Tonnage Forecast — 150,000 DWT —
0 Max. Transit Capacity — 46% Freighter .................. IV-A-38
Computation of Projected Transits and Revenue —
Low Tonnage Forecast — 200,000 DWT —
O Max. Transit Capacity — 46% Freighter .................. IV-A-39
Computation of Projected Transits and Revenue —
Low Tonnage Forecast — 250,000 DWT —
0 Max. Transit Capacity — 46% Freighter .................. IV-A-40
Origin and Destination of Panama Canal Traffic
Selected Yearsil947-1969wer¢ JES: 1 Bite eee ae ee IV-A-43
Table
A2-2
A3-7
A3-8
A3-9
A3-10
A3-11
A3-12
A3-13
A3-14
A3-15
A3-16
A3-17
List of Tables (Cont’d)
Summary of Destination of Panama Canal Commercial
Ocean Traffic Along Major Trade Routes, Fiscal
Years 1959-1969
Results of the Third Study, Model Y = A + Bx
(Cargo lommerss Sendes l,25653 osccoccovvsvcctcuovvc‘e‘e
Carcomlionnase;Scticsi- amen nore Lao ee
Japan — Economic Indicators ........................
Japan: Projected Product Growth Rates ..................
Japan: Projection of Cargo Tonnage Growth Based on
Historical Relationship Between Product and
DNOMMARC peewee ee rae oN eae reas LL omic aie nie AG
Japan: Economic Influence on Panama Canal Traffic ........
Japan: Economic Influence on Panama Canal Traffic ........
Japan: Economic Influence on Panama Canal Traffic
Japan: Economic Influence on Panama Canal Traffic
Forecast-Mainland China
An Extended Projection of Commercial Ocean Cargo
Tonnage for Years 2000-2040
Historical Data — West Indies
Historical Data — Europe
IV-xi
Page
IV-A-51
IV-A-60
IV-A-61
IV-A-63
IV-A-69
IV-A-71
IV-A-72
IV-A-73
IV-A-74
IV-A-75
IV-A-76
IV-A-77
IV-A-79
IV-A-81
IV-A-382
IV-A-83
IV-A-84
IV-A-85
Table
A3-18
A3-19
A3-20
A3-21
A3-22
A3-23
A3-24
A3-25
A3-26
A3-27
A3-28
A3-29
A3-30
A3-31
A3-32
A3-33
A3-34
A3-35
A3-36
A3-37
A3-38
List of Tables (Cont’d)
Page
Historical Data — East Coast South America .................. IV-A-86
Historical Data — Asia Minor — Middle East ._................. IV-A-87
HistoricallData;—A (ica 2 eee eee a eee ae IV-A-88
istonicaluD atay—= Wiest! Goast US Aus en IV-A-89
HistoricaliDatal— West Coasi Canadas een IV-A-90
Historical Data — West Coast Central America __............... IV-A-91
Historical Data — West Coast South America __................ IV-A-92
HistonicalData.—|\Occatia set ate ee eerie ae eee ae IV-A-93
HistoricallData"--tlapant 1) ee eee. ten oe eee IV-A-94
HistoricaliData— Asia (esswiapan))eysee yee ene ne IV-A-95
Historical’ Data'— BastiCoastUSAy 22pe ne te) see ee IV-A-96
Historical Data — East\Coast:Canadaig M ~:, e.cene i) ae ete IV-A-97
Historical Data — East Coast Central America .................. IV-A-98
Historical Data = West Indies. .... 525...) sae eee IV-A-99
Historical Data = EWeope). «ed 2 hese. 2 bee Go eee IV-A-100
Historical’ Data — East Coast South America)... ee ee IV-A-101
Historical Data — Asia Minor — Middle East ................... IV-A-102
Historical Data — Atrical a i.e. aS cie ene eet aero reece IV-A-103
Historical’Datal— West Coast US Aversa en ere wee IV-A-104
Historical Data — West.Coast Canaday eee eee IV-A-105
Historical Data — West Coast Central America ................ IV-A-106
IV-xii
Table
A3-39
A3-40
A3-41
A3-42
A3-43
A3-44
A3-45
A3-46
A3-47
A3-48
A3-49
A3-50
A3-51
A3-52
A3-53
A3-54
A3-55
A3-56
List of Tables (Cont’d)
Historical Data — West Coast South America
Historical Data — Oceania
Historical Data — Japan
Historical Data — Asia (Less Japan)
Curve Analysis — East Coast USA
Curve Analysis — East Coast USA
East Coast Canada
Curve Analysis — East Coast Canada
Curve Analysis — East Coast Central America ..................
Curve Analysis — East Coast Central America
Wiestalindics ies isin cet os, epee NUS Coane Be coche we uence
CuiverAnaly sist —awiest#ilndicsi eyes eee ie cere anny ae
@urvyesAnaly sista EUROPE)â€
Curve Analysis — Europe
East Coast South America
Curve Analysis — East Coast South America
Curve Analysis — Asia, Middle East
Curve Analysis — Asia, Middle East
Africa
Curve Analysis — West Coast USA
West Coast Canada
Page
IV-A-107
IV-A-108
IV-A-109
IV-A-110
IV-A-112
IV-A-114
IV-A-116
IV-A-118
IV-A-120
IV-A-122
IV-A-124
IV-A-126
IV-A-128
IV-A-130
IV-A-132
IV-A-134
IV-A-136
IV-A-138
Table
A3-57
A3-58
A3-59
A3-60
A3-61
A3-62
A3-63
A3-64
A3-65
A3-66
A3-67
A4-1
A4-2
AS-3
List of Tables (Cont’d)
CurvesAnalysis— West CoashCanadayme ya a eee eee
Curve Analysis — West Coast Central America .................
Curve Analysis — West Coast Central America
Wiest Coast Southv Americar, 125 a. enna eric eee
Curve Analysis — West Coast South America ..................
Curve*Analysis — Oceania. > i425 /20 7 ee eo as se ae
Curve Analysis — Oceania
AD AN ee SAN Re ee eee CRT nee tite nee
CurverAnaly sis; Japa cys stones eee kee ron ee
CurverAnalysisy—sAsiai(eesspapan)) mean tier ant a ae ee
CurverAnalysis\— Asia (Wessapan) eee eee eee
Indexes and Equation Coefficients for
INearomall eval WE, INNS ooocoadeeuneessasoocseusacesoe
Kowi@arsomlonnagesOlecas ley enya nee
CapacityotmsomelMalomEUro pean LOniS satan eee
Possible Obstacles to Harbor Deepening .....................-
Projected Average Ship By Type and Frequency ................
Calculation of Average Delay Cost for All Vessel
TRY eS io x. sean ee aya Soe aceite sO cL eee a ene
Geographic Comparative Advantage of Routes 8 and
DSeNiS-a-Vis banana’ Cihyapbanialiiale ee eae ee
IV-xiv
Page
IV-A-140
IV-A-142
IV-A-144
IV-A-146
IV-A-148
IV-A-150
IV-A-152
IV-A-154
IV-A-156
IV-A-158
IV-A-160
IV-A-164
IV-A-169
IV-A-177
IV-A-178
IV-A-180
Figure
III-1
IV-1
IV-2
IV-3
IvV-4
IV-5
IV-6
IV-7
IV-8
IV-9
IV-10
IV-11
V-1
V-2
v-4
List of Illustrations
Comparison of Previous Panama Canal Traffic
Forecasts and Panama Canal Actual Total
Cargo Tonnage Experience
World Oceanborne Trade Forecast
Cargo Trends in Panama Canal
Potential Cargo Tonnage — Isthmian Canal
Potential Cargo Tonnage — Isthmian Canal —
Alternate Rates of Growth for Years
2000-2040
Dry Bulk Carrier Characteristics
Freighter Characteristics
Cargo Mix — Panama Canal
Cargo Mix — 46% Freighters
Cargo Mix — 25% Freighters
Isthmian Canal Transit Projections
Potential Annual Revenues — Based on Current
Panama Canal Rates
Potential Annual Revenues — Based on Maximum
Revenues Potential Applying New Tolls
System
Equivalence of Days at Sea Operating Cost to
Present Panama Canal Tolls
Historical Ton Mile Costs (U.S. Operators
Direct Costs)
IV-xv
Ce
ee eee eee ee te et te ee te he et
Page
IV-80
IV-80
IV-80
IV-85
IV-92
IV-93
IV-104
IV-128
Figure
Al-1
Al-2
Al-3
Al-4
Al-11
Al-12
Al-13
Al-14
A3-1
A4-1
List of Illustrations (Cont’d)
Free World Air Cargo by Trade Area
DWT Vs. % of Ships With a Greater DWT — No
Maximum Ship Size Limit
DWT Vs. % of Ships With a Greater DWT — With
Mascara 917 a tee
CareoiMixe—Panamai@analeres were er ieee
Careo) Mixe— 4.675 Rreiphtersmerer cen eee ei irre
CarzoiMixe 25 ol Te1shiters metre ene een ere
Panama Canal Tons Vs. DWT
World Fleet Size Distribution — Freighters
World Fleet Size Distribution — Dry Bulkers
World Fleet Size Distribution — Tankers
World Fleet Size Expanded Distribution —
Freighters
World Fleet Size Expanded Distribution —
Dry Bulkers
World Fleet Size Expanded Distribution —
Tankers
Potential Revenues — Isthmian Canal With No
Transit Capacity Limitations — Based on
Current Panama Canal Rates
Relationship of Transport Operating Cost
to Tanker Size
Page
IV-129
IV-A-4
IV-A-4
IV-A-9
IV-A-9
IV-A-9
IV-A-10
IV-A-11
IV-A-12
IV-A-13
IV-A-14
IV-A-15
IV-A-16
IV-A-20
IV-A-21
IV-A-64
IV-A-162
Figure
A4-2
AS-1
A5-2
List of Illustrations (Cont’d)
Average Relationship Between Deadweight Size and
Ship Draft of Tankers and Dry Bulkers
General Cargo Bulk Carrier and Tanker Costs
Vs. DWT
Map of World Port Distances to Alternate Routes
8, 14, and 25
IV-xvii
Page
IV-A-167
IV-A-176
IV-A-179
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Chapter I
INTRODUCTION
Purpose of the Study
At the request of the Atlantic-Pacific Interoceanic Canal Study Commission, shortly
after its appointment in mid-1965, the Secretary of Commerce agreed to provide the
Chairman for an inter-departmental study group to determine the potential value of a new,
sea-level Isthmian canal to United States and world shipping. The Office of the Under
Secretary for Transportation was assigned the responsibility for this task, and the study
chairmanship was transferred with this office to the newly created Department of
Transportation in January 1967. In April 1969, the chairmanship reverted to the
Department of Commerce, with the Maritime Administration assuming this responsibility.
The purpose of the Shipping Study was described by the Commission as follows:
To analyze for the Commission the long-range (through year 2040) trends in
intercoastal and interoceanic shipping related to the canal; to examine the
interrelationships between a sea-level canal and shipping and finance; and in
cooperation with other agencies and the Commission, to analyze the effects of
selected toll collection and distribution plans upon interoceanic and inter-
coastal shipping.
Scope of the Study
The Commission’s original instructions to the Shipping Study Group were in the form
of a series of six questions:
1. What is the total demand for interoceanic freight transportation through year
2040, in terms of ships, cargoes, origins and destinations?
2. What changes will occur through year 2040 in the design and performance of ships
and related transportation equipment which would bear upon future capacity requirements
for the canal?
3. What will be the dimensions and operating characteristics of the largest commercial
ships through year 2040, with or without a sea-level canal?
4. To what extent will the existing canal be adequate to meet shipping needs through
year 2040?
5. What will be the effects of the sea-level canal upon intercoastal and interoceanic
shipping?
6. Considering U.S. interests and the needs of world shipping, what policy for tolls
collection and distribution should accompany the financing arrangement?
IV-1
As study effort progressed to completion, the objectives of the study were refined to
determine the following:
1. The ability of the Panama Canal to meet the future needs of world shipping, based
in part on an analysis of historical traffic experience, current forces and trends in canal
traffic, and canal capacity, to accommodate the numbers and sizes of ships for transit.
2. The nature and results of previous Panama Canal traffic studies in the light of
actual experience to date, in order to facilitate adoption of the most practicable
methodology for making a long-range forecast for future interoceanic canal traffic.
3. Potential cargo tonnage movements through an interoceanic canal based on
examination of these considerations:
a. The latest trends in world and United States economic development and
oceanborne trade.
b. Past and current trends in Isthmian canal cargo tonnage movements.
c. Historical and projected economic development of actual and potential
regional users of an Isthmian canal.
d. Future plans of the shipping industry and major users of bulk carriers as they
relate to potential canal traffic.
e. Technological developments in commercial transportation.
4. Potential transit projections through an interoceanic canal based on examination of
these considerations:
a. Plans for world and United States port and harbor development.
b. Projected ship sizes and distribution for the world merchant fleet.
c. Projected ship sizes and distribution for potential canal traffic.
5. Potential revenues for use of a sea-level canal, to include consideration of tolls rates
and relationship to potential traffic.
6. The preferred sea-level canal route alternative from the standpoint of interoceanic
shipping interests.
Conduct of the Study
Under the successive chairmanship of the Assistant Secretary of Transportation for
Policy Development and the Administrator, Maritime Administration, the Study Group was
organized to include representation from the Department of Transportation, Department of
Commerce (Maritime Administration), Department of State, Panama Canal Company,
Department of Commerce (Business and Defense Services Administration), and Department
of the Army. During the earlier phases of the study considerable attention was devoted to
analyzing the Canal Study Commission’s request for a forecast of potential Isthmian canal
traffic and revenues extending some seventy years into the future. This request stemmed
from two requirements. One was to predict the date at which the capacity of the existing
lock canal with anticipated capital improvements would be inadequate to accommodate
total demand for transit, and the other was to predict long-term capacity requirements and
revenues for the purposes of designing a sea-level canal and evaluating its financial
feasibility. At the outset, the Shipping Study Group advised the Commission that forecasts
of future economic activities decrease in reliability very rapidly as their time span increases,
and any forecast of canal shipping through the year 2040 must be highly tenuous. No such
long-range forecast had been attempted in detail in earlier canal studies.
IV-2
The initial approach of the Study Group was to obtain information on and make
projections of population, gross national product, transportation technology, and ship sizes.
An evaluation was made of the relationship between estimated economic growth in value
terms and growth in ocean trade. Subsequent projections were developed for potential cargo
tonnage volumes, transits and tolls volumes. Because of the difficulty of forecasting
individual commodity movements over the extensive forecast period, projections of
potential cargo tonnage movements were made only on an aggregate basis. The basic result
was a specific forecast of potential cargo predicated on a continuation of uniform
exponential growth.
Review of the preliminary study findings brought forth a wide range of views
concerning forecasts of future Isthmian canal traffic in terms of potential cargo tonnage. It
was apparent that large variations in the tonnage forecast would result from the various
assumptions tendered. Consequently, it was decided to conduct a detailed reexamination of
the economic factors that contribute to canal traffic and determine the range of
possibilities. Emphasis was given to the principal causative factors in the growth of Panama
Canal traffic since World War II, regional economic development as it relates to potential
canal traffic, and petroleum movements.
The range which was considered is bounded by the high projection and the low tonnage
forecast. The high projection assumes continuing growth at the average annual rate
experienced by the Panama Canal over the past twenty years. The low tonnage forecast
assumes a leveling off of traffic associated with the Japan trade; a slow incremental increase
in all other trade; and an allowance for unforseeable trends. Within this wide range, a more
detailed analysis relating canal traffic to world regional aggregations of gross national
product was developed and forms the basis for the potential tonnage forecast, which is
considered the basic forecast of this study for canal capacity and revenue planning purposes.
The low tonnage forecast is considered valid for alternative revenue planning to demonstrate
the degree of possible financial risk.
The next step in the study was to make a projection of the distribution of cargo by
type ship that might use a canal of various sizes in accordance with the range of possibilities
associated with an overall cargo tonnage forecast. Here, again, it was decided to use a range
of possibilities concerning the cargo distribution of the future among freighters, dry bulk
carriers and tankers, based on an analysis of Panama Canal cargo trends and projections of
future world merchant fleet composition by type of vessel. A methodology, which included
consideration of a ship efficiency index (the ratio of cargo tonnage transported in long to
deadweight tons (DWT)) for each type ship and the average DWT per type of ship, was
developed to convert the projected cargo mix into a projection of total transits for canal
capacity and revenue planning purposes. Revenue computations were derived by using an
average toll per ton of cargo for each type ship determined from current Panama Canal
experience. In the projection of future shipping through an interoceanic Isthmian canal,
consideration was given to plans for world and United States port and harbor development.
Conclusions were reached concerning the capability of the Panama Canal with maximum
improvements in canal facilities, operating procedures and water supply for lockages to meet
the demand for future transits.
A revenue forecast was developed which comprises a range of estimates based on
consideration of the following: the potential cargo tonnage forecast and the low tonnage
IV-3
forecast; two ship cargo mixes; and two tolls systems. The tolls systems consist of the
existing Panama Canal tolls rates and procedure of assessing charges and a system involving
the use of maximum rates based on application of a marginal pricing concept. Conclusions
were reached concerning the revenue potential of a sea-level canal, tolls rates, and structure.
The final step in the study was to make a comparative analysis of sea-level canal route
alternatives from the standpoint of shipping interests. This analysis focused attention on the
principal trade routes that contribute to Isthmian canal traffic.
Basic Assumption
For purposes of forecasting future demand for interoceanic canal utilization this study
assumes that there will be no significant interruptions in world trade growth due to general
war (major, worldwide) or economic depression (similar to 1930’s).
Study Presentation
Chapter II examines existing Panama Canal capacity, tolls, and traffic trends. Chapter
III presents a review of previous Panama Canal Traffic Studies. Chapter IV examines the
economic factors that contribute to Isthmian canal traffic and provides estimates of the
potential demand for interoceanic canal shipping services, to include forecasts of cargo
tonnage movement, estimates of potential ship size and mix, and forecasts of transits for
various Isthmian canal options. Chapter V estimates the revenue potential of a sea-level
canal and evaluates the tolls system required to obtain various levels of revenue. Chapter VI
presents conclusions derived from an analysis of data presented.
Iv-4
Chapter II
THE PRESENT CANAL
Introduction
The Panama Canal is approximately 50 miles long, deep water to deep water, and
follows a northwesterly to southeasterly direction. A ship entering the canal from the
Atlantic goes from Cristobal Harbor to Gatun Locks, a distance of 7 miles, at sea level. It is
lifted 85 feet to Gatun Lake in 3 lockages or “‘stepsâ€. From Gatun it sails, 85 feet above sea
level, to Pedro Miguel, a distance of 31 miles. A single lockage at Pedro Miguel lowers the
ship 31 feet to Miraflores Lake. A mile further south the vessel enters Miraflores Locks and,
in 2 lockages, is lowered 54 feet to the Pacific Ocean level. A ship then sails 4 miles to the
Balboa port area before entering the outer harbor.
The average time for a commercial ocean traffic vessel in Canal Zone waters in Fiscal
Year 1969 was 16 hours. The average transit for the Canal proper takes 8 hours. The fastest
transit was 4 hours and 38 minutes by the destroyer U.S.S. Manley. In Fiscal Year 1968, the
transit of 15,511 vessels of all types established a new daily average record of 42.5 transits.
In Fiscal Year 1969, the total number of transits declined slightly to 15,327 for a daily
average of 42.0 transits.
The longest passenger vessel to transit the canal was the German flag BREMEN on
February 15, 1939. She was a 51,731 gross-ton vessel with an overall length of 936.8 feet.
The widest beamed commercial ships to transit are the oil-ore carriers SAN JUAN PIONEER
and SAN JUAN PROSPECTOR, both 106.4 feet. Record cargo carried through the canal up
to March 10, 1970, was aboard the bulk carrier ARCTIC which had a load of coal weighing
60,391 long tons. The ARCTIC has a length of 848.8 feet, a beam of 105.85 feet, and
passed through the canal with a maximum draft of 39 feet 6 inches TFW.
Capacity
The capacity of the Panama Canal system is a matter of continuing, detailed study by
the Panama Canal Company. It is measured by the capability of the canal to allow passage
throughout its length on a sustained basis for a maximum number of ships and by the size of
the locks which prescribes the largest size ship which can transit. The physical operating
capacity of the canal is further constrained by the water supply available for operation of
the locks. The Panama Canal Company completed in the summer of 1969 its latest
comprehensive study of canal capacity. This study, which was conducted over a two-year
period, is essentially an updating of previous studies to ensure that all factors which limit
capacity are properly recognized and that all feasible means of augmenting capacity are
considered. The Company’s objective is to make the best possible determination of
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IV-6
attainable capacity, and set up a program of improvements in methods, equipment and
facilities which will best achieve this end.
Physical Characteristics
A major limitation on the capacity of the Panama Canal is the size of the lock chambers
which are 110 feet wide and 1000 feet long. Completion of the widening of Gaillard Cut
from 300 feet to 500 feet (scheduled for July, 1970) will eliminate another major
limitation, except that the largest ships will not be able to pass one another in the Gaillard
Cut. In order to overcome the effect of these physical restrictions, the Panama Canal
Company has constantly developed procedures governing the operation of large ships.
The Company periodically publishes revised regulations pertaining to the size and draft
limitations of vessels that may transit the canal. Restrictions with respect to beam and draft
vary on a seasonal basis in accordance with Gatun Lake levels. Based on experience to date,
the Company has determined that 106 feet is the widest beam commercial vessel acceptable
for regular transit. Transit draft restrictions vary in accordance with beam, lake level, ship
handling characteristics and other considerations. For practical purposes it appears that
vessels in the transit draft range 40 feet and greater would be precluded from transit. Vessels
in the transit draft range 36 to 40 feet are subject to draft restrictions. Depending on
variable conditions, vessels in this range could either transit fully laden, transit partially
laden or in ballast, or elect not to transit. The longest vessel that could be permitted transit
would be approximately 950 feet in length. Panama Canal Company rules allow a 6-knot
maximum speed for large ships in the Gaillard Cut section of the canal.
Number of Ships
The number of transits which can be handled annually depends upon physical operating
capacity and future improvements in canal facilities and operating procedures. The recently
completed Panama Canal Company study of canal capacity concludes that the ultimate
physical operating capacity of the canal, with modernization and augmentation of water
supply for lockages at an estimated cost of $92 million, is 26,800 annual transits.
Size of Ships
The Panama Canal is limited by draft and lock size to transit ships up to approximately
65,000 DWT when fully laden. As mentioned in the earlier discussion of physical
characteristics of the canal, for all practical purposes ships in the world’s merchant fleet that
would be precluded from transiting the canal because of size are those that exceed 106 feet
in beam and 950 feet in length. Vessels in the transit draft range 36 to 40 feet are subject to
draft restrictions.
As of December 31, 1968, the world merchant fleet consisted of 19,361 vessels of
1,000 gross tons or over. As of January 1, 1970, there were 751 ships, primarily tankers, in
the fleet too wide to enter the Panama Canal locks; as of November 27, 1969, there were
117 ships under construction and 446 on order too wide to transit the canal. In addition,
the Panama Canal Company has determined that, as of January 1, 1970, there were between
604 and 1349 ships afloat (depending on variable Gatun Lake levels) unable to go through
the locks fully laden because of draft restrictions. As of the same date, there were 87 under
construction and 297 on order unable to go through the locks fully laden.
IV-7
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IV-8
Tolls
Basis of Toll Charges
Tolls are levied on a net capacity tonnage basis, Panama Canal measurement tons (a
volume measurement). They amount to 90 cents a ton for laden ships and 72 cents unladen.
These rates have remained essentially unchanged since the canal opened. A ship which
would otherwise have to sail around Cape Horn can easily save many times the amount of
her toll by using the canal. In Fiscal Year 1969, the average toll per oceangoing commercial
transit was $6,651. The fact that Panama Canal tolls have not been adjusted as the US.
dollar purchasing power decreased means that “real dollar†toll rates have been reduced
effectively by three-fourths over the 55-year canal history.
Panama Canal tolls are based on the cargo carrying capacity of ships expressed in
Panama Canal net tons, a measure roughly equal to 100 cubic feet of cargo space. The
specific tolls rates are as follows:
1. On merchant vessels, Military Transports, tankers, hospital ships, supply ships, and
yachts when carrying passengers or cargo: 90 cents per net vessel-ton of 100 cubic feet of
actual earning capacity; that is, the net tonnage determined in accordance with the “Rules
for the Measurement of Vessels for the Panama Canal.â€
2. On such vessels in ballast, without passengers or cargo: 72 cents per net vessel-ton.
3. On other floating craft: 50 cents per ton of displacement.
Tolls on laden vessels are not levied on the baiss of the amount or type of cargo carried.
Vessels pay the laden rate whether the vessel has one ton of cargo or a capacity load of
cargo. Tolls are not charged for a small volume of “free traffic†that includes ships of the
Colombian and Panamanian Governments and ships transiting for repairs at the Panama
Canal Company operated yards.
Table II-1 includes information on the average toll and credit per long ton of total cargo
and the average toll per long ton of commercial ocean cargo for the period Fiscal Year 1915
through Fiscal Year 1969. The average toll/credit per long ton of total cargo is obtained by
dividing the total annual tolls and credits revenue in a given year by the total number of
tons of cargo that passed through the canal in that year. The average toll per long ton of
commercial ocean cargo is computed in a similar manner. This average is not paid in fact by
any ship. The basis of tolls charges is as described in the foregoing discussion.
Table II-1 shows that the average toll per long ton of cargo transited has remained
relatively stable since the canal opened. Tolls credits were not charged for U.S. Government
traffic prior to Fiscal Year 1952. For a more valid comparison of revenues through the span
of years of operation since 1915 the approximate value of tolls credits for U.S. Government
traffic prior to Fiscal Year 1952 has been provided by the Panama Canal Company. The
figures for the average toll credit per total long ton of cargo prior to Fiscal Year 1952
represent an adjusted figure to reflect assumed charges for U.S. Government traffic.
Before World War II, the adjusted average toll per long ton of total cargo was somewhat
above 90 cents. Subsequent to 1946, the low was about 78 cents in 1957 and the high was
about 91 cents in 1953. There is no consistent trend in the average Panama Canal toll per
long ton of cargo transited; however, the average for total traffic has not been below about
85 cents since 1957. Table II-1 shows that the average toll rate per long ton of commercial
ocean traffic for most years during the period from 1947 to 1969 is between 80 to 90 cents
per long ton.
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IV-11
Elements of Cost Recovered
The canal cost the United States approximately $387 million to build. When it opened
in 1914, the United States did not contemplate its operation on a self-amortizing basis. Tolls
were set at a reasonable level that would encourage the use of the canal by the world’s
merchant shipping. From 1914 to 1951 the canal was financed by annual appropriations
from the U.S. Treasury while its annual receipts were returned to the Treasury. Not until
after World War II did income approach operating costs. In 1951 the Panama Canal
Company was organized as a U.S. Government corporation under legislation which
authorized the Company to set tolls at rates sufficient to recover annual operating costs,
interest on the unamortized U.S. original investment, depreciation, and the net cost of the
Canal Zone Government. If, in any given year, the cash on hand exceeds the amount
required for working capital and foreseeable plant replacement or expansion, the excess is
required to be paid into the United States Treasury and applied to amortization of the
capital investment. When the Panama Canal Company was organized in 1951, the
unamortized U.S. investment which the Company established after audit by the General
Accounting Office and with the approval of the Bureau of the Budget was $373 million as
of July 1, 1951. The interest bearing investment, as of June 30, 1969, is approximately
$317 million.
Tolls Revenues by Type of Ship
Table II-2 shows transits and tolls for commercial ocean traffic by ship classification for
the period Fiscal Year 1946 through Fiscal Year 1969. General cargo ships include all cargo
ships constructed or modified to special Panama Canal rules. General cargo ships include all
cargo ships except the tankers and ore ships. Tankers are designed for liquid cargoes.
However, Panama Canal Company statistics normally do not distinguish tankers carrying
petroleum products from those carrying dry bulk grain.
The data for Fiscal Years 1968 and 1969 have been consolidated in Table II-2 for
comparison with the data of the preceding years. However, in Fiscal Year 1968 the Panama
Canal Company commenced subdividing what had been the General Cargo category into
several others, i.e., combination carriers, container cargo ships, dry bulk carriers, general
cargo ships, and refrigerated cargo ships. For study purposes these data have been rearranged
into the groupings indicated in Table II-3.
By 1968-1969 the number of commercial ocean traffic transits had increased about 3.5
times over those in 1946, and the tolls collected had increased about 5.5 times over those in
1946, reflecting the increase in average size of ships transited.
Table II-4 indicates that general cargo ships (including dry bulk carriers, combination
carriers, container cargo ships, and refrigerated cargo ships) have accounted for about 80 per
cent of canal transits and 75 per cent of tolls in recent years. Tanker transits have averaged
between 10 and 15 per cent; tanker tolls have ranged between 15 and 20 per cent. Ore and
passenger ships have declined percentage-wise in the post-war period in transits and tolls
paid. Further analysis of tolls revenue by type of ship is included in Chapter V, Potential
Revenue for Use of a Sea-Level Canal.
Traffic
Table I-1 portrays basic data on transits, cargo tonnage, and tolls and credits for
Panama Canal traffic from the opening of the canal through Fiscal Year 1969.
IV-12
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IV-13
TABLE II-3
PANAMA CANAL TRANSITS AND TOLLS BY TYPE OF SHIP,
COMMERCIAL OCEAN TRAFFIC, FY 1968 & 1969
Type of Vessel Transits
(Number)
FY 1968 FY 1969 FY 1968 FY 1969
Tank Ships 2,030 2,081 $14,847 $15,568
Dry Bulk Carriers 1,915 2,255 $22,328 $27,472
(Dry Bulk Carriers) (1,784) (2,125) (20,157) (25,103)
(Combination
Carriers) (114) (109) (1,956) (2,156)
(Ore Ships) (17) (21) (215) (213)
Freighters 9,036 8,612 $46,218 $44,004
(Container Cargo (55) (61) (365) (376)
Ships)
(General Cargo Ships) (6,847) (6,348) (37,584) (34,588)
(Passenger Ships) (308) (298) (2,889) (2,862)
(Refrigerated Cargo:
Ships) (1,826) (1,905) (5,380) (6,178)
Other 167 152 $ 411 $ 325
Naval Ships 51 50 S103 $ 89
GRAND TOTAL 13,199 13,150 $83,907 $87,458
SOURCE: Panama Canal Company Annual Reports, FY 1968 and FY 1969
Panama Canal traffic is subdivided into several categories for purposes of statistical
analysis. For an overview of the total cargo tonnage transiting the canal in any given year, as
well as numbers of transits and tolls, the following categories comprise the sum of the total:
Commercial ocean traffic — Includes ships of 300 net tons and over, Panama Canal
measurement, or of 500 displacement tons and over on vessels paying tolls on displacement
basis (dredges, warships, etc.).
U.S. Government ocean traffic — Same criteria as commercial ocean traffic except that
ships are owned by or operated under contract for the United States Government.
Free ocean traffic — Includes ships of the Colombian and Panamian Governments and
ships transiting for repairs at Panama Canal Company operated yards.
IV-14
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measurement (or under 500 displacement tons for vessels assessed on displacement tonnage).
Small U.S. Government traffic —Same measurement criteria as small commercial
traffic.
Small free traffic — Same measurement criteria as small commercial traffic.
Table II-! breaks out commercial ocean traffic which represents the greatest amount by
far of cargo tonnage that transits the Panama Canal. All other categories are included in the
total tonnage and tolls (except for free traffic) columns.
About 5 million long tons of cargo passed through the Panama Canal during the initial
year of operation. Landslides prevented operations through much of 1916 and limited
traffic to approximately 3 million long tons. Although cargo tonnage more than doubled in
1917 it remained relatively constant until the post-World War I recovery of the early 1920’s
after which steady growth occurred through 1929 to almost 31 million long tons.
World-wide depression affected growth adversely in the 1930’s and World War II reduced
the total cargo tonnage transited to 11 million long tons in 1943. Post-World War II
recovery has been relatively steady, reaching a record high of 108.8 million long tons of
cargo in 1969.
The limited wars in which the United States has been involved since World War II have
had an impact on Panama Canal traffic. The major impact of the Korean War is illustrated
by the considerable increase in total cargo tonnage in the early 1950’s and then a levelling
off in the mid-1950’s. This was due to the sharp rise in U.S. Government ocean traffic which
reached a peak in Fiscal Year 1953 and then dropped off to normal experience in 1955 and
1956. This overall effect on growth was only temporary, however; commercial cargo
tonnage continued to grow and made a great surge in 1956, causing a corresponding surge in
total cargo tonnage.
Logistical support of military operations in Southeast Asia has had a significant bearing
on the continued substantial growth of Panama Canal traffic in recent years. The Panama
Canal Company attributes the war in Vietnam as being a major factor in the increase in all
areas of canal traffic with the principal impact being on U.S. Government ocean traffic.
Commercial traffic is also considered to have been affected indirectly through increased U.S.
offshore expenditures which have given added economic impetus to other canal users,
principally Japan. The post-war situation in Vietnam will probably have a temporary effect
on growth of Panama Canal traffic comparable to that experienced after the Korean War.
Another development that has contributed to the recent surge in canal traffic is the
closure of the Suez Canal, which according to the Panama Canal Company has affected both
commercial and U.S. Government traffic. Principally affected have been vessels normally
plying the route from various eastern Europena, Mediterranean, and Black Sea ports to the
Far East which are now rerouting via the longer Panama Canal route. In addition, U.S.
Government vessels which previously transited Suez to Vietnam have now been added to the
Panama Canal traffic pattern.
Panama Canal trade is analyzed in detail in Chapter IV, Isthmian Canal Traffic Forecast.
Among the outstanding features of this trade have been the decline in United States
intercoastal trade and the remarkable increase in cargo movements (primarily from the East
Coast United States) to Japan, owing to continuous Japanese economic expansion from the
mid-1950’s to the present.
IV-16
Chapter III
REVIEW OF PREVIOUS PANAMA CANAL TRAFFIC STUDIES
Introduction
Certain traffic projections predated the decision to construct the Panama Canal, but the
weight of existing evidence suggests that the decision to build the canal resulted more from
a general recognition of political, economic, and military advantage to the United States as a
new world power than from any quantitative analysis. In designing the locks in the early
part of the Twentieth Century, the Panama Canal engineers attempted to provide ample
lock capacity for the largest ships that might ever be constructed. Several separate forecasts
of future traffic through the Panama Canal were prepared from 1912 through World War II.
Those that were made in the earlier part of this period could not foresee the significant drop
in Panama Canal traffic which resulted from the economic dislocation in Europe in the
1920’s and in the United States in the 1930’s. Those that spanned the period 1939-1945 did
not foresee — understandably so — the dramatic decrease in traffic during World War II.
Each traffic forecast was based on either disaggregation or aggregation as an economic
theory underlying the method of projection. The disaggregative technique involves an
approach which derives the sum-of-components by forecasting changes in each component.
Disaggregation is most appropriately used in forecasting when component data are available,
understandable, and changes in them predictable in logical and statistical terms. This is
characteristically found in short-range forecasts which emphasize the expected changes of
specific components. In terms of Panama Canal traffic forecasts, analysis has proven that
forecasts of changes in existing components become of decreasing reliability as the period of
forecast is extended. Perhaps the greatest disadvantage of this technique is the inability of
the projector to foresee the development of new components.
The aggregative technique, in contrast to disaggregation, forecasts the total by
examining the historical relationship of the total growth function and its components in a
time series sequence. This relationship, either linear or otherwise, is employed in a forecast
by projecting the total on the basis of its demonstrated pattern of growth to derive the
growth of its components. The economic implication here is grounded in an observation
that the overall growth of economic development has an influence of causation on
components of economic activity. Economists are often uncertain as to whether this
relationship is purely statistical in nature or more meaningful in a substantive way.
Nevertheless, the technique affords a means by which to project long-term growth rates in
aggregate growth functions in which there is no reliable basis for forecasting the growth
rates of individual components and in which the entrance and growth of new components
cannot be foreseen.
IV-17
Panama Canal Post — World War II Traffic Forecasts
The following presents a survey of previous canal traffic forecasts conducted
subsequent to World War II. These and a few earlier forecasts are shown in Figure III-1.
Isthmian Canal Studies — 1947
These studies comprised a comprehensive investigation by the Governor of the Panama
Canal of the means of increasing the capacity and security of the Panama Canal. They
included a traffic survey conducted under the direction of Dr. Roland L. Kramer of the
Wharton School of Finance and Commerce. The purpose was to forecast the volume of
commercial traffic through the Panama Canal annually for the period 1950-2000. The study
resulted in four traffic projections. Two were based on ecomomic-statistical projec-
tions — one relating the several segments of Panama Canal traffic to corresponding national
income estimates and the other drawn to reflect official estimates of United States
export-import trade. A third projection, a historic trend line, was based upon Panama Canal
experience during the period 1923-1936 and held petroleum traffic constant at the 1936
tonnage experience. A fourth projection was based upon an application of Panama Canal
traffic to the longer historic pattern of Suez Canal traffic. The four projections were
evaluated in the light of the following influences: commodity analyses; analysis of the
future trade of countries and areas served by the Panama Canal; and shipping company plans
for future use of the Panama Canal. The 1947 Panama Canal Commercial Traffic Survey
utilized an aggregative approach in projection.
The Kramer Study accepted the economic-statistical projection based on national
income estimates as a reasonable maximum forecast of commercial traffic, and trends based
on Panama and Suez Canal experience as the minimum amount of traffic likely to
materialize in the future. The economic-statistical projection based on an estimate of
export-import trade was considered optimistic.
The four projections varied considerably by the end of the time frame of the
forecast — the year 2000. They varied from a low forecast of 62 million tons to a high
forecast of 97.7 million tons by the year 2000. Subsequent history has proved that all the
projections fell considerably short of forecasting the increasing growth of canal traffic. The
highest estimate of commercial cargo tonnage for the year 2000 was exceeded in FY 1969.
Table III-1 depicts the degree of shortfall in the forecast.
Consideration was given to the matter of vessel transits although the study concentrated
on cargo tonnage. By the year 2000, average cargo per transit was projected at 6600 tons.
This produced a transit figure of 13,078 by the year 2000, utilizing the economic-statistical
estimate of 86,312,000 net tons of commercial ocean traffic. The estimated year 2000
forecast of 13,078 net tonnage type commercial ocean traffic transits was surpassed in FY
1968 when 13,199 of this type of transit occurred. The average commercial cargo per
ocean-going transit in FY 1969 amounted to 7,710 tons.
Certain assumptions were of significant importance to the study’s resulting low
estimates. The assumption which held petroleum traffic at the 1936 level, or at
approximately 4 million long tons, was in error. In FY 1969, petroleum movements
amounted to 17.6 million long tons. The impact of the world’s rapidly expanding
population on trade demand, and hence on canal traffic, was not considered. Productivity
increases and Japanese post-war economic recovery were not anticipated.
IV-18
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IV-19
TABLE III-1
COMPARISON OF TRAFFIC PROJECTIONS
(ISTHMIAN CANAL STUDIES — 1947)
WITH ACTUAL EXPERIENCE
Year 2000 Actual Commercial
Tonnage Ocean Traffic
Forecast Tonnage
Panama Canal Trend 62,000,000 63,669,738 (FY 1961)
(with Suez)
Panama Canal Trend 66,000,000 67,524,552 (FY 1962)
Economic-Statistical 86,312,000 96,550,165 (FY 1968)
Projection (based on
national income estimate)
Economic-Statistical 97,700,000 101,391,132 (FY 1969)
Projection (based on
export-import estimate)
Stanford Research Institute Studies Conducted for the Panama Canal Company
During the period 1958 through 1967 various studies were completed under contract
for the Panama Canal Company by the Stanford Research Institute. The first in the series of
studies, conducted in 1958, consisted of an analysis of future commercial ocean traffic
through the Panama Canal. The second in 1960 consisted essentially of an updating of the
1958 study in the light of the intervening years of experience. A third study effort was
conducted in 1964 in response to the need for a series of long-range projections of canal
traffic. The final traffic projection study, completed in 1967, was part of an overall tolls
sensitivity study. Although these studies were conducted within the short time span of nine
years, each succeeding study resulted in upward revision of the cargo projections contained
in the previous study. This was due to the inherent difficulty in making forecasts of this
nature and to basic flaws in at least the first three projections. The cargo projections
embodied in the first three study efforts have been too conservative. The Panama Canal
Company’s latest available statistics indicate that the fourth study has resulted in an overly
conservative forecast of cargo — at least for the first target year of the forecast period. The
four study efforts and a comparison with Panama Canal traffic experience are summarized
in the following pages.
An Analysis of Future Commercial Freight Traffic Through the Panama Canal
(Stanford Research Institute — 1958)
This Study formed part of the supporting documents for two larger canal studies: The
Bonner Report, prepared for the House of Representatives by the Board of Consultants,
IV-20
Isthmian Canal Studies, June 1, 1960, and the report of the Panama Canal Company
Isthmian Canal Plans — 1960. The methodology was disaggregative and an evaluation was
made of the future trends of the elements of the activity; the evaluations were then summed
for a projection of the total. This Study, like the 1947 Kramer Study, comprised a
projection of commercial ocean traffic, but not total canal traffic (which includes the
following Panama Canal Company categories: U.S. Government Ocean Traffic, Free Ocean
Traffic, and traffic under 300 net tons, Panama Canal measurement).
The methodology employed analyzed previous canal traffic data to determine changes
in cargo movements on the principal trade routes, and in the tonnage of important
commodities shipped through the canal. A detailed study of trade routes, individual traffic
components, and commodities was undertaken to analyze changes, and to estimate future
traffic. Capacity of basic vessel types used to carry specific cargoes was examined to
estimate the number of canal transits required to move the forecasted tonnage.
Subsequent history has proved that the projections were inaccurate on the low side.
The projections of commercial ocean traffic, as compared with Panama Canal actual
experience, are as follows:
Year 1975* Year 2000 Actual-FY 1969
Cargo Cargo
Tonnage Transit Tonnage Transit Cargo
Estimate Estimate Estimate Estimate Tonnage Transits
73,436,000 11,530 102,130,000 15,452 101,391,132 13,150
Long Tons Long Tons Long Tons
*The 1975 commercial ocean cargo tonnage projection was exceeded by FY 1965 when commercial ocean cargo tonnage
amounted to 76,573,071 long tons. The 1975 transit projection was surpassed in FY 1964 when 11,808 commercial
ocean transits were registered.
Basically, the disaggregative approach employed in the Study resulted in overly
conservative forecasts in both cargo tonnage and transits. A major deficiency in the forecast
was the fact that it overestimated the importance of ores and coal, and underestimated
quantities of petroleum and petroleum products, phosphates, grains (other than wheat), and
fishmeal. The failure to forecast the growth in petroleum and petroleum product traffic was
particularly significant. Total petroleum cargo tonnage was estimated at 6.25 million long
tons by 1975 and 6.9 million long tons by 2000. Actual petroleum cargo during FY 1969
amounted to 17,623,000 long tons.
The Addendum to an Analysis of Future Commercial Freight Traffic Through the
Panama Canal (Stanford Research Institute — 1960)
In 1960, the Panama Canal Company asked the Stanford Research Institute to review
its 1958 Study in the light of the intervening experience. A comprehensive revision was not
attempted, and attention was focused only on those developments since the 1958 report
which would suggest basic changes. The actual traffic, over the period FY 1958 through the
Third Quarter FY 1960, was compared with the predictions of the earlier study. Variations
were found both in the commodity tonnage movements and in the relation between the
IV-21
commodity tonnage and the general cargo vessel transits. The revisions were limited to the
nearer target date of 1975, with the projection of the earlier study for the year 2000
remaining unchanged. Commercial ocean traffic cargo tonnage for 1975 was raised from
73,436,000 long tons to 83,986,000 long tons. The transit projection for 1975 was
increased from 11,530 to 14,115, reflecting increases in ore and general cargo transits.
The revised projections were no more accurate than their predecessors. By FY 1967
(less than half the projected period), the tonnage total had been exceeded. While the transit
figure has not been equalled, this cannot be attributed to the accuracy of the projection, but
rather to an increase in average ship size beyond that utilized in the Study. The revision
repeated a major weakness of the earlier Study: overestimation of ore cargo and
underestimation of petroleum traffic.
Stanford Research Institute Report of 1964
This Study was prepared in response to the need for a series of long-range projections of
canal traffic. Forecasts were based on the disaggregative commodity approach; milestone
dates of 1980 and 2000 were selected. The overall methodology was similar to that
employed in the 1958 Study: commodity cargo was projected, and the number of transits
was derived by applying estimated ship capacity to the commodities. More commodity
groups were analyzed in detail in this Study. Although U.S. Government Ocean Traffic and
Free Ocean Traffic were added to this Study, only Commercial Ocean Traffic was projected
for the two target dates. Total commercial tonnage was estimated at 105,895,000 long tons
for 1980, and at 152,775,000 long tons for 2000. Commercial cargo transits were projected
to be 14,354 for 1980 and 18,263 for 2000.
The tonnage projections appear to be inaccurate — at least for the year 1980. Although
the Study projected only two target dates, an indication of how well the projections
compare with experience can be gained by comparing actual data since FY 1964 with values
for the Fiscal Years 1964 - 1969, inclusive, taken from the line connecting the values
predicted for 1980 and 2000, extended backward to FY 1964.
Comparison of Projections to Actual
Commercial Cargo (millions of long tons)
FY Projection Actual
1964 68 70.5
1965 71 76.6
1966 73 81.7
1967 75 86.2
1968 78 96.5
1969 82 101.4
The transit projections — at least for the near-range — appear to be much more
accurate. However, this results from both the underestimation of cargo tonnage and an
underestimation of average ship size.
Stanford Research Institute Analysis of Panama Canal Traffic and Revenue Potential —
1967
The final traffic projection study in the series of studies conducted by the Stanford
Research Institute was prepared in conjunction with a tolls sensitivity study conducted for
the Panama Canal Company. This summary relates to the traffic projection portion of the
Study. The time frame extended from 1967 to 1990 and resulted in projections of
Commercial Ocean Traffic for the target years of 1970, 1980, and 1990. Like its
predecessors, the Study followed the disaggregative commodity approach but embodied the
most comprehensive research project yet undertaken by the Stanford Research Institute.
Following completion of the 1964 estimates, it had become apparent that past projections
had not considered adequately “new†commodities or new movements of existing
commodities. The commodity-by-commodity approach had failed to consider changes and
innovations in commercial traffic; therefore, a “new commodity movements†category was
created.
Some eighteen categories or commodity groups were analyzed and totalled for the three
target years. The projected Commercial Ocean Traffic cargo tonnages are shown below:
Millions Long Tons
1970 1980 1990
94 113 140
The increases and decreases of each commodity group’s cargo tonnage at the estimated
target dates provide a view of the dynamics of projected tonnage growth. It also facilitates
the location of discrepancies which may develop in the future. Table III-2 covers each
commodity group for each target year and shows a comparison with actual experience in FY
1969.
It is already apparent that this Study has underestimated the growth of traffic through
the Panama Canal. The forecast of 93,985,000 long tons of commercial cargo in 1970 was
surpassed in FY 1968 with 96,550,165 long tons of this category of cargo and further
exceeded in FY 1969 with 101,391,132 tons. This is due primarily to the continued surge in
recent years of the growth of shipments of coal and coke from the East Coast of the United
States to Japan as well as the continued closure of the Suez Canal. A cursory examination of
Table III-2 reveals understandable variation between the 1970 projections of commodity
movements and FY 1969 experience. This only serves to illustrate the inherent pitfalls in
the disaggregative, commodity-by-commodity approach in making forecasts of traffic
movements. Economic history is replete with examples of failure to anticipate dynamic
forces and trends that have caused considerable alteration within the short span of a few
years of commodity movements in world trade. At the same time history has proven that
overall economic growth, including world trade, has continued at a fairly uniform rate. This
basic circumstance has characterized the history of the growth of Panama Canal traffic.
IV-23
TABLE III-2
COMMODITY PROJECTIONS (SRI-1967)
(000 Long Tons of Cargo)
Actual
Commodity 1969 1970 1980
Petroleum and Products 17,623 16,000 15,475 14,970
Coal and Coke 16,291 6,700 8,150 9,600
Iron Ore 3,054 8,200 8,850 9,500
Sugar 3,642 4,285 4,770 5.300
Bananas 1,254 1,500 2,300 3,000
Coarse Grains 4,927 4,900 7,000 9,800
Soy Beans 2,552 2,600 3,000 4,500
Lumber 4,951 4,100 4,150 4,300
Bauxite-Alumina F353 1,200 1,450 1,700
Phosphate Rock 4,755 3,500 3,500 4,000
Wheat 1,675 2,600 4,200 6,300
Scrap Metal ZO 2,500 2,000 1,500
Wood Pulp and Paper 2,622 2,000 3,400 5,900
Rice 875 800 1,300 1,800
Nitrogenous Products 3,455 2,800 3,000 3,500
Sulfur 369 900 1,200 1,800
General Cargo 29,320 27,000 30,000 35,000
New Commodity Movements — 2,400 9,100 17,000
TOTAL 101,391 93,985 112,845 139,470
Gardner Ackley Projection of Traffic Through the Panama Canal in Relation to Canal
Capacity — 1961
In 1961, Mr. Gardner Ackley, an economist serving at the time as a consultant to the
Secretary of the Army, prepared a memorandum for the Secretary in which he discussed
and illustrated several possible methods of projecting traffic through the Panama Canal and
then made some projections of his own in terms of future numbers of transits which he
considered to be conservative, minimum estimates. Mr. Ackley discussed and rejected the
“commodity-by-commodity, country-by-countryâ€â€™ approach that had been employed by the
IV-24
Stanford Research Institute in its 1958 Study. He felt that this approach was restricted by
concentration on traffic movements of current importance without proper consideration
being given to future growth possibilities, especially with respect to the economic growth of
aggregate production in the countries involved in such an analysis. Other approaches
discussed by Mr. Ackley included a straight-line projection of trend (based on an analysis of
Panama Canal traffic during the post-World War II era), and an econometric projection
(which uses economic theories about causative factors in economic growth, measures their
past influence by statistical methods, and assumes that factors demonstrating a stable
relationship in the past will continue to do so in the future).
Mr. Ackley estimated that there would be 17,000 transits in 1975 and 30,000 in the
year 2000. He regarded these as ““minimum safe planning figures†and felt that they were
definitely on the conservative side. He used the straight-line trend projection method based
on a constant incremental increase in absolute amounts of transits rather than a constant
percentage rate. He felt that use of a constant exponential growth rate applied to transits
would have resulted in “‘fantastic’â€â€™ numbers and would have ignored the offsetting effects of
larger average ship sizes in the future: His estimate of 30,000 transits in the year 2000 was
related to an estimate of optimum canal capacity of a like quantity of transits. This is higher
than current estimates of canal capacity without major modification. However, in the light
of Panama Canal transit experience since 1960 Gardner Ackley’s aggregative type estimates
of transits are quite realistic.
Conclusion
This summary of previous Panama Canal studies serves to illustrate the inherent
difficulties involved in estimating future demand for interoceanic commercial transportation
through an Isthmian canal, especially for any considerable period into the future. As
Gardner Ackley pointed out in his 1961 examination of this matter, “Panama Canal traffic
is an aggregate of intermediate scope. It is composed of many specific currents that may rise
and fall, and which are likely to be at least partially offsetting in their effects. On the other
hand, canal traffic is not merely a microcosm of total economic activity; it is dominated by
a relatively small number of important commodities, mostly the raw materials or products
of a few industries. Further, because it depends on economic developments in a number of
separate countries, many of which are in early and uncertain states of evolution into modern
economic organization, its projection is more difficult than that of an activity confined to a
single, already-developed economy whose future course is more predictable.â€
The traffic projections contained in previous studies, although resulting from intensive
research by competent individuals and organizations, failed to provide an accurate forecast
of the increasing growth of canal traffic for the reasons cited in this summary. They were
invariably low and overtaken by events within a relatively short span of time after the date
of the forecast. They were predicated, in large part, on the disaggregative, commodity
analysis approach and failed to provide allowance for the dynamic, unpredictable factors
that influence constant world economic growth and advances in international trade. The
forecasts applied to the existing lock canal only and were acceptable for short-term financial
planning by the Panama Canal Company. Analysis of the traffic projection results of these
studies demonstrates clearly the need for a different approach in estimating and planning
future capacity requirements and potential sea-level canal traffic.
IV-25
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Chapter IV
ISTHMIAN CANAL TRAFFIC FORECAST
Introduction
A long-range forecast of potential Isthmian canal traffic is needed for three purposes:
a. To predict the date at which the present Panama Canal cannot accommodate the
total number of ships requiring transit.
b. To determine the canal capacity that will be needed in the future, both in channel
dimensions and numbers of transits, if the future needs of world and United States
interoceanic freight transportation are to be met.
c. To estimate the tolls revenues that could be available over the long term to repay
investment in new capacity.
It is the consensus of those engaged in economic research that the reliability of
forecasts of economic activities decreases rapidly as their time span increases. Most canal
users invest in ships and other resources on the basis of forecast demands no more than
twenty years into the future. A new sea-level canal, however, could not be in operation for
fifteen years or thereabouts, and at least fifty more years should be available for its
amortization. As the present worth of future revenues beyond the year 2040 is not of great
significance to a current determination of the financial feasibility of a new canal, the
Commission directed the Shipping Study Group to develop estimates of potential canal
cargo tonnages, transits, and revenues for the period 1970 through 2040. The Commission
further directed that the Study Group forecast the range of future traffic possibilities with
the objective of establishing a reasonable planning goal for which capacity should be
provided. A potential tonnage forecast was developed which defines a transit range
dependent on ship cargo mix and maximum vessel size to be accommodated.
The quality of any forecast of economic growth depends on an understanding of the
factors of causality that operate to expand and constrain growth. As discussed in Chapter
III, most previous Panama Canal traffic forecasts utilized a technique of commodity
analysis, commonly called disaggregation, to determine causality; here, the growth-
maturation-stagnation cycle of each commodity is employed to develop a total of
commodity tonnage through the canal. While this type of forecasting technique is
undoubtedly useful for short-range planning purposes, it is of marginal value for estimating
Isthmian canal traffic for the next seventy years. Potential movements of individual
commodities are affected by many variables, and most are subject to changes that are
unpredictable for more than a very few years in advance. The history of the growth of
Panama Canal traffic to new peaks has been essentially that of the continued emergence and
rapid growth of new traffic patterns, while earlier components have, in the aggregate,
grown less rapidly. The influence of new commodity development (not accounted for in
IV-27
disaggregation) is increasingly important as the target forecast year is extended because
existing commodities generate proportionally less tonnage as they achieve the maturity
phase in the growth cycle. Thus, the experience of forecasting efforts to date has shown that
a commodity-by-commodity approach inevitably has downward bias and results in forecasts
that are conservative.
The converse of this approach, called aggregation, involves the projection of growth
trends of gross aggregates of economic activity usually along exponential lines. New
commodity development is implicitly included, but the resultant forecast may yield growth
patterns of skyrocketing proportions.
Panama Canal traffic growth is influenced both by the evolution of individual economic
cells, and by the general exponential trend reflected in world trade and economic expansion.
It is stimulated by economic growth, but also influenced by shifts in regional economic
maturity levels and the spacial and dynamic economic relationship of one region to another.
While a growth in regional Gross National Product (GNP) generates an increase in tonnage
exports that may transit the canal, an increase in per capita GNP (indicating an advance in
industrial maturity) encourages vertical and horizontal domestic economic integration and
tends to deemphasize the raw material extractive industries which reduces the incremental
growth in tonnage exports. Trade patterns that determine canal usage are specified by
economic and geographic interrelationships.
Methodology
In view of the foregoing basic considerations, the potential tonnage forecast to the year
2000 is predicated essentially on an aggregative approach with emphasis on the relationship
between interoceanic canal trade and economic development of the regional areas which
contribute to this trade. Beyond the year 2000, the potential tonnage forecast was projected
to the year 2040 by total aggregation, reducing the rate of growth existing at year 2000 to
zero growth at year 2040 in equal, yearly decrements over the forty years. The “bending
down†of the rate of growth in the Twenty-First Century resulted basically from inability to
forecast world trade from 30 to 70 years into the future; thus a conservative growth
estimate was assumed for this period. The potential tonnage forecast is the basic forecast of
this study.
The potential tonnage forecast for canal traffic is made in terms of projections of total
potential annual cargo tonnage. The next step in the overall process of projecting traffic is
to determine the sizes and distribution of ships that would transport the potential cargo
tonnage. For this purpose the world’s merchant fleet is divided into three general classes:
tankers, dry bulk carriers, and freighters. Each class of ship has a set of identifiable
operating characteristics in Isthmian canal trade, including size distribution. Projections of
the sizes, and size distribution of the world fleet are provided. The world fleet size
distribution is modified to reflect the size distribution experience of the present Panama
Canal and the constraints of the canal configuration under consideration, i.e., maximum
ship size accommodated. From the resulting Isthmian canal ship size distribution, the
projected average ship for each ship class is identified. The potential cargo tonnage is
assumed to be carried on these average ships for the purpose of computing numbers of
transits expected in the future. Plans for world-wide harbor and port development are
IV-28
examined in connection with the foregoing analysis of oceanborne and interoceanic canal
shipping trends.
The total potential annual cargo tonnage is apportioned among the three classes of
ships. The percentages assigned define the cargo mix, i.e., the per cent of total potential tons
carried by each ship type. The selected cargo mixes are based on recent Panama Canal
experience. The final factor to be considered is the relationship between cargo tonnage and
ship capacity (DWT). For this purpose, a ship efficiency index has been defined as the ratio
of cargo tons to deadweight tons. This index is a unique characteristic of each class of ship
in Isthmian canal trade, and inherently accounts for transits in ballast, partially laden ships,
and cargo density.
Using the factors of cargo mix, ship efficiency index, and average DWT, the total
potential annual cargo tonnage is translated into total annual transits required. The total
annual tonnage actually transited equals the potential tonnage until the transit capacity of
any canal option is reached. Thereafter, the tonnage increases very slowly, as only the
average size of ship increases and the number of annual transits remains essentially constant.
The revenues produced are computed from the annual tons transited and the average toll per
cargo ton. This calculation is carried out separately for each class of ship since each has
different average tolls per ton as computed from Panama Canal experience. (Canal tolls are
assessed on earning space, not cargo tons.)
The methodology for forecasting Isthmian canal traffic is explained further and
illustrated in subsequent portions of this Chapter and Chapter V, Potential Revenue for Use
of a Sea Level Canal, and described in detail in Appendix 1, Methodology for Computation
of Projected Canal Traffic and Revenues.
Economic Considerations
World and United States Economic Growth and Oceanborne Trade
Economic Growth and Oceanborne Trade
The annual rate of growth of the total world economy since 1948 has been
calculated by the United Nations to have been 4.4 percent in constant dollars. Data for
longer periods are less exact, but world economic growth appears to have stayed
consistently in the narrow range of 3 percent to 5 percent annually for the past 100 years.
The United Nations forecasts that world economic growth will continue in the future at the
4.4 percent rate as a minimum. United States economic growth is expected to increase at
approximately the same rate. Continued economic growth at these proportions will exert a
major influence on the continued growth of oceanborne trade and the Isthmian Canal
portion of this trade.
Table IV-1 shows the growth of world oceanborne trade by major geographic areas
from 1938 through 1966. Based on available data, the United Nations estimates that this
trade increased to approximately 1,860 million metric tons in 1967. In the same year, the
volume of U.S. oceanborne trade amounted to 387,568,000 long tons. Table IV-2
summarizes the dynamic structure of oceanborne trade by type of cargo for the period from
1937 to 1966.
During the period 1948-1967 world oceanborne cargo tonnages have grown at an
average annual rate of 7.2 percent and are forecast to continue at approximately the same
rate. From 1960 to 1967 the average annual growth rate of the main bulk commodities and
IV-29
TABLE IV-1
WORLD OCEANBORNE TRADE
(Goods Loaded (A) and Unloaded (B) in External Trade)
North South
America America Asia Europe Oceania
A BY ABA BD A BO ALS
Million Metric Tons
1938 470 108 81 5219 84 68
1948 490 160) 151, S829) 84. 50
1953 680 1G7 214 A21.29., 170) 93
1958 940 210 260 181 38 276 147
1959 990 210 288 196 38 298 148
1960 1,110 227 290 209 37 335 181
1961 1,180 239 288 209) 37), 365,215
1962 1,280 260 317 225 36 398 233
1963 1,380 286 326 229 35 427 258
1964 1,550 316 352 247 40 486 303
1965 1,670 321 378 263 42 527 341
1966° 1,790 335 389 262 46 582 378
‘Total tonnage loaded which, after adjustment for time lag, is approximately the same as the total tonnage
unloaded in any year.
21948 and 1953 estimates for U.S.S.R. are included with data for Europe.
Sprovisional.
SOURCE: United Nations Statistical Yearbook, 1967, New York, 1968, page 77
other dry cargo was 6.6 percent for the former and 6.1 percent for the latter. During the
same period the average annual rate of growth of petroleum loadings was 13.4 percent. The
trend toward a greater share for petroleum (tanker cargoes) in total world movements has
continued to rise rapidly. The share of petroleum comprised 21 percent of total oceanborne
tonnage in 1937, represented 5O percent in 1960 and rose to 56 percent in 1967.
A recent forecast of world oceanborne trade based on world trends and
expectations is projected in Figure [V-1. This forecast was based, in part, on a forecast made
IV-30
by the United Nations Conference on Trade and Development (UNCTAD) in a study of
world petroleum movements. It predicted a probable slackening in the world demand for
petroleum, hence a shift in tanker tonnage resulting in dry cargo again becoming the
dominant segment of oceanborne trade early in the Twenty-First Century.
The Panama Canal’s portion of total world oceanborne cargo movements each year
has remained remarkably consistent. Table [V-3 shows a comparison between Panama Canal
Total Ocean Traffic and world oceanborne trade for selected years 1938-1967. For the
period 1958-1967 it has varied less than one percentage point above or below 5.1 percent of
the world total.
The World Merchant Fleet
While the growth in the value and volume of world trade may be attributed to
many factors such as the rise in industrial production creating an almost insatiable demand
for raw materials, improvements in the means of transportation must also be considered
among the most important factors. Progress in transportation epitomizes the development
of the modern economy; the following considers the size and structure of the world’s
merchant marine since the vast majority of world trade is transported in oceanborne vessels.
TABLE IV-2
WORLD OCEANBORNE GOODS LOADED BY TYPE OF CARGO
1937 1958 1959 1960 1961 1962 1963 1964 1965 1966
Type of
Cargo Million Metric Tons
Ocean
Shipping!
Total 490 940 990 1 O M10 280 1-380) 1-550) 1k670) 19790
Tanker
Cargo?
Total
Dry
Cargo
Total
UNporaximate figure that includes data on international cargoes loaded at ports of the Great Lakes and St. Lawrence
system for unloading at ports of the same system and not included in the Tanker and Dry Cargo totals.
Crude petroleum and petroleum oils; includes crude petroleum imports into Netherlands Antilles and Trinidad and
Tobago for refinery and re-export.
SOURCE: United Nations Statistical Yearbook, 1967, New York, 1968, page 77
IV-31
Source: Litton Systems, Inc. Oceanborne Shipping Demand and
Technology Forecast-Part 1, Culver City, California,
June 1968, page 2-1.
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
1955 1965 1975 1985 1995 2005 2015 2025 2035 2045
YEARS
WORLD OCEANBORNE TRADE FORECAST
FIGURE IV-1
IV-32
TABLE IV-3
COMPARISON OF WORLD TONNAGE AND
PANAMA CANAL TONNAGE
SELECTED YEARS 1938-1967
Panama Canal
World Tonnage Total Ocean Traffic
(Million Metric Tons) (Million Long Tons)
1 ne
Provisional
SOURCE: United Nations Statistical Yearbook, 1967
Panama Canal Company Annual Reports
On December 31, 1968, the world’s merchant fleet of oceangoing ships, 1,000
gross tons and over, totaled 19,361 ships of 273.2 million deadweight tons. Table IV-4
depicts the growth of the world merchant fleet during the period 1949-1968. Total world
tonnage increased during this period approximately 164 percent. Table IV-5 shows the
twelve major maritime fleets, which accounted for more than 82 percent of the total
deadweight tonnage comprising the world fleet on December 31, 1968. Liberia ranked first
among the maritime nations of the world and 45.1 million deadweight tons registered under
her flag represented 16.5 percent of the world total. Norway and the United Kingdom
which ranked second and third represented 11.2 percent and 11 percent of the world’s
deadweight tonnage, respectively. Japan, the fourth leading maritime nation, represented
10.7 percent of the world’s carrying capacity. The United States, in fifth place, the only
IV-33
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IV-39
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TABLE IV-5
TWELVE MAJOR MARITIME FLEETS OF THE WORLD
December 31, 1968
(On the Basis of Deadweight Tonnage)
Gross Recent Trends
Number Deadweight in DWT Rank
1968 of
Rank Country Vessels Tons Tons 1967 1966 1965
(000) (000)
Liberia 1,613 26,984 45,141
Norway 1,308 19,231 30,593
United Kingdom 1,840 20,845 29,917
Japan 1,766 18,797 29,222
United States! 2,071 18,675 25,464
USSR 1,634 9,457 11,911
Greece 1,006 7,890 11,543
West Germany 909 6,399 9,320
Italy 620 6,266 8,686
Panama 623 5,165 8,009
France 485 5414 7,618
Sweden 408 4,660 6,945
All Other 5,078 34,459 48,841
OnN OF OWN —
1
2
3
4
5
6
7
8
=
—_—_= —
CO CONO) TINCT (CON
—_—=> —)d
P= OWMOON = OD BW
—_
P=2 WOON ONOW A =
ITthe privately owned United States Merchant Marine includes only 967 vessels totalling 10,649,000 gross tons
and 15,346,000 deadweight tons. The above figure reflects the Government-owned Reserve Fleet and those
vessels operated under general agency agreement, bareboat charter and in the custody of the Department of
Defense, State and Interior.
2source material limited.
A. Netherlands ranked twelfth in 1966, 1965 and 1964.
SOURCE: U.S. Department of Commerce, Maritime Administration
country among the major maritime nations to show an almost continuous decline in the last
two decades, represented only 5.6 percent.
Table IV-6 depicts the trend in deadweight percentage distribution of the world
fleet by vessel class during the period 1961-1968. It shows that the bulk carrier is the fastest
1 This figures includes only the U.S. privately-owned fleet. It excludes the National Defense Reserve Fleet which
comprised more than 8.3 million deadweight tons as of December 31, 1968. Other U.S. owned vessels under general
agency agreement, bareboat charter, or in the custody of the Department of Defense, State and Interior are also not
included in this figure.
IV-40
TABLE IV-6
DEADWEIGHT PERCENTAGE DISTRIBUTION OF THE
WORLD FLEET BY VESSEL CLASS
Year Total Combination Freighters § Dry Bulk Carriers Tankers
4
3
3
3
3
2
2
2
SOURCE: U.S. Department of Commerce, Maritime Administration
growing class of ship. In 1968 tankers and dry bulk carriers made up 65 percent of the
world fleet’s deadweight carrying capacity in comparison with the 1961 total of 46 per cent
for tankers and dry bulk carriers. Thus, there has been a dramatic structural change in the
deadweight tonnage distribution of the world fleet by vessel class.
Isthmian Canal Trade
The history of Panama Canal traffic has been described briefly in Chapter II. The
purpose of this section of the study is to present an analysis of the cargo portion of canal
traffic experience covering the period since World War II. The requirements for new
Isthmian canal capacity are based on projected increases in cargo tonnage that potentially
would transit the canal. Such projections are based not only on the future outlook but on
past experience in order to identify trends in the growth of cargo tonnage. ““Torinage
transited†is emphasized in measuring overall potential canal demand because it is a better
measure than “‘ships transited;†the latter criterion contains variations in size, capacity, and
loading. However, for canal design purposes, it is essential to estimate the number of transits
required to carry the potential cargo tonnage.
Panama Canal traffic can be subdivided into many categories for purposes of statistical
analysis. The two major categories of traffic are Commercial Ocean Traffic and U.S.
Government Ocean Traffic (ships owned by or operated under contract for the United
States Government). The remainder of the traffic (identified by the Panama Canal Company
as Free Ocean Traffic, Small Commercial Traffic, Small U.S. Government Traffic, and Small
Free Traffic) do not contribute significantly to the total. Commercial Ocean Traffic
represents the vast preponderance of cargo tonnage that transits the Panama Canal.
Commercial Ocean Traffic can be further subdivided and analyzed in several ways.
These include classification by type of vessel, commodities shipped through the canal, and
Iv-41
origins and destinations of cargo shipments. Petroleum shipments have represented the most
important single commodity shipments tonnage-wise for the last two decades.
Table IV-7 and Figure IV-2 depict Panama Canal cargo tonnage by category of traffic
since World War II. The tanker cargo tonnage is identified separately to reflect trends in
petroleum shipments. The remainder of the commercial ocean cargo tonnage was transited
mostly in dry-bulk carriers and freighters.
The Panama Canal cargo tonnage history was examined for major trends and rates of
growth. Analysis of canal statistics can produce varied results whether done by computer
least squares analysis or by visual fitting; contradictory and misleading results are possible if
the results are regarded as accurate to a fine degree. Table IV-8 is intended to be merely a
gross indicator of traffic growth during selected periods, based on common use growth
tables. It shows that the annual growth rate varies in accordance with the period selected for
analysis. More sophisticated types of statistical analysis of the identical periods shown in the
table will provide different results. Statistical data should be used, therefore, only in a
general or gross manner as one of many guides of what may happen in the future.
In this study the method of least squares was used to quantify the trend analysis, the
details of which are contained in Appendix 2, Analysis of Panama Canal Cargo Tonnage
History. For the period 1947 to 1969, the total cargo tonnage has increased at a nearly
uniform annual rate of approximately 6.5 per cent. The period 1964-1968 saw a significant
rise in this rate. Some of this increase was due to traffic generated by the Vietnam conflict,
some to the closure of the Suez Canal, and some to other factors. Considering only
commercial ocean tonnage (essentially total tonnage less U.S. Government ocean tonnage),
the apparent impact of Vietnam on the recent growth rate is reduced. However, due to
inability to quantify that portion of commercial ocean tonnage generated by hostilities in
Southeast Asia, the complete impact of Vietnam cannot be identified. The growth of
commercial ocean tanker tonnage has been declining in recent years. Finally, the trend in
the growth of trade with Japan demonstrates that this component is the current major
contributor to the growth of Panama Canal cargo tonnage.
Principal Trade Routes
Table IV-9 shows 13 major Panama Canal trade routes ranked according to the long
tons of commercial ocean cargo moving in both directions along these routes in Fiscal Year
1969. A comparison is made with the volume of commercial cargo movements along the
same routes for the period 1965-1968 and selected earlier fiscal years.
Table IV-9 shows that the greatest increase by far in cargo tonnage movements along
any single trade route is between the East Coast United States and Japan, increasing from
approximately one-half million long tons of cargo in 1947 to almost 33 million tons in
1969. The vast bulk of this cargo has originated in the United States, amounting to over
27.3 million tonsin 1969. In Fiscal Year 1969 the five principal commodities moving along
the East Coast United States to Japan route in order of importance were coal and coke,
phosphate, corn, scrap metal, and soybeans. The rapid growth in canal cargo shipments from
the United States and other origins to Japan has been coincident with and was caused
primarily by the tremendous expansion of the Japanese steel industry, which depends upon
imports of raw materials, particularly coal and iron ore. It is doubtful that Japanese
economic expansion can long continue at its phenomenal growth rate of recent years. There
IV-42
TABLE IV-7
PANAMA CANAL CARGO TONNAGE
BY MAJOR CATEGORY, 1947-1969
(000 Long Tons)
U.S. Govt. Tanker Commercial Ocean Total’
Ocean Cargo Cargo Less Tanker Cargo
2,109.2 19,561.3 22,688.4
2,297.2 21,820.6 25,664.2
2,267.5 23,037.7 27,/82.6
4,571.4 24,300.9 30,365.0
3,121.4 26,951.6 SilpZSil-5
3,802.9 29,807.6 36,902.9
5,005.0 31,090.3 41,203.4
4,632.1 34,463.0 41,882.4
6,368.6 34,277.7 41,548.0
7,165.5 377 953:5 46,331.9
5,879.6 43,822.6 50,659.1
6,956.4 41,168.4 48,982.0
9,155.0 41,998.0 52,329.0
10,450.3 48,807.9 60,401.7
12,410.1 51,259.6 65,216.6
12,693.4 54,831.2 69,063.5
13,377.2 48,869.9 63,877.2
14,247.2 56,302.9 72,168.7
16,680.4 59,892.7 78,922.9
17,904.1 63,799.4 85,323.5
18,851.4 67,342.0 92,998.0
17,941.7 78,608.5 105,538.3
18,328.1 83,063.0 108,793.1
Tincludes Free Ocean, Small Commercial, Small U.S. Government, and Small Free Traffic
SOURCE: Panama Canal Company Annual Reports
are also indications that the Japanese steel industry has taken effective steps to obtain
requisite raw materials from the Pacific Basin, particularly from Australia. While Japan
should continue to play an important role in Isthmian canal traffic for the foreseeable
future, it could exert less of a predominant influence on the overall growth rate than it has
in the past.
Cargo tonnage shipments along other trade routes involving Asia (primarily as a
destination rather than an origin) have also demonstrated a high rate of growth since World
War II. These include East Coast United States — Asia (less Japan) and West Indies — Asia.
IV-43
110
7.
100
90 GOVERNMENT CARGO
80
~
oO
CARGO IN MILLIONS OF TONS
2
o
50
40
Re,
SUR
30
CARGO TRENDS IN
PANAMA CANAL
NUN
TRAN
i
Y
20
45 50 55 1960 65
LI,
vo
l
QJ
im
Gy
)
Ue
‘|
[
ZZ
Lp
TK
70
"INCLUDES REMAINDER OF TOTAL TRAFFIC, i.e. ALL MINOR CATEGORIES
(FREE AND SMALL TRAFFIC)
SOURCE: PANAMA CANAL COMPANY ANNUAL REPORTS
FIGURE IV-2
IV-44
TABLE IV-8
GROWTH RATES, PANAMA CANAL TOTAL CARGO TONNAGE
Selected Years — Period 1915-1969
(000 Long Tons)
Long Number Annual Growth
Tons of Years Rate (percent)
1915 108,793
1915 30,782
1915 78,923
1920 30,164
1920 85,323
1929 11,593
1930 30,365
1930 78,923
1940 85,323
1940 108,793
1944 108,793
1947 108,793
1948 72,169
1948 85,323
1948 108,793
1949 108,793
Note: Computations based on Tables for Rates of Growth and Rates of Decline, U.S. Department of Agriculture,
June 1966.
*Computer least squares analysis results in a growth rate of approximately 6.5 percent.
The remarkable rise in cargo along the Europe-Asia route in 1968 and 1969 reflects a surge
in shipments of coal and iron ore to Japan.
Although canal traffic to Japan and the other Far East destinations has grown relatively
and absolutely, this has been accompanied by growth involving other regions and trade
routes. For example, the sharply rising traffic along the South American Intercoastal Route
reflects a considerable increase in petroleum movements from Venezuela to West Coast
South American ports. Cargo shipments from the West Indies to the West Coast United
States have increased significantly. For most of the period, the East Coast South
America — West Coast United States route showed gains but has declined in the last few
years because of a considerable drop in cargoes originating in West Coast United States
ports. A significant increase in Europe-Oceania trade between 1967 and 1968 is attributed
in part to closure of the Suez Canal. Except for a decline in traffic in FY 1968, the East
Coast USA — Oceania route has shown a healthy growth trend. United States Intercoastal,
East Coast United States — West Coast South America and Europe — West Coast South
IV-45
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IV-46
America show declining trends for the period. Detailed data on origins and destinations of
Commercial Ocean Traffic along all trade routes during the period Fiscal Years 1947 through
1969 are contained in Appendix 2, Analysis of Panama Canal Cargo Tonnage History.
As stated previously, the dynamic growth of Panama Canal traffic since World War II
can be attributed primarily to the continued emergence and rapid growth of new traffic
patterns. Certain spectacular events have acted as catalysts, however, in causing rapid
increases in canal traffic at certain times. In the decade 1950-1960 the Korean conflict, the
closure of the Suez Canal, and initiation of Japanese economic expansion fall in this
category. The decade was also characterized by a steadily rising volume of U.S. cargo, an
unusual increase in cargo movements to Europe, and an extraordinary increase in the
numbers and sizes of all classes of ships. In the decade 1960-1970 the continuation of
Japanese economic expansion, hostilities in Southeast Asia, and the second closure of the
Suez Canal are the most important single events contributing to the dramatic rise in canal
traffic.
Table IV-10 further illustrates the impact that Japanese economic expansion has had on
canal traffic since World War II. It provides a comparison of commercial cargo tonnage
shipments to Japan and other Asiatic designations with commercial shipments to all other
destinations. It shows that trade to the Far East, with particular emphasis on that destined
for Japan, has been growing at an extraordinary rate in the last two decades as compared to
traffic moving to non-Asiatic destinations. In 1969 cargo tonnage shipments to Asia
amounted to 38.8 percent of cargo tonnage moving to all destinations, with Japan alone
representing 33 per cent of the total. Of all commercial cargo tonnage shipped from the
Atlantic to the Pacific in 1969 (not shown in Table IV-10), Asia represented 60.9 per cent
of Pacific-bound cargo and Japan alone 51.8 per cent. Table IV-11 portrays cargo
movements to and from Japan as well as cargo tonnage traffic involving all other Asiatic
origins and destinations. The last column on Table IV-11 lists all other commercial cargo
tonnage moving through the Panama Canal. In 1969 shipments to and from Asia constituted
approximately 50 per cent of all commercial cargo tonnage shipped through the canal, while
shipments to and from Japan comprised 40.4 per cent of the total.
Effect of Military Operations on Panama Canal Traffic
Table IV-12 illustrates the effect of military operations in Southeast Asia on Panama
Canal traffic. It provides an overall summary of Panama Canal traffic for Fiscal Years
1964-1969, spanning the years of increasing Military Assistance Program support and
initiation and continuation of major hostilities. Vietnam has affected traffic directly and
indirectly. The direct impact is immediately noticeable in the sharp rise in U.S. Government
traffic which, pre-Vietnam, averaged something less than 300 transits and 1.4 million tons of
cargo annually. While sharply rising Government traffic directly reflects the heightened level
of involvement in Vietnam, increased ocean-going commercial traffic is also indirectly a
result of it. Offshore purchases by the Department of Defense, military personnel and U.S.
industrial spending in the Pacific basin have tended to stimulate the economies of a number
of countries that are important to the canal, principally Japan. In 1969, for the first time
since the initiation of large-scale hostilities, U.S. Government traffic showed an absolute
decline in transits and cargo tonnage. This reflects the decision of November 1, 1968 to halt
bombing targets in North Vietnam.
IV-47
TABLE IV-10
COMPARISON OF COMMERCIAL CARGO SHIPMENTS TO ASIA
WITH OTHER PANAMA CANAL TRAFFIC
FISCAL YEARS 1947 THROUGH 1969
(Cargo Long Tons x 108)
Destination of Commercial Cargo
Fiscal Total P.C. Commercial
Other? Total Total
Year Cargo Cargo
Japan! Asia Asia Non-Asia
Notes: 1. Specific data on shipments to Japan not available for Fiscal Year 1952-Fiscal Year 1955, incl.
2. Includes British East Indies, China, Formosa, Hong Kong, Indonesia, North Korea, Philippine Islands,
Russia, South Korea, South Vietnam, Thailand, and other unspecified destinations. Does not include
Pacific-Atlantic shipments to the Middle East, which are included in the ‘‘Total Non-Asia’’ column.
SOURCE: Panama Canal Company Annual Reports
IV-48
TABLE IV-11
COMPARISON OF COMMERCIAL CARGO SHIPMENTS TO
AND FROM ASIA WITH OTHER PANAMA CANAL TRAFFIC
FISCAL YEARS 1947 THROUGH 1969
(Cargo Long Tons x 10°)
Fiscal Total P.C. Commercial To & From’ To & From? To & From To & From
Year Cargo Cargo Japan Other Asia All Asia Non-Asia
NOTES: 1. Specific data on shipments to and from Japan not available for Fiscal Year 1952-Fiscal Year 1955, incl.
2. Includes British East Indies, China, Formosa, Hong Kong, Indonesia, North Korea, Philippine Islands,
Russia, South Korea, South Vietnam, Thailand, and other unspecified Asiatic origins and destinations.
Does not include origins and destinations in the Middle East, which are included in the ‘To & From
Non-Asia’’ column.
SOURCE: Panama Canal Company Annual Reports
IV-49
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IV-50
If peace negotiations lead to a termination of hostilities in Southeast Asia, the
immediate effect will be a lowering in demand for canal services generated by the conflict.
However, this is expected to have only a short-term effect on canal traffic growth. In this
connection, a brief examination of traffic experience during and after the Korean conflict is
in order. Table IV-13 contains traffic data spanning the period of conflict and the post-war
years. The major impact of the war is illustrated in the sharp rise in U.S. Government ocean
traffic (reaching a peak in Fiscal Year 1953) and then dropping off to normal experience for
this category of traffic in Fiscal Years 1955 and 1956. The overall effect of the cessation of
hostilities appears to have created a plateau of growth of total cargo tonnages from the end
of Fiscal Year 1953 through 1955, due to an absolute decrease in U.S. Government traffic
but a continuing growth in commercial ocean traffic. This effect was only temporary,
however; commercial cargo tonnage continued to grow and, in fact, made a great surge in
Fiscal Year 1956. The post-war situation in Vietnam could be similar.
Conclusion
In conclusion, the growth in Panama Canal traffic since World War II has resulted only
in part from orderly growth trends in individual components of traffic. It has been, to a
considerable extent, a growth brought about by surges in traffic, followed by periods of
consolidation of gains and accompanied by a marked increase in the size of ships. Current
trends portend continued growth in most aspects of canal traffic.
Views of Ship Operators and Oil Companies
As part of the examination of economic factors bearing on the feasibility of a sea-level
canal, the Commission and Study Group conducted a comprehensive survey of the views
and plans of shipping interests and oil companies as they relate to possible future use of an
interoceanic canal in the American Isthmus. The results of the survey were very
inconclusive. Most commercial interests base their planning on short and midrange forecasts
of future trends. In a highly volatile operation such as that engaged in by the petroleum
industry it is most difficult, if not impossible, to predict the long-range future.
Approximately 25 major U.S. shipping companies participated in the survey. About
one-half declined to make any definitive response on projected use of a sea-level canal (if
constructed and of adequate size) through the year 2000. Four companies indicated a
regular need for transiting cargoes, primarily of a dry bulk nature, in vessels of the 100,000
DWT type. Two foresaw a need for vessels of the 200,000 DWT type. Most of the shipping
companies surveyed indicated that a moderate increase in tolls for future sea-level canal
traffic would be acceptable. A substantial increase (e.g., 50 per cent) would result in serious
consideration of alternate routes.
Twenty major oil companies were queried on the need for constructing a sea-level canal
which would accommodate 250,000 DWT tankers. Of the 15 companies that provided a
response, 4 favored construction, 7 felt that the canal could not be justified on the basis of
projected petroleum movements, 3 had no opinion, while 1 foresaw the desirability of
moving large combination bulk/oil carriers through the canal. Some of the companies
pointed out the possibility of the economic attractiveness of a transisthmian pipeline (in
which the Government of Panama is interested) vis a vis a canal, unless the canal tolls rates
were competitive in nature. The companies interested in the recent oil developments on
IV-51
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IV-52
Alaska’s North Slope and in Colombia and Ecuador recognized the possible impact on
traditional oil transportation and distribution patterns. However, it is too early to reach
conclusions on the impact of these developments on interoceanic canal petroleum
movements.
Technological Developments
Growth in world trade will require a parallel growth in total world shipping capacity.
While air freight is expected to increase its potential share of high-valued and other non-bulk
cargoes in oceanborne trade, by far the largest part of transoceanic trade will move in ships.
Expected improvements in shipping efficiency will enable a better ratio of cargo moved per
ton of capacity, but the required world shipping capacity will increase considerably. Bulk
carriers will continue to grow in size but this growth will be subject to several constraints,
including port size and depth, ship handling, and cargo transfer facilities. Most non-bulk
commodities will move in unitized loads.
The principal alternatives to ocean transport for products currently moving through the
Panama Canal (other than ocean movement via The Cape of Good Hope or the Straits of
Magellan) are:
(1) Air movement.
(2) Rail movement between Pacific ports and Gulf or Atlantic ports combined
with ship movements on each coast (the landbridge concept.)
(3) Pipeline movement between the oceans or inland from coastal ports.
It is not possible to make a reliable long-term prediction of costs of these alternatives
relative to the costs of surface shipping via an Isthmian canal. However, the current state of
the art of technological forecasting suggests that cost reductions in the modes which
compete with oceanborne traffic will have only marginal effect on the total of potential
future canal tonnages. High value-to-weight-ratio products already move long distances most
economically by air. Larger and more efficient aircraft will continue to lower air freight
costs, and in the future a very large portion of manufactured products will move by air
rather than by surface transport. However, the efficiencies of ship movements of raw
materials, agricultural products, heavy manufactured goods and containerized goods are atso
increasing. Aircraft are not expected to be able to compete for most cargoes of this nature
during the remainder of this century. Movements by air will grow considerably but tonnages
moving by surface transport will continue to increase relatively unaffected by this trend.
The potential competition of rail transport between the oceans has existed throughout
the life of the present canal. The containership/landbridge concept is evolutionary rather
than revolutionary, and it is expected to have little ultimate effect on the growth of
tonnages through the Panama Canal. Only high value cargoes suitable for containerization
could move more economically by the landbridge, and its potential competitive position
would be vulnerable to increases in rail and port charges and decreases in ocean freight rates.
The potential for pipeline competition to the Panama Canal is not new. It has existed
throughout the growth of petroleum movements through the canal. In the future, pipelines
are expected to attract many new petroleum movements that would otherwise move
through an Isthmian canal in tankers. Although petroleum movements currently represent a
significant share of canal traffic, the tonnages involved are a very small portion of world
petroleum movements. The discovery of the new petroleum sources in Alaska and the
IV-53
western part of South America is not expected to cause drastic changes in the proportion of
petroleum tonnages in the totals that will move through an Isthmian canal in the future. The
petroleum industry is considering the merits of a transisthmian pipeline, and pipelines from
Alaska to the U.S. Far West and from the Pacific Coast to the U.S. Midwest, as well as use of
the Northwest Passage, are also under consideration.
Potential Cargo Tonnage Forecasts
The Shipping Study Group considered several alternative assumptions and methods for
forecasting future potential cargo tonnage, ultimately selecting the potential tonnage
forecast relating canal traffic to regional economic development and described in detail in
Appendix 3, Isthmian Canal Potential Tonnage Forecast, as the basic forecast for
interoceanic canal capacity and revenue planning purposes. However, a lower tonnage
forecast was developed under different assumptions and is presented for alternative revenue
planning purposes to demonstrate the magnitude of possible financial risk. Two other
projections which are considered are of use in that they further delineate the range of
possibilities which conceivably can be considered and also serve as points of comparison for
the potential tonnage forecast and low tonnage forecast. The other projections are termed
the high projection and the 54-year trend projection and are recorded with the potential
tonnage and low tonnage forecasts in Table I[V-14 and Figure IV-3.
High Projection
Panama Canal tonnage has grown exponentially at an average annual rate of
approximately 6.5% during the period 1947-1969. Projecting this exponential rate of
TABLE IV-14
FORECAST OF TOTAL POTENTIAL CARGO TONNAGE
FOR A TRANSISTHMIAN CANAL
(Millions of Long Tons of Cargo)
1970 1980 1990 2000 2010 2020 2030 2040
High Projection 111
Fifty-Four Year Trend
Projection 101
Potential Tonnage
Forecast ie
Low Tonnage Forecast 111
*Note: The potential tonnage forecast is based on analysis of 1950-1967 data and is projected forward from a best
fit curve which does not necessarily intersect any or all points established by actual returns. The 1970
forecast was actually 97,196,000 long tons of commercial ocean cargo plus 2,000,000 tons for government
cargo. For 1970, the figure of 111,000, 000 !ong tons of cargo for total potential cargo tonnage is used as a
most probable value for that year.
IV-54
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CRESS US
LOW TONNAGE FORECAST
PANAMA CANAL EXPERIENCE
HIGH PROJECTION
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2040
2020
2000
1980
1960
1940
1920
FISCAL YEAR
POTENTIAL CARGO TONNAGE
ISTHMIAN CANAL
FIGURE IV-3
IV-55
growth from a 1970 base of 111 million long tons produces a potential tonnage of 734
million long tons in the year 2000. Such a high growth rate assumes a constant relationship
of world economic growth to trade and a continuation of world economic growth at the
high rates of 1947-1969. World economic growth is expected to continue to increase 4.4%
annually to year 2000, and U.S. economic growth to equal about the same for this period.
This economic growth will result in even greater growth in world oceanborne trade. The
Study Group considers the projection of cargo seven-fold by the year 2000 to be extremely
optimistic. The catalytic influence of unique economic conditions prevailing after World
Was II (particularly in Japan) that spurred the growth of Panama Canal traffic during this
period is not expected to continue indefinitely. As this projection is extended to the year
2040, it results in a cargo tonnage estimate of 9 billion long tons. While such a projection
may fall within the realm of possibility, it is most unlikely that any such astronomical cargo
tonnage would ever materialize. Continued growth at the overall exponential rate
experienced over the past two decades would imply continuation of the historical pattern of
Japan trade and, parenthetically, would result in totals which would require several new
canals to accommodate.
Fifty-Four Year Trend Projection
This projection is based on a regression analysis of the commercial ocean tonnage
experience of the Panama Canal extending back to 1915. The tonnage points were tested by
the method of least squares for a curve giving the best fit through the computer program for
curve fitting developed by the Maritime Administration. Curves tested were linear,
parabolic, hyperbolic, second order polynomial, third order polynomial, and exponential. It
was found that the curve giving the best fit is a third order polynomial as recorded in Table
IV-14 and Figure IV-3. As a completely independent projection of the totally aggregative
type, its very close agreement with the potential tonnage forecast through the year 2000
reinforces the credence which can be given to the basic forecast.
Potential Tonnage Forecast
The potential tonnage forecast is based on an examination of the historical relationship
between time series growth of commercial cargo tonnage passing through the Panama Canal
and the Gross Product growth of the geographic regions that contributed to this traffic. This
aggregative type of approach, modified to the extent that specific regional components of
the world are evaluated rather than total aggregation at the world level, is a logical and
statistically reliable means of making the very long range forecast required by this study.
Aggregation at the world level would omit important developments in regional economic
evolution. On the other hand, further decentralization of the aggregative approach to the
national level would yield time series data characterized by perturbations unsuitable to the
statistical regression analysis employed in the forecast methodology. Straight-line projec-
tions of historical cargo tonnage growth, predicted on gross assumptions concerning future
growth, were considered to be inadequate even though results might approximate the
regional approach. A disaggregative approach, based on analysis of resource development,
markets, commodity movements involved in distribution patterns, and other specific
economic factors, was considered to be impractical for reasons that have already been
stressed in foregoing portions of this study. The possibility of combining a disaggregative
IV-56
approach involving detailed commodity analysis of specified regions along with an
aggregative approach with respect to the remainder of the regions was considered and
rejected. It was felt that this would unduly warp the total forecast by overemphasizing the
more predictable events that might be associated with the regions subjected to such an
analysis at the expense of the unpredictable events associated with the other regions.
The method employed to manipulate the data pertinent to the potential tonnage
forecast is the normal one employed in the aggregative technique, i.e., statistical regression
analysis. This measures the change in one or more variables involved in the dynamics of the
aggregation against the change in others to test the degree of correlation; the statistical
validity is measured by the correlation coefficient.
Fifteen geographic regions were identified, aggregating the total of nations that have
produced all Panama Canal commercial ocean tonnage. These regions are shown as follows
in order of importance with respect to volume of cargo by origin in Fiscal Year 1969: East
Coast United States, West Coast South America, East Coast South America, Japan, West
Indies, Europe, West Coast Canada, West Coast United States, Asia (less Japan), Oceania,
West Coast Central America/Mexico, East Coast Central America/Mexico, East Coast
Canada, Africa, and Asia (Middle East). Time series data for the period 1950 through 1967
were developed for each region consisting of the regional product, the per capita product
and tonnage exports through the canal. The data were manipulated in various ways to
obtain an acceptable degree of correlation for forecast purposes. The approach which
produced a high degree of correlation was that which related the gross product of each
region (the independent variable) to the cargo originating from that region for export
through the Panama Canal to a regional destination (the dependent variable). Thirteen of
the 15 regional models had correlation coefficients over .8; only one model (West Coast
United States) was inadequate. The observation of such a preponderance of valid statistical
relationships derived from a single independent variable is significant. The West Coast
United States model’s correlation coefficient could undoubtedly be improved by increasing
the complexity of the equation, but such an approach would conflict with the logic of the
forecast and would increase the likelihood of error in estimating the growth of the
independent variables.
Japan required special consideration because its phenomenal economic growth
subsequent to World War II has had a disproportionate effect upon the growth of Panama
Canal traffic. This dominant influence has been discussed in some detail in the Economic
Considerations section of Chapter IV. Table IV-15 further illustrates its impact on the
aggregate of all commercial shipments through the canal in the past two decades. The table
shows that shipments of commercial cargo to Japan increased from approximately 2 million
long tons in 1950 to 33.5 million tons in 1969, of which approximately four-fifths
originated on the East Coast of the United States. The table also indicates that shipments of
commercial cargo from Japan increased from a little more than 200,000 long tons in 1950
to 7.4 million tons in 1969, of which approximately three-fourths was enroute to the East
Coast of the United States.
This rapid growth in canal cargo shipments to Japan during the past ten years, from 8
million tons in 1959 to 33.5 million tons in 1969, has been coincident with and was caused
primarily by the tremendous expansion of the Japanese steel industry, which depends upon
imports of raw material, particularly coking coal, iron ore, and scrap metal. Approximately
IV-57
TABLE IV-15
ROLE OF JAPAN IN PANAMA CANAL TRAFFIC
FISCAL YEARS 1950 THROUGH 1969
(Millions of Long Tons of Cargo)
Fiscal Total Commercial los From* Total
Year Ocean Traffic Japan Japan Non-Japan
*Specific data on shipments to and from Japan not available for Fiscal Years 1952-1955, incl.
SOURCE: Panama Canal Company Annual Reports
15.7 million tons of coal were shipped through the Panama Canal to Asia in 1969, with the
vast bulk of this commodity moving from the East Coast United States to Japan. Other
important commodity movements to Japan tonnage-wise include grains of various types,
scrap metal, and phosphate rock. In more recent years the surge in shipments from Japan
has consisted primarily of manufacturers of iron and steel destined for the East Coast
United States.
The main thrust of Japanese economic progress during the past decade or so has been
achieved through intensive domestic investment (particularly in plant and equipment) to
exploit a rapidly expanding domestic market created through increases in real income and
low rate of population growth. Although the pattern is expected to continue for the short
range, eventual diminution in the surplus rural labor supply is expected to cause inflationary
IV-58
pressures. Additionally, the long-range prospects for real product growth must consider the
critical limitation of land. The historic advantages of technological advance will probably
not continue to propel the Japanese economic development along past lines of growth. It
was decided, therefore, to assume a gradually declining product growth rate for Japan to 5%
by the year 2000 which is reflective of such aforementioned institutional and economic
constraints expressed in performance levels exhibited by other mature island nations such as
Great Britain. This resulted in a lower figure of cargo tonnage generation from Japan.
Trade between Japan and the United States will continue to exert a dominant influence
on oceanborne trade and interoceanic canal traffic. The two nations are each the largest
overseas trading partner of the other but the balance of trade has shifted progressively and
dramatically in Japan’s favor. The United States had a trade surplus with Japan throughout
the post-war period through 1964. In 1965, the United States had a $376 million deficit
which expanded in 1969 to $1.4 billion. This trend will continue for the foreseeable future.
The factors leading to this reversal are complex but are related basically to Japanese
investment in key export industries, rapidly rising Japanese industrial productivity, and
concentration upon the United States as the major export market. At the same time, the
continued high rate of United States economic growth has stimulated imports and domestic
inflation has contributed to the steadily deteriorating ability of the United States to
compete in the world and Japanese markets.
The United States is by far Japan’s largest trading partner and furnishes historically
about 25% (1969: $3.5 billion) of Japan’s total import requirements. U.S. exports to Japan
follow a consistent pattern composed primarily of agricultural commodities, machinery and
transport equipment, chemicals and fuels. Certain regions of the United States, such as the
wheat producing areas of the Mid-West, rely heavily on exports to Japan. Although the
pattern of U.S. exports to Japan has been generally constant, important changes have taken
place in its composition. U.S. agricultural exports continue to loom large, for example, but
the products have changed. Our exports of raw cotton have declined in recent years, but
have been more than compensated by shipments of soybeans, feed grains and logs.
Although the two-way trade has continued to expand rapidly since 1964, Japan’s
exports to the United States have increased at a more rapid rate and reached $4.9 billion in
1969. Japan’s shipments to the United States consist primarily of finished goods, which
have shown a steadily growing diversity and a marked change in emphasis. Many of the more
traditional exports have declined and been replaced by iron and steel, automobiles and
electronic items. Further expansion in United States-Japan trade can be expected as U.S.
producers attempt to meet the needs of Japan’s expanding industrial and mass-consumption
society and Japan’s export industries, geared to the U.S. market, seek to utilize and expand
opportunities.
There are no current indications of diminishing growth of canal traffic to and from
Japan. In this connection, Australian Government officials predict that Japan’s steel
production and requirements for coal imports will continue to surge — at least for the near
range, and that Australia’s share of the Japanese coal import market will not impact against
the U.S. portion of the market. If this trend continues over the long range, and other
possible constraints on U.S. coal exports to Japan do not materialize, it will lend substantive
support to the potential cargo tonnage forecast — at least in an implied way as concerns the
aggregate forecast of tonnage from the U.S. East Coast (coal shipments to Japan being the
IV-59
most. significant commodity tonnage-wise). Even if Japan’s dependence on U.S. raw
materials (cooking coal and metal scrap) for expanding industrialization should diminish in
the future, there are other significant bulk commodities such as grains and phosphate rock
that have a potential for increasing volumes of shipments through a canal to Japan.
Using the correlations and forecasts of world and regional product available from U.S.
Government and United Nations sources, forecasts of commercial traffic available to a
transisthmian canal were made. The “‘best fit’? curve analysis of the 1950-1967 data
projected by the foregoing method resulted in a forecast of 355 million tons of potential
commercial canal traffic for the year 2000. The detailed forecast is shown in Table IV-16.
Total yearly traffic was obtained by adding 2 million long tons to the commercial traffic to
account for a peacetime level of U.S. Government use.
It is emphasized that a wide range of variations within some of the 15 regional
projections could be statistically and judgmentally supported. For example, the statistically
derived forecast of 58.6 million tons of cargo originating in West Coast South America
(Table A3-60), West Coast South America, Curve: 3) could be optimistic, especially if recent
discoveries of oil in Colombia and Equador do not result in significant oil shipments through
an interoceanic canal to the Atlantic Basin. On the other hand, the forecast of 3.5 million
tons of cargo originating in West Coast USA (Table A3-56, West Coast USA, Curve: 3) in
year 2000 could be pessimistic in view of the possibility that the recent discoveries of large
oil deposits on Alaska’s North Slope could result in major oil shipments through a canal on a
random basis. Therefore, the forecast pertaining to each regional component is not
presented as being categorically precise. However, each is presented as sufficiently sound in
concept that variations are just as likely to be above the projection as below it; hence, the
total of the forecast for the fifteen regions out to the year 2000 has as high a degree of
reliability as can be given any such long-range forecast.
From the year 2000 to 2040, a curve of uniformly declining rate (or slope) was
constructed such that at year 2040 the rate of increase is zero. The commercial ocean
tonnage derived for year 2040 is 776 million tons to which two million tons are added for
non-commercial cargo to give 778 million tons as the total tonnage. The “bending down†of
the rate of growth in this period resulted basically from inability to forecast world trends
from 30 to 70 years into the future. Many aspects of world development could have a
profound effect upon oceanborne trade. Populations, availability of natural resources,
industrial and agricultural development, technological innovations — all could have effects
which would maintain or diminish the rate of growth of potential canal tonnage existing at
year 2000. The results of alternative assumptions of uniformly declining rates of growth
between years 2000 and 2040 are shown in Figure IV-4. The mean curve diminishing to zero
percent rate of growth at 2040 was selected as a conservative growth estimate for the period
2000 to 2040. The potential tonnage which would pass through an interoceanic canal at
year 2040 is thus forecast to be about seven times that presently passing through the
Panama Canal.
A considerably lower forecast would not allow for the possibility of significant unusual
growth of commodity movements to and from regions other than Japan in an expanding
world economy. However, it should be pointed out that foreign markets now closed to
United States trade, such as Communist China, North Korea, North Vietnam, and Cuba,
could exert a positive influence on the growth of interoceanic canal traffic in the future.
IV-60
TABLE IV-16
POTENTIAL CARGO TONNAGE FORECAST!
(Millions of Long Tons of Cargo)
Region of Origin 19707 1980
Atlantic Basin
East Coast USA 32.5 53.5
East Coast Canada 1.2 2.0
East Coast Central America/ 1.0 Daal
Mexico
East Coast South America 10.1 15.6
West Indies 6.7 ors
Europe 4.6 6.8
Asia (Middle East) — 0.1
Africa 0.3 0.6
TOTALS 56.4 90.0
Pacific Basin
West Coast USA 6.1 5.6
West Coast Canada 5.8 8.3
West Coast Central America/ 1.9 3.5
Mexico
West Coast South America 15.4 24.1
Oceania 2.9 4.3
Japan 5.8 14.4
Asia (less Japan) 2.9 4.3
TOTALS 40.8 64.5
GRAND TOTALS 97.2? 154.5
NOTES: 1 Tonnages shown are for commercial cargo. For total cargo add 2 million tons to the Grand Totals for
each forecast year.
2See note for Table |V-14.
Other markets in the Pacific Basin, such as Taiwan and Southeast Asia, have potential for
exponential growth of canal traffic. The Australians mention interesting possibilities of
future interoceanic canal shipments of coal and iron ore to Europe. Again, it is axiomatic in
a long-range forecast of this nature that predictable events normally have a downward bias
while the unpredictable events and forces and trends result in substantial increases in
economic growth and world trade.
Further details of the forecast are contained in Appendix 3, Isthmian Canal Potential
Tonnage Forecast.
IV-61
MILLIONS OF LONG TONS OF CARGO
2000
1000
800
800
RN
700
i
XU
rie
=
fsa
ee
panes
eset he [ei 2 aN |
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600
500
400
300
200
150
eS yPiEeS jeiie il Nepean ESS
Eee
1980 1990 2000 2010 2020 2030 2040
FISCAL YEAR
POTENTIAL CARGO TONNAGE ISTHMIAN CANAL
ALTERNATE RATES OF GROWTH FOR YEARS 2000 - 2040
FIGURE |IV-4
IV-62
Low Tonnage Forecast
The low tonnage forecast of approximately 250 million tons of commercial ocean cargo
by the year 2000 is based on separate forecasts of Japan trade and all other commercial
cargo. The rationale for the forecast is derived from an analysis of Panama Canal cargo
tonnage movements between 1950 and 1969. The first premise of the rationale is that canal
tonnage to and from Japan grew at an exponential rate and will continue to do so at a
gradually declining rate until 1985, after which it declines rapidly and stabilizes at 100
million tons by 2010. The second premise is that all other commercial tonnage through the
Panama Canal grew at an arithmetic rate and will continue to do so up through the year
2040. In order to provide an allowance for unforeseeable trends, an additional 0.5% of the
total Japan and non-Japan commercial cargo is added yearly as a part of the forecast,
starting with 0.5% in 1971.
The low tonnage forecast assumes that all cargo movements to and from Japan will
increase from the 1969 level of 41 million tons to a maximum of 100 million tons in the
year 2010. While substantial absolute growth will be experienced for the short range, a
declining growth rate will result in approximately 90 million tons in the year 1985.
Thereafter, the rate slowly declines to zero growth in 2010. The trend of growth of
shipments to and from Japan is derived by the equation as follows:
Y=100= 10 +1og =! Wear 51972)
Coss)
where Y reflects millions of long tons
in any designated year.
The forecast does not make a distinction between Japan’s imports and exports in canal
trade. However, one of the underlying assumptions is that there are predictable limits to
Japan’s ability to expand its export trade, especially to the United States. The absolute
ceiling on interoceanic canal shipments originating in Japan would probably fall in the realm
of 35 million tons by the year 2000. The major commodity being shipped from Japan
would continue to be manufactures of iron and steel destined primarily for ports in the
East Coast United States, East Coast Latin America, and Europe.
Another basic consideration underlying the low tonnage forecast is the assumption that
the growth of shipments to Japan will level off towards the end of the century, achieving a
probable ceiling of about 65 million tons per year from then on. This gives recognition to
the fact that the rapid growth in canal cargo shipments to Japan was caused primarily by
raw material requirements for the Japanese steel industry (coal, iron ore, and metal scrap).
Japan has not had access to Asiatic mainland sources of raw materials since World War II
and has had to draw upon sources in the Atlantic Basin to satisfy the burgeoning demand. In
recent years, however, the Japanese steel industry has taken effective steps to obtain raw
materials from the Pacific Basin, particularly from Australia and West Coast Canada.
Long-term contracts have been entered into for iron ore from mines under development in
Western Australia and for the opening up of mines and shipment to Japan of coal from
Queensland. It is the policy of Japanese industralists to diversify the sources of supply of
IV-63
their raw materials as widely as possible. It is possible, therefore, that the Japanese steel
industry will reduce its dependence upon sources of raw materials that have required
shipment through the Panama Canal from Atlantic ports.
The second major element of the low tonnage forecast pertains to all commercial cargo
shipments exclusive of tonnage movements to and from Japan. The projection of this
segment of canal traffic, which is based on a statistical analysis (using a least squares
arithmetic fit) of such shipments during the period 1950-1969, amounts to approximately
118 million long tons of cargo in the year 2000. As mentioned previously, it discounts the
possibility of any unusual growth of trade along specified routes other than those involving
Japan.
The statistical rationale for this portion of the forecast is as follows. The growth of
commercial cargo shipments through the Panama Canal to and from all regions other than
Japan is well defined by the following linear relationship, determined by least squares
analysis:
Y = 24.1 + 1.85 (Year — 1949)
where Y reflects millions of long tons in any designated year. The validity of this equation is
shown by the close agreement between the totals in Table IV-17 for successive five-year
periods.
TABLE IV-17
COMMERCIAL TRAFFIC EXCLUSIVE OF JAPAN TRADE
(Millions of Long Tons)
Computed by Equation
Five-Year Period Actual Y = 24.1 + 1.85 (Year - 1949)
1950 - 1954
1955 - 1959
1960 - 1964
1965 - 1969
TOTALS
Extrapolation of this growth at the same arithmetic rate results in approximately 118
million tons as the probable amount of commercial cargo through an Isthmian Canal in the
year 2000 that would neither originate in nor be destined for Japan. Continued projection
to the year 2040 amounts to approximately 193 million tons for this component of canal
traffic.
IV-64
The remaining element of the low tonnage forecast of commercial cargo comprises the
cargo tonnage category that provides an allowance for unforeseeable trends. This amounts
to approximately 33 million tons of commercial cargo in the year 2000 and 103 million
tons in the year 2040.
Non-commercial traffic is projected at approximately 2% of commerical cargo under
normal conditions (i.e., no major hostilities such as Southeast Asia).
The summary of the low tonnage forecast is depicted in Table IV-18. A more detailed
summary is contained in Table A3-67 in Appendix 3.
TABLE IV-18
LOW FORECAST OF CARGO TONNAGE FOR A TRANSISTHMIAN CANAL
(Millions of Long Tons of Cargo)
Fiscal Year
1990 2000 2010 2020 2030 2040
Category
1970
1980
Commercial Cargo
to and from Japan 41.5 79.7 95.5 99.2 100.0 100.0 100.0 100.0
Non-Japan Commer-
cial Cargo 63.0 81.5 100.0 118.5 137.0 155.5 174.0 192.5
Unforeseeable
Commercial
Cargo Trends — 8.1 196 326 47.5 63.9 82.2 102.5
Non-Commercial
Cargo 7.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
TOTAL ALL CARGO 111.5 171.3 218.1 254.3 289.5 325.4 363.2 403.0
The low tonnage forecast is considered to be unduly restrictive for long-term canal
capacity planning purposes. While it has validity for conservative, alternative revenue
planning purposes, it is offered as a less reasonable expectation of future interoceanic canal
traffic than the potential cargo tonnage forecast. It should be noted that the growth trends
of the low tonnage forecast approximate those of the potential tonnage forecast to the
mid-1980s, (See Tables A3-3 and A3-67 in Appendix 3). The tonnage totals for each are
about the same for the year 1985. Beyond this point the growth rate for the low forecast
declines rapidly while gradually declining exponential growth characterizes the rate of
growth of the potential tonnage forecast. This further illustrates the difficulty of making
long-range forecasts with any assurance of precision. Broad assumptions must be relied upon
as the forecast period is extended, and differing assumptions produce widely differing
results.
IV-65
Shipping Trends
Harbor and Port Development
The economies of scale of the superships in the transport of dry and liquid bulk cargoes
are such that the provision of terminal facilities for them near the sources and destinations
of such cargoes is inevitable. The next phase of the worldwide evolution of ocean transport
is expected to be the modernization of port and harbor facilities, the construction of
offshore terminals, and the deepening of waterways to accommodate larger carriers. This
trend is already evident and pressures are mounting in the United States for greater
participation in port development. A detailed discussion of U.S. and foreign port
development activities is given in Appendix 4, Harbor and Port Development.
Europe already has more than a dozen ports which can accommodate ships of 100,000
DWT. The one at Ireland’s Bantry Bay handles tankers of 326,000 DWT and Rotterdam will
soon have accommodations near this size. Japan is already using 150,000 DWT dry bulk
carriers and is planning terminals for 300,000 DWT tankers. Canada is building for 150,000
DWT coal carriers at Vancouver and is planning deep draft ports on her Atlantic coast.
Australia, Brazil, and many other maritime nations have deep ports in various stages of
development. The United States at present has only three ports in which a vessel of 100,000
DWT size can be fully loaded at berth. These are the petroleum berths at Los Angeles and
Long Beach and a grain berth at Seattle. However, plans are in various stages of development
for deep ports or off-shore terminal facilities in Maine, Delaware Bay, New Jersey, Maryland,
Virginia, and Louisiana. The accommodations envisioned range from 100,000 DWT up to
250,000 DWT. United States port authorities and ship operators have recognized that the
United States is at a competitive disadvantage in exporting and importing bulk commodities
and are moving to close the gap. Although most existing U.S. ports cannot be economically
deepened to accommodate superships, it appears certain that regional ports or off-shore
deep water terminals wiil be developed along all three U.S. Coasts in the coming years.
Projected Ship Sizes and Distribution for the World Merchant Fleet
As a fundamental step in the development of projections of potential canal traffic and
tolls, it was necessary to forecast the sizes of ships in the world fleet and their distribution
through the year 2040. Because of the extended nature of the forecast, mathematical
projections of past and present ship size and ship population trends were developed and
used to make the forecast. The projections were constrained where practical limitations of
draft with respect to the trade were considered unlikely to change.
Using data obtained from Maritime Administration statistical summaries of the world
merchant fleets and from classification society registers, values of yearly average and
maximum sizes of freighters, bulk carriers, and tankers were determined and plotted. Curves
of average and maximum sizes versus time were then determined by the method of least
squares and projected to the year 2040. Separate curves showing the distribution of tonnage
in the world fleet from 1956 through 1964 were constructed and a base distribution was
fixed from the year 1960. Subsequent projections of distributions were made through the
use of the ratio of the projected average to the projected maximum size, in comparison with
the ratio existing in 1960.
The physical constraints considered in the projections of maximum sizes are as follows:
for freighters, a limiting draft of 40 ft. for harbor access in conjunction with the high
IV-66
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IV-69
An offshore loading facility ten miles off the coast of Kuwait
IV-70
volume of shipboard cargo space required for low-density cargo resulted in an estimated
practical limit of 50,000 DWT; for tankers, a loaded draft limitation of approximately 100
ft. coupled with problems of adequate maximum size of 1,000,000 DWT: bulk carriers were
considered to require access to mainland terminals for loading and unloading and were
therefore load draft limited to approximately 70 ft., with a resultant maximum tonnage
constraint of approximately 400,000 DWT.
It should be noted that the projection of both the average and maximum sizes are
basically extensions of a best-fit smooth curve of past experience. Inasmuch as this
approximates continuing zig-zag type patterns of growth in the past, it can be expected that
short-term spurts of growth and subsequent slow-downs will also occur in the future and
will depart periodically from the projected curves. However, on a long-term basis, it is
expected that the projections will be reasonably accurate forecasts of general trends.
Tables IV-19, IV-20, and IV-21 show projected ship size distribution from 1970
through 2040 for tankers, bulk carriers, and freighters, respectively. Figures IV-5, IV-6, and
IV-7 show the approximate dimensions of tankers, bulk carriers, and freighters, respectively,
resulting from the deadweight tonnage figures listed in the ship size distribution tables.
Projected Ship Sizes and Distribution for Interoceanic Canal Traffic
The sizes and distribution of commercial vessels that will use a future sea-level Isthmian
canal will be determined by its physical capacity, tolls, and the availability of economic,
alternate routes and methods of transportation. Experience in the existing Panama Canal,
the Suez Canal, and other canals world-wide has been that the largest ships that can safely
use these canals do so. In the Panama Canal, the size of transiting freighters and dry bulk
carriers has averaged substantially higher than the average of distribution in the world fleet
below the 65,000 DWT maximum size that can transit the canal. The average size tanker is
smaller.
Prior to Fiscal Year 1968, the Panama Canal commercial ocean traffic experience was
recorded under four ship types — tankers, ore ships, passenger ships, and general cargo ships.
Beginning in Fiscal Year 1968, the ship classes were further subdivided to report separately
combination carriers, container cargo ships, dry bulk carriers, and refrigerated cargo ships in
addition to ore, passenger, general cargo, and tank ships. These subdivisions allowed
identification for the first time of the role of the three general ship classes established by the
Maritime Administration for Tables IV-19 to IV-21 and used in this study — freighters, dry
bulk carriers, and tankers. All traffic other than commercial ocean traffic identified by these
three ship classes has been included in the freighter class. On the average this other traffic
has the same operating characteristics as do the commercial ocean freighters (i.e., similar
efficiency, average DWT, and average toll per ton of cargo). The analysis of cargo mix, ship
efficiency and average toll per ton is thus largely based on Fiscal Year 1968 and the first
half of Fiscal Year 1969 Panama Canal experience. The results of the 1968-1969 analysis for
these four variables are given in Table IV-22. For the purposes of comparison, the records of
commercial ocean traffic were examined for two ship classes, general cargo ships and
tankers. The results are presented in Table IV-23.
Cargo Mix
The cargo mix is the percentages of the total annual cargo tonnage carried by each of
the three general ship classes — freighters, dry bulk carriers, and tankers. The recent history
IV-71
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BEAM (FEET)
260
220
180
140
100
DEPTH AND DRAFT (FEET)
140
120
100
80
60
40
1500
1400
LENGTH (FEET)
1300
EAE
Pat et EATS
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U.S. DEPARTMENT OF COMMERCE
MARITIME ADMINISTRATION
OFFICE OF SHIP CONSTRUCTION
1100
1000
©
oO
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Pi Rat PSS
800
700
600
lee tel Popes
Bee Pere eas
500
0 200 400 600 800 1000
DWT ( x 1000)
TANKER CHARACTERISTICS
FIGURE IV-5
IV-75
500
400
300
DWT (x 1000)
U.S. DEPARTMENT OF COMMERCE
DRY BULK CARRIER CHARACTERISTICS
MARITIME ADMINISTRATION
OFFICE OF SHIP CONSTRUCTION
200
100
So o So oO o
- Oo N — oO oD co ~ © w +
(1944) L4VYGO 8 HidaG (13354) HLON31
Sg 2 Pyles Sake &
(1334) Wv39
FIGURE IV-6
IV-76
DEPTH & DRAFT (FEET)
BEAM (FEET)
LENGTH (FEET)
90
80
60
40
20
140
130
120
110
U.S. DEPARTMENT OF COMMERCE
MARITIME ADMINISTRATION
OFFICE OF SHIP CONSTRUCTION
100
90
1100
1000
900
eZee
700
x eee
60
DWT (x 1000)
FREIGHTER CHARACTERISTICS
FIGURE IV-7
IV-77
TABLE IV-22
PANAMA CANAL EXPERIENCE FY 1968 AND FIRST HALF FY 1969
FY 1969 18 Months
Cargo Mix (%) FY 1968 (First Half) Average
Freighters 47 46
Bulkers 36 37
Tankers 17 es,
Efficiency (Cargo Tons/DWT)
Freighters
Bulkers
Tankers
Average DWT
Freighters
Bulkers
Tankers
Average Toll per Ton
Freighters
Bulkers
Tankers
All Ships
NOTES: Bulkers are the dry bulk, combination dry bulk and ore ships included in commercial ocean traffic.
Tankers are the tank ships included in commercial ocean traffic. Freighters are the general cargo,
passenger, refrigerator, and container ships included in commercial ocean traffic, plus all other
Panama Canal traffic not considered as bulkers and tankers.
of Panama Canal commercial ocean traffic cargo mix is plotted on Figure IV-8. The tanker
tonnage has shown a slow growth to a high of 22 per cent of the total transited in
1965-1967 with a nineteen year average of 17 per cent. The 1968-69 average of 17 percent
has been selected for the projection of tanker cargo mix, and is assumed to remain constant
throughout the period of the forecast. Figure IV-8 also shows the steady large role of the
general cargo ship class until the dry bulker-freighter classification was first made in 1968.
Two possible cargo mix projections were examined. The “46 per cent Freighter Mixâ€
assumes that current trends of the mix will continue throughout the future period. This is
illustrated in Figure IV-9. The “25 per cent Freighter Mix†shown in Figure IV-10 assumes a
decline in the share of tonnage carried in freighters and a corresponding increase in that
carried in bulkers. Assignment of an increase to tankers need not be considered since such
an increase makes no significant difference in the end result of transits and revenues. The
two cargo mix projections are recorded in Table Al-4. The implications of the 46 per cent
mix is a relatively large number of total transits as compared to the 25 per cent mix.
IV-78
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IV-79
PERCENT OF TONNAGE
PERCENT OF TONNAGE
FREIGHT-
ERS
GENERAL
TANKERS
1950 1955 1960 1970
CARGO MIX — PANAMA CANAL
FIGURE IV-8
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1970 2000 2020 2040
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10
80
40
20
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1970 2000 2020 2040
CARGO MIX 25% FREIGHTERS
FIGURE 1IV-10
IV-80
Ship Efficiency
A ship efficiency was assigned to each ship class by defining an index as the ratio of
total annual cargo tonnage to total annual deadweight tonnage transited. Since DWT
transited is not readily available for the Panama Canal, the Panama Canal Ton (PCT) was
related to a deadweight ton (DWT) from a listing of 1966 Panama Canal traffic by ship
name, type, PCT and DWT. The data are plotted in Figure Al-6. The relationship of
PCT/DWT obtained showed that 1 PCT = 2 DWT for all major ship classes. (Exceptions:
Passenger ships, 1 PCT = .6 DWT; container ships, 1 PCT = 1.1 DWT.)
Using the foregoing relationships for PCT/DWT and current Panama Canal records of
PCT and total cargo tonnage, the ship efficiencies listed in Tables [V-22 and IV-23 were
computed. The general cargo ship efficiency remained quite stable during the period
1951-1967 and an average of .51. The tanker efficiency varied between .4 and .6 as the
relative number of ballast transits changed, with an average value of .53 for 1961-69.
Although the past eighteen months average (.49) is below the nineteen year average, it is
well within the range of past fluctuation, and has been assumed to prevail for the future
projections. For freighters and dry bulkers, the last eighteen months averages were also used
— .41 for freighters and .71 for bulkers. The long-term stability of the general cargo ship
classification gives confidence to these values.
Average DWT for a Sea-Level Canal
Maritime Administration world fleet size distribution projections for each of the three
types of ships are plotted in Figures Al-7, Al-8, and Al-9. The world fleet average ship size
is projected to grow along line WF. The current average Panama Canal ship for each ship
type is indicated at level a-a. These average sizes were obtained from 1968-69 Panama Canal
data and recorded in Table IV-22. Figures Al-10, Al-11, and Al-12 expand the portion of
the previous figures in the range of the average canal ship. Again, WF — World Fleet Average
Ship and a~a is the present Panama Canal average. The growth of the average sea-level canal
ship is indicated on the figures and is recorded in Table IV-24.
In the case of freighters, the present average canal freighter falls in the 33rd percentile
of the world fleet distribution. This relationship is assumed to continue and the growth of
the average freighter size in a sea-level canal will be along a-b, Figure Al-10. The maximum
size limitations of the Panama Canal and any sea-level canal are not expected to restrain this
growth.
The present average Panama Canal bulker is in the 16th percentile of the world bulker
fleet size distribution. It was assumed that the average size of the bulker would grow along
the 16th percentile line of that part of the world fleet smaller than the design ship (i.e.,
65,000 DWT for the present canal, up to 250,000 DWT for the largest canal). Thus, the
growth of the average size bulker which would pass through a sea-level canal is expected to
be modified by the maximum size ship that can be accommodated by the canal. With the
present lock canal size limit of 65,000 DWT, the bulker average size will grow along the line
a-f, Figure Al-11. This growth is less than that for a larger canal, such as 250,000 DWT
maximum ship case shown at a-b.
This same effect on growth is seen for tankers in Figure Al-12. However, in this case
the present average canal tanker is in the 65th percentile. Since it is expected that the future
average canal tanker will at least approach the median of that part of the world tanker fleet
IV-81
which can pass through the various canal options, the percentile in which the average canal
tanker is placed was changed from 65 per cent in 1970, to 60 percent in 1980, 55 per cent
in 1990, and to 50 percent in 200 and thereafter.
Average Toll Per Ton of Cargo
Tables I[V-22 and IV-23 record the average toll per ton of cargo for each of the three
types of ships from Panama Canal experience. The average toll for the canal as a whole is
obtained by weighting the individual averages by the cargo mix percentage. Table IV-25
gives the results of these computations for the two cargo mixes considered.
Transit Projections for All Canal Options for Capacity and Revenue Planning
The computations of the transit requirements for capacity and revenue planning
purposes were carried out for the potential cargo tonnage forecast contained in Table IV-14,
using the two cargo mixes contained in Table Al-4. For each combination of tonnage
projection and cargo mix, the cargo was assumed to be carried on ships whose size was less
than a given maximum ship size. This maximum size was successively established at 65,000,
100,000, 150,000, 200,000, and 250,000 DWT. The 65,000 DWT limit corresponds to the
present Panama Canal. A 26,800 annual transit capacity was used for this case. For the
remaining maximum ship sizes no transit capacity limitation was applied. Table IV-26
records the transit requirements for the various cases examined in connection with the
potential tonnage forecast. These data are plotted in Figure IV-11. The top of each band is
for the 65,000 DWT maximum ship size, and the bottom of the band is the 250,000 DWT
case, with the remaining cases falling within the band.
Transit requirements were also computed for the low tonnage forecast contained in
Table IV-14 for comparison purposes. However, it is emphasized that the low tonnage
forecast is presented primarily to illustrate the possibility of lower revenues and to be used
for an analysis in depth of the financial feasibility of a sea-level canal rather than for
capacity planning purposes. Transit requirements for the low tonnage forecast are recorded
in Table IV-26 and plotted with dotted lines in Figure IV-11. The low tonnage forecast
assumes, among other factors, that a great volume of dry bulk cargoes in the higher
potential tonnage forecast will not move through an interoceanic canal. Therefore, only the
46% freighter cargo mix is considered for purposes of transit requirements.
The following observations can be made concerning these data:
a. The maximum ship size to be accommodated makes relatively little difference in
the numbers of transits required.
b. The present Panama Canal transit capacity of 26,800 annual transits is reached
between 1989 and 2000 for all cases considered in connection with the potential tonnage
forecast; in the case of the low tonnage forecast it is not reached until about the year 1997.
c. The cargo mix has a considerable effect on transit requirements.
Potential revenue projections related to the transit projections are discussed in Chapter
V, Potential Revenue for use of a Sea-Level Canal. The detailed development of the
foregoing transit projections and the associated revenue projections are contained in
Appendix 1, Methodology for Computation of Projected Canal Traffic and Revenues.
It should be noted that the tonnage and traffic projections of the Potential Tonnage
Forecast from years 2000 to 2040 are based on a rate of growth which is assumed to decline
IV-82
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IV-84
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FISCAL YEARS
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POTENTIAL
TONNAGE FORECAST
46% Freighter Cargo Mix
25% Freighter Cargo Mix
LOW
TONNAGE FORECAST
46% Freighter Cargo
Mix Only
KEY:
=== = Potential Tonnage Forec’t.
=== = Low Tonnage Forecast
ISTHMIAN CANAL TRANSIT PROJECTIONS
FIGURE IV-11
IV-85
uniformly to zero at year 2020. The maximum number of potential transits at year 2040
under this assumption is calculated to be close to 68,000. If the rate of growth were
assumed to decline uniformly to two percent at year 2040, the maximum number of
potential transits at year 2040 would then be calculated to be approximately 101,400. The
maximum possible demand for transits at year 2040 is therefore considered to be
approximately 100,000 transits per year.
IV-86
Chapter V
POTENTIAL REVENUE FOR USE OF A
SEA-LEVEL CANAL
Introduction and Summary
This chapter estimates the revenue potential of a sea-level canal and evaluates the tolls
system required to obtain various levels of revenue. However, no recommendation is made
as to the most appropriate level of tolls or tolls system.
The estimates of potential revenues in this chapter are provided for determination of
the financial feasibility of a sea-level canal. Financial feasibility is established if the
projected level of revenue is greater than the cost of rendering the service. The findings are
therefore not directly relevant to the much broader economic question of the value to the
U.S. and the world that might be created by the construction of a new canal.
An estimate of the potential revenue based on the existing Panama Canal tolls rates can
be made with a reasonable degree of confidence. However, attempting to estimate maximum
revenue is a very different and complex matter involving three independent considerations:
(1) the projected level of traffic; (2) the opportunity to increase the levels of tolls; and (3)
the tolls structure.
The opportunity to increase levels of tolls depends upon the financial attractiveness of
alternatives to the use of a sea-level canal — the sensitivity of traffic to tolls changes.
Although a sea-level canal would be a unique economic undertaking, it would not be a
monopoly but would compete with various alternatives. In this chapter these alternatives are
evaluated and conclusions are drawn as to their effects upon the ability of a sea-level canal
to achieve higher levels of revenue.
In evaluating the alternatives that could compete with a sea-level canal, it was assumed
that the existing Panama Canal would either be closed or operated in conjunction with the
sea-level canal under a single management. Obviously, if the existing Panama Canal were
allowed to compete with the sea-level canal, it could significantly reduce the revenue
potential of the sea-level canal.
Tolls systems for use by a sea-level canal vary in their ability to reflect both the costs of
rendering canal service and the financial benefits accruing to the users. Accordingly, the
level of potential revenue which could be collected is significantly affected by the choice of
possible tolls systems. Traditionally, ships transiting the Panama Canal have been assessed
charges based on their internal cubic cargo capacity. The relevance of the current tolls
system to a sea-level canal is discussed in this chapter. In addition, alternate tolls structures
are identified for possible application and their advantages and disadvantages are evaluated.
This chapter considers only the revenue potential of a sea-level canal. The economic
consequences to the users of tolls increases, changes in the structure of tolls, and other
IV-87
factors related to a new sea-level canal are only briefly considered. Obviously, tolls rates and
structure changes may have detrimental effects on the users and the economics of the
nations served by the Canal. However, there would also be important benefits to many
users, even at higher tolls, in a canal of greater capacity than that of the present canal in
both the number of transits and size of ships that can be accommodated.
As a result of the studies which are discussed in this chapter the following conclusions
have been reached:
1. The traffic level forecast in Chapter IV is not likely to be achieved with a new canal
limited to ships of 100,000 DWT or less. It is most likely to be achieved by a canal with a
capacity to transit ships of 200,000 DWT or larger.
2. The availability of financially attractive alternatives to a canal increases as a
homogenous segment of traffic, in terms of a commodity, origin or destination, grows in
size. Accordingly, in a general sense the revenue potential of a single huge commodity
movement is significantly less than an equal aggregate of several movements.
3. Tolls rates could be increased by an average of approximately 50% in current
dollars by selective increases of varying amounts under a new tolls system designed to
maximize revenues without markedly affecting traffic growth. Such a system would produce
approximately 40% greater revenues.
4. In addition to the potential for increase in current dollars, average tolls could be
increased ata rate to approximate the average inflation of the costs of canal alternatives
with little impact on the volume of traffic.
5. The variations in tolls sensitivities among commodities, ship sizes, and routes would
require modification of the present Panama Canal tolls system to attract all potential traffic
to a new sea-level canal.
6. A marginal pricing system for structuring tolls would produce the maximum
revenues for a sea-level canal.
Revenue Forecasts
Relationship of Traffic Composition and Revenue Potential
The traffic forecast presented in Chapter IV is by region in which it originates. For
purposes of determining revenue potential, it lacks two important details: type of
commodity and destination of traffic.
The attractiveness of certain alternatives, with particular application to alternative ship
size and pipelines as discussed subsequently, varies significantly by commodity and by
origin-destination of commodity movements. It is apparent that crude oil, coal and iron ore
have the least revenue potential. In addition, the revenue potential of a sea-level canal would
be less if future traffic would have disproportionate growth with respect to origins and
destinations wherein the canal would have only a marginal advantage in terms of savings in
days. Finally, the opportunity to use alternatives such as huge ships and pipelines varies
considerably by the size of the movement. A single homogenous movement of a commodity
from one source to one destination has more opportunity to avoid the canal and thus less
revenue potential than a similar aggregate quantity of several movements. The present
movement of U.S. coal to Japan represents a type of traffic which would offer less revenue
potential.
IV-88
Without details regarding the composition of future traffic, it is more difficult to make
judgments of revenue potential. However, it is reasonable to assume that as the level of
traffic increases, the proportionate revenue yield decreases. Accordingly, the 25% freighter
mix revenue forecast (the lower revenues associated with the potential cargo tonnage
forecast) presented in the following sub-section, entitled “Estimates of Revenue Potential,â€
becomes more appropriate as the forecast grows in size. In addition, as the traffic forecast
for a given point in time is increased, the revenue yield for the incremental traffic is
disproportionately lower. These assumptions are reasonable because the larger the total
traffic the greater the probability that it includes huge movements of the type that can most
easily divert a sea-level canal. The greatest revenue potential would be produced from traffic
consisting of a variety of commodities with many combinations of origins and destinations.
Under this assumption, each combination of commodity, origin and destination should
account for a minor portion (perhaps less than 5%) of the total traffic.
Estimates of Revenue Potential
Estimate Based on Potential Cargo Tonnage Forecast
The basis for the basic revenue forecast is the potential cargo tonnage forecast
presented in Chapter IV. These long tons of cargo were extended by the average tolls yield
per ton to arrive at the total forecast revenues. The revenue forecast assumes a new canal
with a capacity to transit at least a 200,000 DWT ship.
The revenue forecast is made for two levels of tolls rates applying different tolls
systems: (1) existing Panama Canal tolls rates and system of assessing charges or a
modification thereof; and (2) estimated maximum rates in current dollars by applying a
marginal pricing system. For each level of tolls, two ship cargo mixes were assumed as
previously discussed in Chapter IV: (1) present Panama Canal mix of 46% freighters, 37%
bulkers, and 17% tankers; and (2) possible future mix of 25% freighters, 58% bulkers, and
17% tankers. The effect of using two ship cargo mixes is to produce a probable range of
revenues resulting from ship mix including composition of traffic as previously discussed.
For the existing Panama Canal tolls system and rates, one approach to tolls yield
per ton of cargo would be to use the overall averages for the Panama Canal in recent years.
Table V-1 presents these data for fiscal years starting with 1952. It should be noted that the
yield is fairly constant during recent years reaching a low for commercial cargo of $.773 per
ton of cargo in 1957 and a high of $.906 in 1963. The variation can be ascribed to two
principal factors: (1) ratio of ballast to laden ships, and (2) extent to which ships are laden
on weight basis.
Rather than using an overall average tolls yield per long ton of cargo, it was
considered more reasonable to develop a yield rate by type of ship. This produces a range of
revenue forecasts as it may be affected by ship mix. Such information is only available for
FY 1968 onward and is presented in Table Al-1. The yield rate of bulkers is the lowest
since these ships usually transit fully laden with cargo and have relatively few ballast
transits. The yield for tankers is higher due principally to their higher ratio of ballast transits
to laden transits. Although the tanker when laden with cargo is usually fully laden and is a
very efficient ship for the carriage of liquids, it is an inflexible type of ship which requires a
ballast return voyage. Freighters produce the highest yield per ton of cargo. Although
IV-89
TABLE V-1
AVERAGE PANAMA CANAL TOLLS PER LONG TON
OF CARGO TRANSITED
FY 1952 — FY 1969
Fiscal Year Tolls Per Long Ton of Cargo
All Cargo Commercial Cargo Only
SOURCE: Panama Canal Company Annual Reports
freighters have the lowest ratio of ballast to laden transits, they carry bulky light cargos and
are often not fully laden, thus producing the higher toll yield per weight ton of cargo.
Applying the toll yield per long ton of cargo shown in Table A1-1 to the traffic
forecast for the two ship mixes results in the revenues shown by the two curves for the
potential tonnage forecast in Figure V-1. The lower or 25% freighter mix estimate not only
reflects the possible influence of ship mix on revenues but also the possibility that lower
tolls charges will be necessary to attract traffic that has financially attractive alternatives to
the use of a canal.
IV-90
The estimated maximum revenue is based on the ability to increase average rates by
50% while only decreasing the volume of traffic in the long term by 10% and is shown in
Figure V-2. The extent of traffic loss is a function of the tolls system. Obviously a toll
should not be set higher than the benefit to a ship of using the canal or the ship will not
transit. However, as maximum tolls potential is approached there are practical limitations in
the design of a tolls structure. It is reasonable to assume that some traffic will be lost, and
10% was considered as an appropriate estimate when a 50% increase in tolls was projected
for two ship mixes.
In a similar manner to the existing level of tolls, a range of aggregate revenues is
presented at maximum rates. This is necessary since few details are available as to the nature
of the traffic forecast. The potential for revenues from traffic is dependent on its
alternatives to the use of the canal. As discussed subsequently, the attractiveness of such
alternatives varies significantly with ship routing, ship size, and type of cargo. Such details
cannot be forecast so far into the future with any confidence. Therefore, the alternative to
the use of a canal can only be evaluated in a range of probabilities.
Estimate Based on Low Projection of Cargo Tonnage
The basis for the lower revenue forecast is the low forecast of cargo tonnage
presented in Chapter IV. Although the potential tonnage revenues shown in Figures V-1 and
V-2 are offered as the more reasonable expectations, the lower revenues are shown to
demonstrate the magnitude of possible financial risk. The methodology employed in arriving
at the lower revenue estimate, which is also shown in Figures V-1 and V-2, is essentially the
same as that associated with the potential cargo tonnage forecast. However, the lower cargo
tonnage forecast on which it is based assumes, among other factors, that a great volume of
dry bulk cargoes in the higher potential tonnage forecast will not move through an
interoceanic canal. Therefore, only the 46% freighter cargo mix is considered for purposes
of the lower revenue estimation.
Tolls Sensitivity
Synopsis
In one sense an Isthmian canal has an absolute monopoly on a service for ships that
must pass between the Atlantic and Pacific oceans by the shortest route. However, an
Isthmian canal competes with many other means of achieving the same economic result.
This competition consists not only of alternative ship routing and larger ships, but also
competing modes of transportation and alternate sources and markets. The term “tolls
sensitivityâ€â€™ is used herein to describe the potential to increase tolls before the traffic is lost.
(This is known to economists as “‘price elasticity.â€â€™)
The question often asked in evaluating the value of the existing Panama Canal is, “How
much would it cost a ship to go around South America?â€â€™ This question assumes that the
decision to transit the Panama Canal is not made until the ship reaches the approaches of
the Canal and that the only alternative is around South America. Quite obviously, before a
ship leaves its port the decision on the route to be followed is determined based on the costs
involved, including Panama Canal tolls. Possibly less apparent but more important is that the
cost of tolls is considered before a ship is built, a contract to sell is signed, banana trees are
planted, or iron ore mines developed.
IV-91
MILLIONS OF DOLLARS
800
700
600
500
400
300
200
100
1970 1980 1990 2000 2010 2020 2030 2040
FISCAL YEARS
“Assumes a canal with no limitations on number of transits and with capacity to transit ships up to 200,000 DWT.
POTENTIAL ANNUAL REVENUES*
BASED ON CURRENT PANAMA CANAL RATES
FIGURE V-1
IV-92
MILLIONS OF DOLLARS
1000
900
800
700
600
500
400
300
200
100
1970 1980 1990 2000 2010 2020 2030 2040
FISCAL YEARS
*Assumes a canal with no limitation on number of transits and with capacity to transit ships up to 200,000 DWT.
POTENTIAL ANNUAL REVENUES*
BASED ON MAXIMUM REVENUES POTENTIAL APPLYING NEW TOLLS SYSTEM
FIGURE V-2
IV-93
The alternatives to the use of a sea-level canal place an upper limit on the canal’s ability
to charge for its services. An evaluation of these alternatives is made subsequently in this
chapter. The following is a brief description of the alternatives:
1. Alternative Ship Routing: This is the most obvious way to avoid use of a canal. Its
attractiveness varies by route. For example, ships originating on the West Coast of Panama
destined for the East Coast of the United States have little opportunity for rerouting. In
contrast, ships originating in the Philippine Islands destined for the East Coast of the United
States gain only a marginal advantage by using an Isthmian canal and consequently could
easily be rerouted.
2. Alternative Ship Size: The economies of scale may make alternate ship routing
more attractive with increases in ship size. With the present Panama Canal limited to ships of
about 65,000 DWT, alternate routing with ships double that size can be economically
attractive. However, the economies of scale of ship size tend to level off beyond 200,000
DWT; thus, depending upon the capacity of the sea-level canal, this alternative may have
limited application.
3. General Shipping Services: Shippers operating general cargo ships on scheduled
routes cannot usually select alternative routes or use superships economically. However,
they can minimize the payment of tolls by other means. For example, traffic originating in
the United States Midwest can either go to the United States East Coast or West Coast by
other transportation means for ocean transportation service to Asia. In response to tolls
increases, traffic moving to the United States East Coast could be diverted to the United
States West Coast.
4. Alternative Transportation Modes: There are several alternative transportation
modes which can substitute for canal service. These include a trans-Isthmian pipeline, super
aircraft, and rail service.
5. Alternative Sources and Markets: In order for traffic to transit an Isthmian canal, it
requires that the seller be on one side of the canal and the buyer on the other. There are
commodities where a rearrangement of buyers and sellers could be made to reduce the use
of the canal. For example, Peruvian and Chilean iron ore sold in Europe now transits the
Panama Canal. Europe could obtain more of its iron ore from sources on the East Coast of
Canada and Brazil with a corresponding reduction in canal transits.
6. Alternative Development: Raw materials are the dominant traffic through the canal
in terms of volume. Some of these commodities are available in several places in the world
and development of a source involves the evaluation of all costs including tolls. In response
to tolls increases developers could choose sources that eliminate the need for using an
Isthmian canal.
During its history the Panama Canal has had a fairly dramatic example of a loss of
traffic due to a competing alternative. During the early years of the Panama Canal, U.S.
intercoastal cargo represented approximately 55% of the total commercial tonnage
transiting the canal. United States railroads have effectively competed for this traffic and in
Fiscal Year 1969 it comprised only 3.8 per cent of Panama Canal commercial cargo. (Alaska
and Hawaii are included in data for West Coast U.S.)
There are various contradicting but ostensibly valid arguments as to why present
Panama Canal tolls are either insignificant or significant in an economic decision. Arguments
which maintain that Panama Canal tolls are insignificant include:
IV-94
1. Tolls represent a very minor portion of the selling price of commodities. To
illustrate: For a ship carrying automobiles the toll is approximately $7 per automobile or
only .35 per cent of a selling price of $2,000.
2. Tolls are only a small percentage of transportation costs and the minimization of
transportation costs may not result in maximum profit to a user. To illustrate: The
development of crude oil involves enormous investment in exploration and development
costs. These are sunk costs which the developer hopes to recover through the sale of crude
oil. Obtaining the crude oil after development is complete almost literally involves the mere
turning of a valve; thus, an oil company may willingly pay large transportation costs
including tolls if a sale can be made.
3. Tolls rates in dollars have remained basically unchanged since the canal opened in
1914. Since that date, there has been significant inflation which effectively has reduced the
tolls in terms of real dollars.
Arguments indicating that present tolls rates are significant include:
1. For low value commodities, the tolls represent a significant percentage of the
delivered cost. To illustrate: For crude oil selling for $10 a ton Panama Canal tolls are
approximately $.70 a ton, representing 7% of the delivered cost.
2. Tolls represent a significant amount of a ship’s operating cost, and the percentage
increases as the ship size increases. To illustrate, for foreign flag ships operating between the
East Coast of the United States and Japan, which is the most important route in volume of
cargo moving through the Panama Canal, the following comparison is made for bulk carriers.
Operating Cost*
Total One Way
Daily Voyage Amount % of Cost
$ 90,000 $11,000
120,000 20,000
150,000 40,000
*|Includes cost of capital investment and all other costs except tolls. The 100,000 DWT is included since it could use a new
sea-level canal; however, it cannot transit the present canal.
The arguments regarding the significance or insignificance of Panama Canal tolls do not
place them in proper perspective. In the long run, the willingness of a user of a canal to pay
tolls will depend almost solely upon the cost of alternatives. Minimization of any cost can
substantially increase a canal user’s profit. Accordingly, each will take tolls into
consideration as one factor in his decision. The availability of alternatives to the use of the
canal varies significantly not only among commodities but also among shipping companies,
shippers, and combinations of buyers and sellers. The issues are so complex that only
generalizations can be made at present, let alone making extrapolations into the distant
future.
IV-95
The discussion below examines in detail previous studies of Panama Canal tolls
sensitivity and the alternatives to the use of a canal based on the economics of known
technologies. In summary, the studies of the various alternatives to the use of a canal as they
relate to the revenue potential of a canal indicate the following:
1. Alternate Ship Routing: This alternative is not a significant factor either in
maintaining existing Panama Canal tolls rates or in increasing rates by 100% or more for
ships up to 50,000 DWT and by 25% for larger ships.
2. Alternate Ship Size: The significance of this alternative varies with the ship size
capacity of the new canal. If a sea-level canal is limited to 100,000 DWT ships a significant
portion of potential future commodity movements would probably move in larger ships on
alternative routes. A canal which could accommodate ships of 200,000 DWT or larger would
be needed to attract the potential cargo tonnage forecast in Chapter IV at the present
average tolls levels. However, this may require selective decreases in tolls for the large ships
using the canal through either a new tolls system or modification of the existing Panama
Canal system.
3. Petroleum Pipeline: This is an attractive alternative for large movements of crude oil.
Substantial tolls decreases may be necessary to retain large crude oil movements if they develop.
4. Slurry Pipeline: This is an attractive alternative for solids such as iron ore, which
can be economically moved in slurry form. Tolls decreases may be necessary to attract large
new movements of such solids if they develop in the future.
5. Land Bridge and Railroads: Availability of this alternative does not preclude canal
tolls increases of 100% or more.
6. Aircraft: Availability of this alternative does not preclude canal tolls increases of
100% or more.
7. Non-transportation Alternatives: It is not possible to measure the limitations on
tolls created by such alternatives as developing new sources and markets that would
eliminate or limit use of a sea-level canal.
It appears probable that the present Panama Canal tolls rates could be increased as
much as 50% on an average basis without markedly affecting projected traffic growth. This
would require application of a tolls system which permitted selective increases and decreases
with rates for some categories of cargo possibly increasing 150%. Inevitably, some loss of
potential traffic would occur. This loss should not exceed 10%. Accordingly, a 50% increase
in rates would produce 40% more revenues for a future canal that could accommodate ships
of at least 200,000 DWT. Higher increases in tolls rates may be possible, but estimating the
response by users to increases in tolls of the magnitude necessary to obtain much higher
revenues is probably beyond the scope of economics or any other discipline.
There is further reason why average tolls increases beyond 50% were not considered.
From an economic viewpoint, the purpose of constructing a sea-level canal is to render a
service of value to world shipping. Increases beyond 50% in tolls are not only impossible to
evaluate, but if required, could substantially eliminate a major economic justification for
investment in a sea-level canal.
Previous Studies of Tolls Sensitivity
There have been two relatively recent studies of the sensitivity of the existing Panama
Canal traffic to tolls increases. The A.D. Little Company conducted a study in 1965 for the
IV-96
Republic of Panama that measured the possible effects of tolls increases. This study was
undertaken in an attempt by Panama to justify higher annuity payments from the United
States. The study was limited to the short-run effects of tolls increases on 1963 traffic,
given substantially the conditions existing in 1963. The methodology used to measure the
ability to increase tolls was least-cost ship routing with the largest ship studied only 45,000
DWT in size. Specific qualifications were made in the report that no study or conclusions
were being made regarding the possible long-range effects of tolls increases. The report
concluded that tolls could be doubled or perhaps tripled with little short-term effect on the
volume of traffic. It further concluded that at such levels of increase there could be long-run
responses which might significantly reduce the level of traffic. Because the report is limited
to evaluating the short-run effects, given conditions existing in 1963, the conclusions
overstate the ability of a sea-level canal to increase tolls. A forecast for a sea-level canal
necessarily involves concern for long-range effects and certainly must consider the existence
of ships far larger than 45,000 DWT in size.
The other recent study of Panama Canal tolls sensitivity, which was completed in 1967,
was made by the Stanford Research Institute (SRI). This is the only comprehensive study of
the long-term effect of tolls increases on traffic. SRI identified the various alternatives to
the use of the Panama Canal previously discussed. The study concluded that the sensitivity
of traffic to tolls increases varied by commodity with maximum possible increases ranging
between 25% and 150%. An across-the-board increase of 25%, using the existing tolls
system, would produce 16% more revenue; and the maximum increase in revenue of 36%
over 20 years was possible with a tolls structure varying the tolls rate by commodity.
By making certain adjustments, it may be possible to make some determination of the
sensitivity of the sea-level canal traffic to tolls increases based on this SRI study. It should
be recognized that since the Panama Canal is limited to a ship size of approximately 65,000
DWT, its traffic is more sensitive to tolls increases than a sea-level canal. This is because the
existing canal is vulnerable to the economies of scale available with larger ship sizes using
alternate routes. This can be illustrated by the following example of a 50,000 DWT foreign
flag ship using the Panama Canal versus a 150,000 DWT ship using the Cape of Good Hope,
where both ships have originated on the East Coast of the United States bound for Japan.
50,000 DWT 150,000 DWT
25 Voyage days 38
$ 4,800 Daily operating costs $ 7,000
Voyage costs —
$120,000 Ship operations $266,000
20,000 Tolls =
$140,000 Total $266,000
45,000 Cargo tons 135,000
Sh Voyage cost per long ton $1.97
The foregoing example demonstrates that the existing Panama Canal is vulnerable to the
use of super ships using alternative routing. Even if the Panama Canal were tolls-free, it
IV-97
would cost $2.67 per ton of cargo using the 50,000 ton ship versus $1.97 for the larger ship.
As a matter of fact, the Japanese are currently constructing 150,000 DWT bulk carriers for
use in carrying coal from the East Coast of the United States to Japan via the Cape of Good
Hope.
Even though the 150,000 DWT ships are currently being built to avoid the limited draft
existing Panama Canal, these ships would use a sea-level canal at present or even higher tolls
rates. The saving to a ship in using a sea-level canal in the above illustration would be 13
days at sea (38 versus 25) or $91,000 in operating costs ($7,000 daily operating costs times
13 days). At existing rates of tolls this ship would pay $60,000 or would have a net saving,
using the sea-level canal, of $31,000. Accordingly, tolls could be increased 50% before the
cost of using a sea-level canal would be equal to the cost of the alternate longer route.
In those cases where SRI identified alternate ship size as a limiting factor for increasing
tolls, a sea-level canal would be in a position to charge a higher toll. The following is a list of
commodities which SRI identified as having tolls sensitivity because of super ships using
alternate routing and its estimate of the rate increases which would produce maximum
revenue over 20 years:
Commodity Present Rate Increase
Coal
Phosphate Rock
Iron Ore
Soybeans
Petroleum
Grains
An upward adjustment of the revenue potential for these commodities is required to
relate SRI’s findings to a sea-level canal. When this adjustment is made, the SRI study
appears to support the conclusions regarding the potential to increase revenues contained
elsewhere in this report.
Regarding inflation, SRI indicated that it cannot be automatically assumed that tolls
can be increased to the extent of inflation with effect on traffic volume. However, it is
apparent that to the extent that canal tolls are limited by alternate transportation modes,
tolls can be increased to the extent of the inflationary impact on the alternative without any
effect on traffic volume. For example, as the costs of constructing and operating ships
increases due to inflation, the ability of a canal to increase tolls also increases.
Comparative Transportation Economics
It is a basic conclusion of this report that the potential cargo tonnage forecast presented
in Chapter IV will be transported in world oceanborne trade between origins and
destinations that could gain advantage by using an interoceanic canal. The relevant question
is then: Will the traffic be shipped through a canal? This question can be substantially
answered by reference to the economics of various transportation modes, including, of
course, oceanborne transportation. In the long-term, the transportation system that is least
costly will be used to transport the tonnage.
IV-98
The canal is part of a transportation system. Its economics are tied to water
transportation ‘which, fortunately for a canal, has costs among the lowest of. all
transportation modes. For other transportation modes to compete against water transporta-
tion requires the presence of overwhelming cost factors other than transportation costs.
Table V-2 presents a summary of the comparative costs of transportation modes. The
amounts shown are not intended to be precise but are reasonable estimates so as to present a
valid comparison among the various transportation modes. It is readily apparent by a review
of Table V-2 that water transportation has a substantial advantage over other transportation
modes not only for bulk commodities but also for general cargo. The closest competition
for bulk commodities comes from pipelines.
The subsequent sections of this report review the possible competitive position of
alternative transportation modes to the use of a water transportation system involving the
use of a canal. In addition, an evaluation is made of the possibility of using water
transportation not involving the use of the canal by either alternative ship routing or
alternative ship routing combined with larger ship sizes than a canal could transit.
Alternative Ship Routing
The most apparent alternative to the use of a canal is a different ship routing. It is
probably also the alternative that can be evaluated with the greatest degree of confidence
since all dimensions of the problem remain the same except the longer voyage at sea.
The attractiveness of different ship routing is probably limited to bulk commodities
originating at a single port and destined for a single port or group of ports within close
proximity to one another. Ships in linear service (general cargo) call on many way-ports in
an attempt to maximize their utilization of capacity. The location and sequence of
way-ports can limit significantly the ability of such ships to alter their routing.
Table V-3 presents a summary of the relationship of ship size to the advantage of a
‘sea-level canal over the best alternate route. Listed are the major routes using the present
Panama Canal and the long tons of cargo that transited in Fiscal Year 1969.
The best alternate route is indicated for each route, along with the additional miles and
voyage days at 16 knots, to use of the Panama Canal. In determining the best alternate route
it was assumed that the Suez Canal would be open and that its tolls would be the same as
present Panama Canal tolls. (Suez Canal laden tolls have been approximately the same as
Panama Canal tolls for most ship types in recent years.) The columns in the right of the
schedule present four ship sizes (50,000; 100,000; 200,000; and 250,000 DWT), and the
percentage increase (decrease) in present Panama Canal tolls necessary to equalize the cost
of the route using the Panama Canal with the cost of the best alternate route. This summary
assumes that the same ship is using the sea-level canal or the best alternate route.
Accordingly, a specific ship size is only applicable if the sea-level canal can transit a ship of
that size. For example, if the maximum size ship an assumed sea-level canal can transit is
200,000 DWT, then the amounts for 250,000 DWT ships are not applicable.
Table V-3 supports the following conclusions regarding the relationship of a sea-level
canal and alternate routes:
1. As the difference in miles between the canal route and the alternate route
increases, the potential to increase tolls increases.
IV-99
TABLE V-2
COMPARATIVE COSTS FOR TRANSPORTATION MODES
Range of Charges
Transportation Mode Cents/Ton Mile
Water — bulk commodities 0.01 — 0.2¢
Water — general cargo
Pipeline — petroleum
Pipeline — slurry
Pipeline — slurry
Railroad
Railroad
Truck
Aircraft
NOTE: No loading or unloading charges included.
IV-100
Comments
Based on costs of foreign
flag ships 20,000 DWT and
over.
Wide range but most tonnage
is being transported at
lower end of cost range.
Volume over 2 million tons
a year and distance over 300
miles.
No preparation and separation.
Volume over 2 million tons a
year and distance over 300
miles.
Preparation and separation
included.
Unit train rate. No return load.
Based on operating costs
excluding return on capital.
Wide range but high end not
significant in terms of tons
carried.
One way haul. No return load.
Lowest amount is either
Lockheed L-500 or Boeing 747
operating under optimum
conditions.
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IV-102
2. As the ship size increases, the attractiveness of alternate routing to avoid tolls also
increases, demonstrating the economies of scale. The economies of scale curve based on
present technology falls very rapidly for ships less than 100,000 DWT, flattening out
between 100,000 and 200,000 DWT, and thereafter falls slowly. (Refer also to Figure V-3
which includes a curve showing the number of voyage days in present rates of tolls by ship
size.)
3. As ship operating costs increases the potential for a canal to increase tolls and
retain the traffic increases proportionately. This is not shown directly on the table but can
be deduced from the data shown.
For most routes and ships sizes, Table V-3 supports the conclusion that tolls can be
increased by varying percentages up to approximately 200% in current dollars before the
traffic is lost. The benefit to the user of the canal route varies by route and ship size
indicating that greater revenues could be obtained if a pricing system were to differentiate
by type of traffic in assessing tolls. The application of a system of tolls differentiating
charges by type of traffic is discussed in detail in the next part of this chapter.
The foregoing analysis is limited to the one-way voyage as contrasted with the round
trip. This approach is considered valid since the availability of a back haul cargo is not
influenced by the routing selected for the inbound cargo. The financial attractiveness of
using a route including a canal requiring the payment of tolls, or an alternative route, should
be analyzed separately for each leg of the round-trip voyage.
The possible use of the Northwest Passage has recently received considerable publicity.
A test voyage completed by a tanker demonstrated that it is physically possible to move a
ship from the North Slope of Alaska to the East Coast of the U.S. Based on information
currently available, the financial feasibility of the route has not been established for even
huge ice-breaking tankers specially constructed for the hazards of the ice. Furthermore, it is
considered remote that the route will ever be used in regular commercial trade. Accordingly,
it was not included among the possible alternative routes evaluated above.
Alternative Ship Size
The financial attractiveness of a different ship route can be enhanced by using ship sizes
larger than those that could transit an Isthmian canal. The evaluation of this alternative is
more difficult than simply evaluating the same ship size on an alternative route. In addition
to transit capacity of a canal, significant factors influencing the selection of ship size include
the capacity of ports to accommodate larger ships and the desire of sellers and buyers to
deal in larger unit transactions. For example, a shipment of 250,000 tons of wheat is
unheard of in present economics. Ina manner similar to the discussion of alternative ship
routing, the application of alternative ship size is probably limited only to certain bulk
commodities.
There has been a spectacular increase in the size of both tankers and bulk carriers
within recent years as is illustrated by Table V-4. Based on tankers now in operation and on
order, approximately 50% of the DWT capacity of the world’s fleet, but only 10% of the
number of ships, is represented by ships of 100,000 DWT or more. For dry bulk carriers,
12% of the DWT capacity now in operation or on order, but only 2% of the number of
ships, is represented by ships 100,000 DWT or larger. This development of super ships has
been based principally on the economies of scale. For example, the 25,000 DWT tanker has
IV-103
DAYS AT SEA
SHIP DWT (in thousands)
EQUIVALENCE OF DAYS AT SEA OPERATING COST
TO PRESENT PANAMA CANAL TOLLS
FIGURE V-3
IV-104
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IV-106
a daily operating cost of approximately $3,600 whereas the ship 8 times that size has a total
daily operating cost of approximately $8,000 or only somewhat more than doubling of cost.
Table V-5 presents a summary of ship operating costs and present tolls by ship DWT for
foreign flag ships. The range of daily operating costs by ship size tends to illustrate the
possible influence of future inflation. The economies of scale tend to flatten out beyond
200,000 DWT and there are other reasons to believe that ships in larger numbers will not be
built beyond that size.
Avoiding canal tolls by using an alternative route with a ship larger than that which a
canal could accommodate is relevant if the economies of scale are particularly strong for the
ship sizes larger than the canal can accommodate. This was previously discussed in reference
to the existing Panama Canal with its limitation of ships up to approximately 65,000 DWT.
Table V-6 summarizes the relationship of canal transit size capacity and the financial
attractiveness of using alternative routes and ship sizes. The table presents data for four
canal sizes: 100,000; 150,000; 200,000; and 250,000 DWT transit ship size. For each such
assumed canal size, an analysis is given for the following variables:
1. Canal route has an advantage over an alternative route of 5, 10, and 15 days based
on using a 16 knot foreign flag ship.
2. Ship size used on the alternative route is 150,000; 200,000; 250,000; and 300,000
DWT.
In each case for the route using the canal a voyage time of 20 days was assumed. Thus,
if the canal route has a 5 day advantage the alternative route requires 25 days.
If a canal is limited to a transit size capacity of 100,000 DWT ship, there is a clear
indication of the financial attractiveness of alternative routes and ship sizes. For most ship
sizes and range of canal advantage in days over an alternative route, even the elimination of
tolls results in the alternative route being financially advantageous.
If the canal can transit ships up to 150,000 DWT, it can compete with alternative ship
routes and ship sizes. However, it should be noted that decreases in current tolls levels may
be necessary on certain routes to retain the traffic. A canal that can transit ships of 200,000
and 250,000 DWT easily competes with alternative routing and ship size. For such large
transit size canals, competition would only come from routes where the canal had a
marginal advantage of about 5 days. These routes do not currently contribute significant
amounts of traffic to the present Panama Canal.
Table V-6 assumes that in every case the voyage through the canal requires 20 days. As
a matter of convenience in the analysis, 20 days were selected since this voyage time is
representative of the greatest number of routes using the present Panama Canal. However, it
should be pointed out that as the voyage time for the canal route decreases the financial
attractiveness of alternative routes with larger ship sizes also decreases. A separate analysis
of this has not been prepared because the effect is minor in comparison with the effect of
either ship size or difference between canal route and alternative route in voyage days.
For this analysis, ship sizes were limited to a maximum of 300,000 DWT. No ship
substantially beyond that size is either in operation or on order today. Thus, the data
available on such ships are limited. However, there is a clear indication, based on present
ship construction technology, that the economies of scale are small beyond 300,000 DWT.
Even ocean depths in some areas present constraints to ships beyond that size. It is probable
IV-107
TABLE V-5
COMPARISON OF TANKER OPERATING COSTS
WITH PANAMA CANAL TOLLS
Operating Cost of?
P g Present
5 Days 13 Days Tolls®
$ 46,800 $ 11,000
52,000
57,200
62,400 20,000
68,900
75,400
71,500 30,000
78,000
84,500
100,000 78,000 40,000
84,500
91,000
150,000 104,000 60,000
110,500
123,500
200,000 117,000 80,000
130,000
143,000
250,000 130,000 100,000
143,000
156,000
300,000 143,000 120,000
162,000
175,500
31 owest amount is estimated maximum 1968 cost, highest amount is about 20% above 1968 cost. The high amount
will be reached well before 1980 if the industry figure of a 3% per year compounded increase in operating cost
continues. Estimates include provision for all costs of operation and return on capital for foreign flag tankers.
Fotis determined on present Panama Canal system and rates for laden transit.
IV-108
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IV-109
that future ships larger than 300,000 DWT will be few in number and limited to specific
routes. Such ships should have little influence on canal tolls policy.
The foregoing discussion again emphasizes the potential advantage to a canal in
differentiating tolls by type of traffic. Even at present tolls levels, tolls on a 200,000 DWT
ship would be $80,000. The magnitude of charges at that level presents the opportunity for
alternatives to the use of a canal. An Isthmian canal would need to carefully determine the
level of charges to be made against large ships if they are to be attracted to canal usage and
if the construction of ship sizes too large to transit the canal is to be limited.
Petroleum Pipeline
Crude oil and petroleum products have been and are expected to continue to be
significant commodities shipped through a canal. If they continue to constitute approxi-
mately 17% of all traffic, 60 million tons of the potential traffic projection for the year
2000 will be of this category. Because of the importance of petroleum and its products for a
new canal, consideration must be given to the opportunity this traffic would have to use a
pipeline — an obvious alternative to a canal. The first analysis below treats a theoretical large
capacity pipeline of a size built to transport huge quantities of crude oil over a long period
of time. The second treats the recent proposal to construct a pipeline across Panama in
1971, to be operated by the Panamanian Government.
Theoretical Large Capacity Pipeline
The possibility is remote that a trans-Isthmian pipeline would attract petroleum
products. The pipeline operating problems, extensive storage facilities and difficult ship
scheduling problems associated with transporting a variety of petroleum products through a
pipeline system would significantly increase costs. Consideration of a pipeline is thus limited
to use for crude oil, which currently accounts for about 7% of Panama Canal traffic. As
previously discussed, the traffic forecast does not identify commodity movements. Thus, no
specific estimate of crude oil traffic in the year 2000 is provided. However, a continuation
of the growth pattern and mix of random crude oil and petroleum products movements of
the past 20 years would leave considerably more than half the petroleum tanker tonnages
not subject to replacement by pipeline movements.
The major U.S. petroleum companies have expressed the opinion that a sea-level
Isthmian canal able to accommodate large tankers would be used on a random basis, as is
the present canal, but that its construction cannot be justified on the basis of the
requirements for petroleum movements alone.
Because of its permanence and lack of flexibility, a pipeline must be based on
broad forecasts as to the flow of oil over a particular route for many years ahead. In the
appraisal of the value of alternative transport methods, a trans-U.S. pipeline may play a
major role in transporting Alaskan North Slope crude oil to U.S. Midwest and East Coast
markets should use of the Northwest Passage by ice-breaking tankers prove infeasible.
At present, it costs approximately 11.2¢ per barrel of crude oil to transit the
Panama Canal in a fully laden tanker assuming a ballast return. The toll cost for a one-way
transit is approximately 6.4¢ per barrel. However, most of the existing crude oil traffic
through the Panama Canal is a two-way traffic, i.e., the laden transit is matched by a ballast
transit. Thus, the effective rate is about 11.2¢ per barrel.
IV-110
To accommodate a huge movement of crude oil and to be as competitive as
possible with a sea-level canal, a trans-Isthmian pipeline would need an annual capacity of
approximately fifty million long tons. Construction costs for such a pipeline are detailed in
Table V-7. Operating costs, based on various assumptions on cost of capital and utilization
as well as the amortization period for the project are shown in Table V-8.
The cost of capital was calculated both for 8% and 10% interest rates, and this is
believed to be a reasonable range. The amortization period was set at 20 years. With a 40
year amortization period, the annual amortization and total annual costs would decrease
approximately 16% and 10%, respectively. Included in the operating cost is a tax to the
Republic of Panama of 22¢ per long ton. The original draft treaty that was negotiated
between the United States and Panama in 1967 provided an annuity for Panama from the
Panama Canal of 22¢ a long ton and this amount has been included in the estimated cost of
operating a new canal. It was assumed that whether the Republic of Panama or private
interests constructed a pipeline across the Isthmus Panama would insist on some amount of
tax and 22¢ a long ton was selected as a reasonable estimate. It would not be economically
logical for the Republic of Panama to allow traffic to be diverted from the canal, where it
earns 22¢ a ton, to a pipeline where it earns less.
The optimum operating situation for a pipeline is a single major movement. If one
assumes that such a movement involving full utilization of the pipeline takes place, the
resultant cost would be 9.13¢ per barrel at the 8% cost of capital. No additional cost is
applicable for the loading and discharge of ships. Loading and discharge rates of 15,000
bbl/hr are practical, making it possible to limit the delay time to one day for a ship. This is
approximately the same delay time which a ship experiences using a canal. Accordingly, a
round trip voyage through the canal, laden in one direction and in ballast for the return,
involves the same lost time as loading and discharging the tankers through a trans-Isthmian
pipeline.
Less efficient utilization of a pipeline would result from random usage by several
origin and destination movements. Under these conditions the total utilization of the
pipeline is assumed to be 20% less or 40 million long tons annually. This results in a pipeline
cost of 10.62¢ per barrel at 8% cost of capital. The shipper may also incur the additional
costs involved in obtaining two ship charters rather than one in a random type use of a
pipeline. Another consideration would be that if the shipper also owned the ship, as is the
case of integrated petroleum companies, there may be strong cost advantages to having the
ship continue through the canal rather than chartering an additional ship for use on the
other end of the pipeline. Both of these factors could add significant cost to the use of a
pipeline on a random basis but quantifying this cost is difficult.
The opportunity for a backhaul movement for a ship using the canal could
completely change the economics of a pipeline to strongly favor the canal. An example can
best illustrate this point. The assumed facts are: (1) crude oil is being moved in large
quantities between the West Coast of South America and the East Coast of the U.S. and in
the reverse direction a large quantity of grain is being moved; and (2) the tankers using a
pipeline could not obtain the backhaul grain cargo. Under these circumstances, the pipeline
would have little opportunity to compete for the crude oil even if the canal were to increase
tolls substantially.
IV-111
TABLE V-7
TRANS-ISTHMIAN PIPELINE
ESTIMATED CONSTRUCTION COSTS
ANNUAL CAPACITY 50,000,000 TONS
Pipeline
Includes water crossing, poor terrain, pumping,
and bridges. 42’’ — 48†line, 40 miles long at
$650,000/mile. $ 26,000,000
Terminals
Includes submarine pipeline or dredging Atlantic
and Pacific ports with two berths each for 326,000
DWT tankers in 90’ — 100’ water. 50,000,000
Storage
For crude oil and ballast water.
Locations at both Atlantic and Pacific ports.
7,000,000 BBL storage at each location at
$2.00/BBL. 28,000,000
Total Construction $104,000,000
Other
Engineering at 10% $ 10,400,000
Legal and administrative 2,000,000
Interest during construction and contingencies
at 15% 15,600,000
Total $132,000,000
IV-112
TABLE V-8
TRANS-ISTHMIAN PIPELINE
ESTIMATED CHARGE PER BBL
Annual Utilization
50,000,000 Tons 40,000,000 Tons
100% Capacity 80% Capacity
Cost of Capital* Cost of Capital*
8% 10% 8% 10%
Total Cost Annually
Construction cost of
$132,000,000 recovered
over 20 years $13,150,000 $15,550,000 $13,150,000 $15,550,000
Operation and
maintenance 7,800,000 7,800,000 7,800,000 7,800,000
Total $20,950,000 $23,350,000 $20,950,000 $23,350,000
Cost per BBL 5.99¢ 6.67¢ 7.48¢ 8.34¢
Panama tax 3.14 3.14 3.14 3.14
Total cost per BBL 9.81¢ 10.62¢ 11.48¢
*Amortization period 20 years.
Pipeline Proposed by Consortium
The following discussion evaluates a recently proposed pipeline across the Isthmus
of Panama. In January 1970, a consortium of British and German interests announced a
preliminary agreement with the Government of the Republic of Panama for the
construction of a crude oil pipeline. This development poses a threat to the petroleum
traffic currently using the Panama Canal and must be considered in any decision to build a
sea-level canal.
The competitive environment of the existing Panama Canal, limited to ship sizes up
to approximately 65,000 DWT, differs greatly from that of a sea-level canal with capacity to
transit much larger ships. For sufficient volumes of traffic, the economies of scale of ship
sizes beyond the size that can transit the existing Panama Canal become attractive. This is a
principle previously discussed in the Section entitled ‘Previous Studies of Tolls Sensitivityâ€
as well as the Section entitled “Alternative Ship Size.â€
IV-113
Based on information publicly released regarding this proposed pipeline; the
following data are available:
(1) The pipeline will be 30 inches in diameter with a daily capacity of 700,000
barrels or 100,000 long tons.
(2) There will be storage capacity for six million barrels.
(3) Tankers will berth to single berth moorings connected by submarine pipeline
to the storage facilities. The draft at moorings will permit tankers up to 120,000 DWT.
(4) The Republic of Panama will own and operate the pipeline which will be
financed by the consortium over a 10-year period.
(5) The capital cost of the facilities is estimated at $80,000,000.
(6) No operating cost data were announced for the pipeline but it can be assumed
that it will be only moderately less than for the larger capacity pipeline previously discussed.
Accordingly, an annual operating cost of $7 million has been assumed.
Based on the foregoing facts and assumptions the cost per barrel of output can be
estimated. Similar to the previous analysis of the larger capacity pipeline, an 8% and 10%
cost of capital over a 20-year amortization period will be assumed. The cost per barrel has
been estimated based both on maximum daily capacity of 700,000 barrels and on 80%
capacity or 560,000 barrels. This results in annual utilization of 36,500,000 tons and
29,200,000 tons, respectively, as shown in Table V-9.
This analysis indicates that the cost of the proposed pipeline is about the same as
for the larger capacity pipeline previously described. However, the proposed pipeline does
not have the same facilities in that it can only accommodate a 120,000 DWT ship and has
storage for 6,000,000 barrels vs. accommodation for a 326,000 DWT ship and 14,000,000
barrel storage for the larger pipeline.
There are two sources of traffic which appear available to this pipeline at the
present time. The first source would be the West Coast of South America including
developments in Bolivia, Peru, Equador and Colombia. The development of sources of
crude oil in Equador and Colombia are recent and publicized reports have indicated that the
quantities involved will increase substantially over the next few years. The obvious market
for this crude oil is the U.S. East Coast and Europe since it is reported that the recent
discovery of oil in Alaska’s North slope will fulfill the requirements of the U.S. West Coast.
A second source of traffic for this proposed pipeline would be oil from the Alaskan
North Slope. This is domestic U.S. crude oil with a cost premium over crude oil available
from foreign sources. It is reasonable to assume that all production will be for consumption
within the U.S. The obvious initial market will be the crude oil-short West Coast of the U.S.
A trans-Alaskan pipeline is to be constructed from the North Slope of Alaska to the
southern Alaskan port of Valdez. From this point the oil will be moved by tanker to U.S.
West Coast ports.
Based on estimates of possible production rates in the North Slope, it is projected
that the production will exceed the requirements of the U.S. West Coast and therefore the
excess will need to move to the U.S. Midwest and East Coast. There have been extensive
studies undertaken by the various oil companies involved on how to transport this oil to the
U.S. Midwest and East Coast. The most widely publicized has been the MANHATTAN
project involving the conversion of the tanker MANHATTAN into an ice breaking ship for
testing of the Northwest Passage as a route to be used. Because of the extensive costs
IV-114
TABLE V-9
TRANS-ISTHMIAN PIPELINE — CONSORTIUM PROPOSAL
ESTIMATED CHARGE PER BBL
Annual Utilization
100% Capacity 80% Capacity
36,500,000 Tons 29,200,000 Tons
Cost of Capital* Cost of Capital*
Total Costs Annually 8% 10% 8% 10%
Construction cost of
$80,000,000 recovered
over 20 years $7,900,000 $9,420,000 $7,900,000 $9,420,000
Operation and
maintenance 7,000,000 7,000,000 7,000,000 7,000,000
TOTAL $14,900,000 $16,420,000 $14,900,000 $16,420,000
Cost per BBL 5.83¢ 6.43¢ 7.29¢ 8.03¢
Panama Tax 3.14 3.14 3.14 3.14
Total Cost per BBL 10.43¢ 11.17¢
*Amortization period 20 years.
involved in this project, it can be assumed that the oil companies anticipate possible
substantial benefits from this route. If the Northwest Passage proves to be economically
unfeasible, an alternative is a trans-U.S. pipeline. The crude oil would move from Valdez by
tanker to Seattle and then to Midwest and East Coast markets via pipeline. According to
reports made public by oil companies, the most costly transportation system for moving
Alaskan crude oil would be via tanker and a trans-Panama pipeline.
The economic advantages of using a trans-Panama pipeline vary considerably when
comparing movements of crude oil originating on the West Coast of South America with
those originating on Alaska’s North Slope. With respect to crude oil originating on South
America’s West Coast, it is a relatively short distance from Equador, Colombia and Panama
to the pipeline. Even the approximate 2,000 miles from Panama to New York requiring
approximately 5 days at sea is considered relatively short for the utilization of super-ships.
For this reason, the pipeline is placed in direct competition with the Panama Canal without
additional advantage of the economies of scale of larger ship size. It is concluded that for
IV-115
this traffic the pipeline will be unable to charge a rate higher than the tolls cost for using the
Panama Canal or approximately 11¢ per barrel. Depending on the assumptions made
regarding the cost of capital and the amortization period for the project, the advantage of
the pipeline over the canal tends to be marginal. In arriving at this conclusion, a 3.14¢ tax to
Panama has been included in that Panama may receive such an amount for traffic utilizing
the Panama Canal at some future date.
The advantage of the Panamanian pipeline to the Alaskan North Slope crude oil is a
much more complex matter to analyze. The conclusions of the oil companies that in the
long term the Northwest Passage or a trans-U.S. pipeline will be the most economical
method of reaching Midwest and East Coast markets has been accepted for purposes of this
analysis. Therefore, the trans-Panama pipeline has a potential place for this crude oil only in
the short term. Specifically, this period would start when North Slope production exceeds
requirements of the U.S. West Coast for any one oil company and that company has need
for the oil on the U.S. East Coast. The period would extend until it would be advantageous
to employ the more capital intensive alternatives of using the Northwest Passage route, if
feasible, or the trans-U.S. pipeline. Depending on the circumstances in which the oil
companies find themselves and their individual judgments as to the future, this period could
be very short or could extend for several years. In this regard, the oil companies may either
act independently of each other or as a group. The group approach is illustrated by the joint
investment of the oil companies involved in the trans-Alaska pipeline. Even if the facts
presently knowntothe oil companies were available for analysis, it would probably be
impossible to make a judgment at this time as to how long the temporary period would
extend during which the trans-Panama pipeline would be utilized.
It is possible to analyze the advantage of a trans-Panama pipeline over the Panama
Canal during the temporary period when oil companies will need to move crude oil to the
East Coast U.S. before either the Northwest Passage or a trans-U.S. pipeline is employed.
The advantage of the trans-Panama pipeline is substantial as is shown by the following
analysis comparing the use of a 65,000 DWT ship transiting the Panama Canal and a
120,000 DWT ship utilizing the trans-Panama pipeline.
When the economies of scale of large ship sizes can be brought to bear, the
trans-Panama pipeline enjoys a substantial advantage over the existing Panama Canal. This
has been illustrated for the transportation of the North Slope oil. In contrast, when the ship
sizes that utilize the pipeline can also transit the Panama Canal, which may be the case for
the West Coast South American crude oil, the pipeline has only a marginal advantage. The
decision to build the trans-Panama pipeline at this time will be dependent on the amount of
utilization which can be assured from the shippers of North Slope oil. Based on information
that has been publicly released, the consortium that has proposed the trans-Panama pipeline
is now in the process of attempting to obtain contracts from the various oil companies.
Results of these discussions are not available at this time.
Petroleum Pipeline — Conclusions
The following conclusions regarding the possible effect of a crude oil pipeline on
the revenue potential of a sea-level canal have been reached:
(1) Ifasea-level canal were available for transit, the proposed trans-Panama pipeline
probably would not be constructed were tolls set at the present or moderately lower levels.
IV-116
Alternative Routing
Panama
Panama Canal Pipeline
65,000 DWT 120,000 DWT
Daily Operating Cost $ 10,400! $ 13,000!
‘Required Days Between Valdez,
Alaska and New York
7,000 miles at sea @ 16 Knots 36 36
Panama Canal transit round trip 2
Mooring, discharging and loading — 4?
2 ships
Total days 38 40
Cost of Voyage
Ship cost $395,200 $520,000
Panama Canal tolls 46,800 =
Total Cost $442,000 $520,000
Cargo in barrels 413,000 770,000
Cost per barrel S07 $ .68
Difference — available for
pipeline charges and cost
savings to oil companies $ .39
lus. flag ship operating costs are used (as contrasted to the foreign flag ship operating costs used elsewhere in this
chapter) in accordance with the provisions of the Jones Act.
2The cargo loading and discharging rate for this smaller capacity pipeline was assumed to be slower than for the larger
Capacity pipeline previously discussed. Based on this assumption, it is estimated that it will take approximately 2 days at
each end of the pipeline to moor the ship, discharge or load the cargo, and return to operating speed.
(2) If a pipeline is built and available for use when the sea-level canal is opened, it
may be necessary for the sea-level canal to decrease tolls substantially over the life of the
existing pipeline in order to attract traffic. The pipeline operating authority could decrease its
prices to out-of-pocket costs including Panama tax. However, once the pipeline requires
extensive capital replacements, it must charge prices near the level of existing Panama Canal
tolls. Accordingly, for the long-term, the sea-level canal may be able to maintain tolls for
crude oil at present Panama Canal levels or moderately lower.
IV-117
(3) Were the requirement to develop for a huge continuing movement of crude
oil permitting employment of ships too large to transit the sea-level canal in combination
with the large capacity pipeline previously described, a substantial decrease in tolls might be
required to attract such a movement. It is also possible that such a movement would not be
attracted to a sea-level canal regardless of tolls levels.
The foregoing conclusions should be correlated with the previous analysis of
alternative ship routing and ship size. Either in combination with a pipeline or independent
of it, superships are quite competitive with a sea-level canal. Accordingly, tolls may need to
be substantially lower per unit of cargo capacity for superships than for smaller ships.
Slurry Pipeline
The technology of moving solids by pipeline is now well established. Although
currently only between 100 to 200 thousand ton/miles move annually by slurry pipeline,
substantial growth of this method of transportation is expected in the future. Cargos for
which slurry pipelines would be adaptable include coal, iron ore, potash, phosphate, copper
ore and sulphur.
The slurry concept as adapted to the loading and discharge of bulk carriers enables
these ships, formerly limited in maximum size due to the draft limitations of ports and the
speed of shoreside cargo handling capabilities, to enjoy the advantages and economies now
available to mammoth tankers. Slurried iron ore, coal and other bulk products can now be
economically transported in giant OBO (ore/bulk/oil) carriers matching the physical size and
ability of the largest tankers and able to transfer cargo by pumping through a submarine line
while standing offshore.
The economics of operating a slurry pipeline are not significantly different from the
economics of the petroleum pipeline previously discussed. Thus, for purpose of analysis, the
cost presented for the petroleum pipeline can be used. The major difference between the
petroleum pipeline and the slurry pipeline involves the required preparation of the cargo
prior to movement through a pipeline. Quite obviously, utilization of a slurry pipeline
requires that the solid material, iron ore, coal, etc., be ground into small particles which
when mixed with water can be pumped through the pipeline. This grinding or preparation of
the commodity may or may not represent an increase in the cost of transporting the
product. For example, the iron ore mined in Peru is now ground, the impurities removed,
and a pellet formed which has a much higher percentage content of iron ore oxide than the
original ore prior to shipment. The ground iron ore rather than the pellet could be shipped
by a bulk carrier to one side of the Isthmus, transported across the Isthmus by slurry
pipeline, stored temporarily, and then loaded on another bulk carrier for transportation to
its ultimate destination. At the destination the iron oxide could be pelletized for use in the
blast furnaces. Thus, use of a slurry pipeline would only require a resequencing of when the
pelletized operation occurs for the cargo. This resequencing of operations may not be
without problems since there may be other factors influencing the decision to form the
pellets in Peru rather than in the United States.
The major solid material now being transported through the Panama Canal is
metalurgical coal originating on the U.S. East Coast and terminating in Japan. Inquiries were
made regarding this cargo and it was reported that the slurry method would probably not be
economically adaptable to metalurgical coal. Coal dust would not be usable in the
IV-118
manufacture of high-grade steel and thus would require it to be formed into pellets at
additional cost. Coal used as a source of energy, such as for the furnaces of an electric
generating station, can be put in slurry form and utilized but no such coal currently transits
the Panama Canal in large quantities.
The slurry pipeline does appear to offer a possible attractive alternative to the use of a
canal. Its application would require a huge quantity of cargo, such as iron ore, to be
economical. This again demonstrates that the economics of avoiding a canal are most
attractive when there is one dominant movement of a commodity between a single source
and a single destination. The presence of huge quantities permits an investment in facilities
not justified with smaller quantities. The traffic forecast does not identify the commodities
that will move through the canal in the future; thus, it is not possible to determine if a
slurry pipeline would be practicable. However, the slurry pipeline does offer a potential to
limit the ability of a canal to maintain current levels of tolls and almost certainly eliminates
the possibility of significantly increasing tolls on cargoes which could use a slurry pipeline.
Land Bridge and Railroads
The land bridge concept has received considerable exposure lately in various periodicals.
It is a concept involving the combination of water transportation and railroad transportation
to avoid the use of the Panama Canal. This concept has become feasible from an operating
viewpoint because of the development of containerized traffic. Containers loaded with cargo
at their origin can be transferred from one transportation mode to another expeditiously
and at significantly lower cost than was previously possible.
As the term “land bridge†has gained popularity, the concept has been broadened in
scope. Originally the land bridge concept was restricted to an international commerce route
between the Far East and Europe moving overland via the North American continent by
rail. However, the potential for increased rail tonnages has caused U.S. domestic carriers to
broaden the concept to include traffic terminating or originating in the states which lie in
the coastal areas opposite the foreign countries served. That is to say, the land bridge under
the broadened concept has included goods moving both to and from the Far East and
Eastern U.S. and between Europe and the West Coast, where both ocean and land
transportation systems are employed.
The original interest in the land bridge developed with the closure of the Suez Canal in
1967 which required the diversion of Far East to Europe traffic from the formerly shorter
Suez Canal route to the longer Panama Canal route. Advocates of the land bridge claimed
that significant reductions in transportation miles and transit times could be achieved by the
utilization of North American railroads rather than the all-sea route involving the use of the
Panama Canal. Table V-10 presents a comparison of miles and transit time as between the
land bridge route and the Panama Canal route for two combinations of traffic origin and
destination: Yokohama — New York; and Yokohama — Europe. As is shown by Table V-10,
there are significant savings in miles by the use of the land bridge route over the all-water
Panama Canal route. However, for the Yokohama — Europe traffic, it is not possible to
convert the mile savings to a saving in transit time because of the required transfer time
between ships and railroads.
Advocates of the land bridge have analyzed international traffic in an attempt to
identify cargos which can be containerized and thus constitute potential cargo for the land
IV-119
TABLE V-10
PANAMA CANAL VS. LAND BRIDGE
COMPARISON OF NAUTICAL MILES AND TRANSIT TIMES
Land Bridge Panama Canal
Miles Days Miles Days
Yokohama — New York! 2
Yokohama — Los Angeles
Los Angeles — New York rail
Yokohama — New York
Canal delay time
Total
Yokohama — Europe?
Yokohama — Los Angeles
Transfer?
Los Angeles — New York rail*
Transfer?
New York — Europe
Yokohama — Europe
Canal delay time
Total
NOTES: ‘No Provision made for port time since it is common to both routes.
2Sea time assumes 23 knot ship or 552 nautical miles per day.
3 ssumes optimum situation of direct transfer between ship and an awaiting unit train.
ST ransit time based on Atchison, Topeka and Santa Fe Railroad proposal.
bridge. Based on existing international traffic, the following is a summary of the long-tons
of traffic now moving through the Panama Canal which advocates of the land bridge claim
can be containerized:
Japan — East Coast US. 8,000,000 tons
Japan — Europe 1,000,000 tons
U.S. East Coast — Japan 1,000,000 tons
Europe — Japan 500,000 tons
Europe — West Coast U.S. 1,000,000 tons
IV-120
By far the most significant quantity involves Japanese exports of manufactured products to
the East Coast of the United States. Based on detailed records maintained by the Panama
Canal Company, approximately one-half of Japanese exports of manufactured products to
the East Coast of the United States involves manufactures of iron and steel. There is reason
to doubt that this is cargo that is readily adaptable in an economic sense to containerization.
U.S. railroads have been keenly interested in the land bridge as a new source of traffic.
Among the leaders of U.S. railroads in this matter has been the Atchison, Topeka & Santa
Fe Railroad (ATSF). The ATSF has prepared a proposal of rail rates for the utilization of
unit trains for land bridge traffic. These proposed rates are presented in Table V-11. The
significant number on the table is the total one-way cost for one 20’ container of $250.
Present U.S. transcontinental freight rates for a similar 20’ container would be approxi-
mately $400. (There are, of course, a variety of rates but $400 is considered to be
TABLE V-11
LAND BRIDGE PROPOSED RAIL RATES BY ATSF RAILROAD
Unit Train Specifications
Number of cars per train
Container capacity per train
Minimum annual round trips
Trip days for one-way
Total Train Costs
Cost per round trip without cars $144,000
Charge for cars per round trip 16,000
Total per round trip $160,000
Transportation Cost Per Container?
Total cost one-way
Per container mile
Per ton mile!
1
NOTES: “Assumes average of 10 long tons per container.
2 Assumes 100% utilization of unit train.
IV-121
|
;
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sf
representative.) The significant point is that the ATSF has proposed to make a substantial
freight rate reduction in an attempt to attract this new traffic. However, in doing so, they
have assumed the possible risk of domestic shippers requesting similar rates.
The land bridge will need to compete with the all-sea route utilizing container ships.
The new modern container ships which are currently being built have speeds in the range of
22 to 30 knots. The economics of container ships are summarized in Table V-12 for a 23
knot container ship with a capacity for 1,500 20’ containers. It should be noted that at
optimum utilization the per ton mile cost for the container ship is 1.2 miles as compared
with the optimum utilization cost of the proposed ATSF unit train of 8.3 mils.
TABLE V-12
ESTIMATED COST BY CONTAINERSHIP FOR THE TRANSPORTATION
OF CONTAINERS BY FOREIGN FLAG OPERATOR
Ship Specifications
DWT 26,000
Container capacity 1,500/20’
Service speed in knots 23
Daily fuel consumption in tons 250
Construction cost $15,000,000
Panama Canal laden tolls $15,000
Daily Operating Costs
Capital recover'
Hull and machinery insurance
Labor, maintenance & other expenses
Cost in port
Bunkers (fuel)
Cost at sea
Transportation Cost Per Container?
Per day in port $4.39
Per day at sea $6.52
Per sea mile $.012
Per ton mile? 1.2 mils
NOTES: iT Necumes 340 operating days annually at 10% cost of capital over 20 years. Operating days include both
days at sea and cargo loading/discharge time.
2 average of 10 long tons per container.
= eetines 100% utilization of ship.
IV-122
A series of tables has been prepared comparing the economics of the land bridge route
with the all-water route. The first comparison is made in Table V-13 which compares the
all-water route with the original concept of the land bridge route for Far Eastern traffic to
Europe. Specifically, the table compares traffic originating in Yokohama, Japan destined for
Europe. For such traffic the cost of the land bridge for one 20’ container is estimated to be
approximately $432 versus the all-sea Panama Canal route cost of $166.48 or net difference
$265.40. Note that the all-sea cost from origin to destination is less than the proposed
ATSF rates for the land bridge section of the route alone. The comparison assumes
optimum utilization of both the ship and of the unit train. However, even if the ship has a
50% utilization as compared with the optimum utilization of a unit train, there is still a
significant advantage to the all-sea route. Accordingly, from the viewpoint of transportation
cost, there is little apparent opportunity for the land bridge to compete with the all-sea
route for traffic between the Far East and Europe.
TABLE V-13
COMPARISON OF COSTS FOR LAND BRIDGE AND PANAMA CANAL ROUTES
YOKOHAMA — EUROPE
20’ CONTAINER
Land Bridge
Yokohama — Los Angeles — 9 days @ $6.52 $ 58.68
Port transfer charge 30.00
Ship delay — 2 days @ $4.39! 8.78
Proposed ATSF rail charge 250.00
Port transfer charge 30.00
Ship delay — 2 days @ $4.39! 8.78
New York — Rotterdam — 7 days @ $6.52 45.64
Total cost per container $431.88
All Sea Panama Canal Route
Yokohama — Rotterdam — 24 days @ $6.52 $156.48
Panama Canal tolls 10.00
Total cost per container $166.48
Difference — land bridge excess $265.40
NOTES: In comparison with the direct sea route, ships will have port time at either.end of the land bridge. An
allowance of 2 days at each port to arrive, discharge cargo and depart was assumed.
IV-123
As previously identified, the largest volume of containerizable traffic originates in Japan
and terminates on the U.S. East Coast. Table V-14 presents a comparison of costs as
between the land bridge and the all-sea Panama Canal route for this traffic. No ship port
time and terminal costs are included in this comparison since both routings would incur
similar costs. This table again demonstrates the substantial financial advantage of the all-sea
Panama Canal route over the routing including the land bridge. Even if the ship discharging
its cargo on the East Coast of the United States were required to return empty and U.S.
railroads were willing to return the containers to the West Coast of the United States free of
charge, the all-sea Panama Canal route would still have an advantage. Accordingly,
significant increases in tolls charges against the ships using the Panama Canal could be made
without diverting traffic through the canal to a land bridge route.
The traffic between the West Coast of the United States and Europe has not been
analyzed to determine the cost differential between the land bridge route and the all-sea
Panama Canal route. No analysis was considered necessary since the differential and
conclusions would be comparable to that for the Far East to the East Coast of the United
States, as described previously.
The final comparison between the use of U.S. railroads and the land bridge route with
the all-sea Panama Canal route to East Coast U.S. ports is presented in Table V-15 for traffic
between Asia and the U.S. Midwest. Specifically, the traffic analyzed is between Yokohama
and Chicago. The degree of confidence in the findings of this comparison is considered to be
very limited due to the absence of any known data on possible U.S. rail rates. For purposes
of comparison it was assumed that U.S. railroads may be willing to offer freight rates
TABLE V-14
COMPARISON OF COSTS FOR LAND BRIDGE AND PANAMA CANAL ROUTES
YOKOHAMA — NEW YORK
20’ CONTAINER
Land Bridge
Yokohama — Los Angeles — 9 days @ $6.52 $ 58.68
Los Angeles — New York rail 250.00
$308.68
All Sea Panama Canal Route
Yokohama — New York — 18.5 days @ $6.52 $120.62
Panama Canal tolls 10.00
$130.62
Difference — land bridge excess $178.06
IV-124
between Los Angeles and Chicago at about 60% of the proposed ATSF transcontinental
rate. By so doing the western railroads in the United States would be attempting to compete
for traffic that is now held by the eastern roads. It is reasonable to assume that the eastern
roads would respond by offering rate reductions in order to retain the traffic. It has been
assumed that the minimum offering by these eastern roads would be approximately 40% of
the proposed ATSF transcontinental rate. The assumed rail rates for the Los Angeles to
Chicago route are unrealistically low in comparison to existing domestic freight rates.
However, the western railroads may be willing to make substantial rate reductions in an
attempt to attract this new source of international traffic. Under the assumptions made, the
land bridge route does offer a slight advantage over the all-sea Panama Canal route. The
significance of this result in terms of competition for a future canal is probably limited for
the following reasons:
1. The assumed U.S. freight rates may not materialize.
2. The amount of traffic from Japan terminating in the U.S. Midwest is not
substantial.
TABLE V-15
COMPARISON OF COSTS FOR LAND BRIDGE AND PANAMA CANAL ROUTES
YOKOHAMA — CHICAGO
20’ CONTAINER
Land Bridge
Yokohama — Los Angeles — 9 days @ $6.52 $ 58.68
Los Angeles — Chicago by rail! 150.00
$208.68
All Sea Panama Canal Route
Yokohama — New York — 18.5 days @ $6.52 $120.62
New York — Chicago by rail? 100.00
Panama Canal tolls 10.00
$230.62
Difference — all-sea route excess $ 21.94
NOTES: ‘Based on the ATSF proposal, the transcontinental rate is $250 — Assuming a 60-40 split over Chicago,
the Los Angeles — Chicago rate would be $150.
2The New York — Chicago rail rate is unrealistically low based on present domestic rates. However, if the
western railroads were to propose special rates to attract this traffic, it is reasonable to assume that the
eastern roads would respond with competitive rates.
3No transfer and ship delay time are shown since they are common to both routes.
IV-125
The foregoing analysis supports the conclusion that the land bridge and U.S. railroads
do not appear to limit the potential for a canal to maintain present levels of tolls or to make
significant increases in them. This may appear somewhat surprising since U.S. railroads have
effectively competed for traffic formerly carried by ships between the two U.S. coasts
utilizing the Panama Canal. However, the economics of traffic originating and terminating in
the United States is significantly different from the economics of traffic which can use
foreign flag ships. In the case of U.S. traffic, the Jones Act requires that the cargo be carried
on ships both built in the United States and operated under the U.S. flag. These ships have a
level of cost at least double that of foreign constructed and foreign flag operated ships.
Aircraft
The transportation by air of high value to weight cargos will continue to show
significant growth. Supersize jumbo jets and air busses are expected to expand the range of
commodities which are not subject to air freight competition. Table V-16 summarizes
forecasts of free world air freight from 1970 to 1980 made by various U.S. corporations.
These forecasts demonstrate the anticipated impressive increases in the quantity of cargos
moving by air.
Although air freight has grown substantially in recent years and is anticipated to
continue its growth rate, the aggregate quantity of cargo moving by air remains insignificant
in comparison to total world cargo movements. Assuming the forecast volumes of traffic
materialize, air freight will still account for less than 1% of the aggregate ton/miles of cargo
moved in 1980.
The comparison of the cargo capacity of the largest aircraft with existing ships will
assist in understanding the significance of air freight as a source of competition for a
TABLE V-16
FORECAST OF FREE WORLD AIR FREIGHT
As Prepared by Various U.S. Companies
Forecast
Billions of Ton/Miles
Year
Company Revised 1975
Boeing
Douglas
General Electric
Lockheed
Pratt & Whitney
Sperry Rand
IV-126
sea-level canal. The largest existing aircraft for the carriage of cargo is the U.S. Air Force
C-SA for which the Lockheed Aircraft Company has a planned civilian version referred to as
the L-500. The L-SO0 has a maximum gross payload of approximately 145 long tons. Gross
payload is used since it is comparable to the cargo deadweight of ships. It is estimated that
the L-500 has an annual ton/mile productivity of approximately 237 million. The container
ship referred to in Table V-12 would be utilized to carry comparable cargos. Assuming a
cargo capacity of 20,000 long tons for the ship and further assuming 200 operating days at
sea per year, the ship would have an annual productivity of 2.2 billion ton/miles. Thus, it
would require nine L-500’s to match the annual ton/mile capacity of one container ship.
The original construction cost of a container ship is approximately $15,000,000 whereas the
estimated cost of nine L-500’s is $207,000,000.
Although aircraft may compete in a limited manner for high-value manufactured
products, it is currently inconceivable that they will be used for bulk commodities. One
simple illustration assists in placing this in perspective. Two 300,000 DWT ships have the
capacity to carry the entire free world projection of air cargo traffic for the year 1980.
There is a wide difference in operating costs as between container ships and aircraft. As
previously presented in Table V-12, the per ton mile cost of the container ship is between 1
and 2 mils. The optimum level of operating cost for an L-500 is between 3.0 to 5.0 cents per
ton/mile. The existing and planned container ships can grow substantially in size while
decreasing their cost per ton/mile by taking advantage of the economies of scale for water
transportation. However, based on present technology, it appears that the aircraft are near
the bottom of the: economies of scale curve. Figure V-4 presents a history of aircraft direct
operating costs. There is no detailed information available on the cost of aircraft larger than
the Lockheed L-500 or the Boeing 747, but aircraft manufacturers have indicated that
larger aircraft will not produce significant cost savings.
If aircraft are to divert sufficient cargoes from ships to affect future canal traffic
significantly, it will be necessary for them to carry such cargoes as automobiles. Cargoes
currently carried by aircraft are of such high dollar value and move in such special
circumstances that were aircraft to carry all such cargoes currently using the Panama Canal
there would be no noticeable effect on canal traffic. A forecast of air cargo by trade area is
presented in Figure V-5. It should be noted that the two major routes involve U.S. domestic
and North Atlantic traffic. The possible routes which could affect canal traffic are not large.
To overcome the significant disadvantage in terms of transportation cost, aircraft must
look to other factors influencing cost which are favorable to their type of service. For
example, shippers of highly perishable products such as flowers and fruits and very
high-dollar value cargos are willing to pay the substantially higher air freight rates. There has
been discussion that cargos such as automobiles may have cost factors other than
transportation which result in air transportation being in a competitive position. To evaluate
this possibility, transportation cost data have been obtained for automobiles originating in
Japan and terminating in Chicago and are presented in Table V-17.
The data presented in Table V-17 were estimated in the following manner:
1 The transportation cost by ship of $120.00 is based on the 1.2 miles per ton/mile
for a containership as presented in Table V-12. This tends to overstate the cost since a high
speed type containership would probably not be used to transport automobiles.
IV-127
CENTS/AVAIL. TON MILE
COMBINATION CARRIERS
@ ALL CARGO CARRIERS
45 50 55 60 65 70 75
FIRST YEAR OF SERVICE
From New Dimensions in Air Commerce
Lockheed Georgia Company
HISTORICAL TON MILE COSTS (U.S. OPERATORS DIRECT COSTS)
FIGURE V-4
IV-128
BILLIONS OF TON MILES
NORTH
ATLANTIC
1965 1970 1975 1980
From New Dimensions in Air Commerce
Lockheed Georgia Company
FREE WORLD AIR CARGO BY TRADE AREA
FIGURE V-5
IV-129
TABLE V-17
COMPARISON OF OCEAN AND AIR SHIPMENT COSTS
AUTOMOBILES FROM YOKOHAMA TO CHICAGO
Cost Per Automobile
Ocean Super
Cost Item Shipping Aircraft
Transportation costs
Preparation for transport
Delivery to major transport
Major transportation
Loading
Shipping cost
Unloading
Insurance
Damage and pilferage
Delivery to distributor warehouse
Delivery to dealer
Total transportation
Possession costs
Storage at warehouse
Warehouse inventory carrying cost
In-transit inventory carrying cost
Total possession costs
Service costs
Lost sales
Manufacturer
Dealer
Total service costs
Total cost of distribution
NOTES:
T Assumed same for both.
2 included in shipping cost.
IV-130
2. The shipping cost by super-aircraft is based on a cost per statute mile of $7.00 for
an L-500 with a capacity to carry 106 automobiles. In a similar manner to the ship, it was
assumed that the aircraft would have a backhaul cargo.
3. The remaining costs were obtained from the Lockheed-Georgia Company, in an
pamphlet entitled “Distribution of Imported Cars.†It is difficult to estimate many of these
costs or to evaluate the estimates that have been made but since they have been prepared by
a manufacturer of super-aircraft, it was assumed that they were not unreasonably low. Based
on the assumptions made, it should be noted that the cost by super-aircraft is significantly
higher than by ship.
For the purposes of evaluating the potential diversion of traffic from a canal to aircraft,
Table V-18 presents a description of cargos with a value between $1,000 — $2,000 per long
ton and over $2,000 per long ton. These cargoes were selected as being of such a value as to
represent potential cargo for aircraft. The two major commodities are automobiles,
previously evaluated, and small shipments. The total traffic shown in Table V-18
represented 4% of FY 1967 commodities transiting the Panama Canal. The carrying cost of
inventory with a cost of $2,000 a ton using a cost of capital of 10% is approximately $17
per month. Obviously, cost factors in addition to high value and reduced in-transit time for
a cargo must be present to overcome the substantial cost differential between air and ship
freight.
Based on the foregoing presentation, it is concluded that although air freight will
experience considerable growth in the future it is not a significant limiting factor on the ability
of a canal to either maintain the present level of tolls or to increase tolls substantially.
Non-transportation Alternatives
The foregoing discussion evaluated the transportation alternatives for the commodities
that could use a sea-level canal. Other than transportation alternatives, there are available
the following possibilities which could limit the use of a canal: (1) alternate sources and
markets, (2) alternate shipping services, (3) alternate resource development.
It is a conclusion of the study that alternate transportation is the most reliable measure
of the sensitivity of a sea-level canal to tolls. However, it is recognized that other alternatives
cannot be ignored. The principal obstacle to their evaluation is that they are difficult, if not
impossible, to quantify other than on a purely judgmental basis.
The only evaluation available on these other alternatives was made by SRI in its 1967
study for the Panama Canal Company. SRI concluded that such alternatives would permit
the Panama Canal to increase tolls in a range of 100 to 150 percent to maximize its revenue,
except for the following commodities:
1. Bananas — It was concluded that this commodity is very sensitive to tolls increases
because alternative sources are available or could be readily developed on the Caribbean side
of the canal.
2. Bauxite and alumina — It was concluded that bauxite and alumina are limited to
tolls increases of 50% because of the alternative sources in the Pacific basin.
3. Scrap metal — It was concluded that scrap metal was very sensitive to tolls
increases because of alternative sources as well as the use of pig iron as a substitute.
4. Sulphur — It was concluded that sulphur is limited to tolls increases of 50%
because of alternative sources.
IV-131
TABLE V-18
HIGH VALUE/TON COMMODITIES USING PANAMA CANAL
FY 1967
(000 Long Tons of Cargo)
$1,000 — $2,000/Ton
Commodity
Food
Meat preparations
Butter fat
Tobacco
Crude materials
Wool
Synthetic fibers
Other
Manufactured goods
by material
Articles of rubber
Special fabrics
Articles of textiles
Copper metal
Tools
Other
Machinery & transport
equipment
Agriculture machines
Metal working machines
Electric distribution
equipment
Passenger cars
Trucks
Vehicle parts
Other
Misc. manufactured articles
Furniture
Other
Long
Over $2,000/Ton
Commodity
Uranium
Chemicals
Medicinal products
Explosives
Other
Manufactured goods
by material
Textile yarn
Cotton fabrics
Other fabrics
Carpets
Metal containers
Other
Machinery & transport
equipment
Power machines
Textile machines
Special industrial
machines
Machines, not classified
Communication equip.
Electric-machines,
not classified
Other
Misc. manufactured articles
Clothing
Footwear
Toys
Other
Cargo unclassified of
individual shipments
less than 5 tons each
IV-132
Those commodities identified as being sensitive to other than transportation
alternatives constitute a minor percentage of the total traffic of the existing Panama Canal.
In addition, evaluation of non-transportation alternatives presents such difficulties in
measurement as to place serious question as to its validity. As an example of the difficulty
in evaluating such alternatives, the matter of alternative resource development can be briefly
examined. Most commodities are available in many places in the world, and their
movements over the long term can be expected to be selective, based on the least cost
alternatives. In selecting which development is to occur, such matters as the existence of
inland transportation systems, the distance between the source and water transportation,
and the politics and the tax laws of the host country need to be considered. The importance
of these matters in terms of cost and risk are so overwhelming as to make the matter of
canal tolls almost insignificant. Canal tolls could only be the determining factor in that
theoretical instance in which the conditions of two developments were approximately equal.
For the aforementioned reasons, it has been concluded that non-transportation
alternatives cannot be evaluated as a limiting factor for a sea-level canal to collect tolls at
some future date.
Availability of Alternatives Varies Over Time
In the short-term there is little that shippers and ship operators can do in response to a
tolls increase. This is because they are committed to existing ships, schedules, routes,
location of resources, and other factors. However, in the long term all the alternatives to the
use of the canal become available. For example, larger and additional numbers of ships can
be built, new contracts arranged, alternate resources developed, and other arrangements
made. The important consideration in the evaluation of a sea-level canal is the long-term
effect.
There can be short-term responses to tolls that vary significantly from long-term
responses. This is because in the short term, decisions are often made based on the
out-of-pocket effects on costs and revenues rather than the long-term effect. There are two
types of short-term responses as follows:
1. Out-of-pocket Costs: If a ship owner has an excess of ships available at a particular
moment, he may evaluate the use of a canal based on his out-of-pocket costs. The
out-of-pocket costs of operating a ship may only be its fuel because even labor costs are
sometimes fixed by long-term contract.
2. Opportunity Costs: If a ship owner is temporarily short of ships and has the
opportunity for additional revenue, he may be willing to pay substantially higher tolls for
the purpose of saving time.
Neither the out-of-pocket nor the opportunity cost comparisons are relevant to an
evaluation of the long-range potential of tolls for a sea-level canal. Short-range considera-
tions may have an effect for short periods, but they are impossible to forecast over a long
period.
Tolls Structure
Synopsis
The matter of a tolls structure is essentially the question of “Who pays?†with
consideration also given to “Why?†This section of the report will examine factors which
IV-133
will be relevant to a sea-level canal in selecting an appropriate system of tolls assessment for
the purpose of obtaining the required level of revenues to cover its costs.
There are, of course, two viewpoints regarding a tolls structure: (1) the financial effect
on a sea-level canal, and (2) financial effect on the users. It is intended that only the former
problem will be evaluated. However, recognition will be given to the need for evaluating the
latter before a change is made.
There is a traditional method of assessing ships for the use of ship facilities which
includes the existing Panama Canal tolls system. The adoption of this traditional approach
would have the advantage of being well known and accepted and thus perhaps subject to the
least amount of controversy. The traditional method has applicability for a sea-level canal if
tolls rates remain substantially the same as present Panama Canal rates. However, as
discussed previously, even at present rates some differentiation of tolls charges may be
necessary to retain traffic that moves in huge quantities.
If it is decided that an increase in the level of tolls is necessary, then consideration of an
alternate system of tolls is particularly appropriate. The previous part of this Chapter
described how tolls that a user is willing to pay cannot be greater than the benefit accruing
to it by the use of the canal. As tolls are increased, it is necessary for a tolls system to
identify with greater precision the extent of the benefit to each class of user. The absolute
maximum revenue could theoretically be obtained from a system that collected from each
user a different toll based on its benefit in using the canal. Such a system can exist in theory
only since it would be impractical to administer. The maximum tolls system in terms of
revenue production is one that would most accurately identify the benefits to all users while
being practical to administer. Consideration also needs to be given to the marginal direct
cost of rendering the services since this should establish the minimum level for a tolls charge.
The administration of a sea-level canal may be required to obtain a higher level of tolls
or to respond to new technology which is effectively competing for traffic. A pricing
structure which would provide the necessary flexibility so that traffic could be retained is a
marginal cost pricing system. Using such a system the administration could set rates not
higher than the value of service and not lower than the direct marginal cost of providing
service. If permitted to use such a pricing structure, this would provide the greatest
assurance for the financial success of a sea-level canal.
The Tonnage Principle
Ships are universally assigned values referred to as “tonnage†which is expressed as both
a gross and net quantity. Theoretically, the gross tonnage represents the cubic size of a ship
from which are deducted spaces dedicated to the propulsion of a ship to arrive at net
tonnage. The principal deductions include spaces dedicated for the engine and related fuel
facilities, crew quarters and safety equipment. Each ton is equivalent to 100 cubic feet.
Thus, when a ship is referred to as being 50,000 net registered tons the expression has
nothing to do with weight but rather only with the ruler.
The principles. underlying tonnage were first promulgated by the Englishman George
Moorsom in 1854. Although these principles are universally accepted, their application
because of the adoption of unique measurement rules varies considerably from country to
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country and between the Panama and Suez Canals. This variation requires each ship to
maintain separate certificates of measurement for the Panama and Suez Canals in addition
to its national tonnage. The national tonnage, also referred to as registered tonnage, is
determined under the measurement rules of the country where the ship is registered and
whose flag it flies.
A ship’s national tonnage is generally used for the application of safety rules and the
assessment of charges against ships including such items as registration taxes, port charges,
tug services, and pilotage. Both gross and net tonnage are used as a basis for these charges
with little consistency among the countries of the world. In addition, both the Panama and
Suez Canals charge ships based on tonnage developed under their own rules.
Tonnage As An Economic Value
The determination of ship tonnage is normally the province of naval architects in that it
is based on the engineering features of ships. Although the principles of ship tonnage are
very easily described and understood, the actual application of rules of measurement
represents a fairly substantial undertaking involving interpretation of numerous rules and
regulations. In its most basic form, ship tonnage is nothing more than taking a ruler and
measuring the internal cube of a ship.
Although it is usually thought of as a matter pertaining to physical characteristics,
tonnage is of primary economic importance. The tonnage values assigned ships are used as a
basis for distributing the costs of maintaining ship facilities of the world. Tonnage provides
an answer to the question of how to distribute the burden of costs among the users of the
facilities. As such, it represents an economic value of primary importance to ship owners.
Panama Canal System
The present method of tolls assessment for the Panama Canal was placed in effect at the
time of its opening in 1914 and was developed by studies completed in 1913 by Emery R.
Johnson, Special Commissioner on Panama Canal Traffic and Tolls. Both the system and
rate of tolls placed in effect at the opening of the canal have remained basically unchanged.
As described in Chapter II, the current rate for commercial ships is 90¢ a net ton for laden
ships and 72¢ a ton for ships in ballast, i.e., empty.
Both the method of tolls assessment and the level of rates for the Panama Canal are
established by statute. Regarding rates the statute provides that the rates be established at a
level to recover specific costs. Such costs include all costs of operating the Panama Canal,
interest on the U.S. investment at the current average cost to the U.S. Treasury of its bonds
outstanding, and depreciation. However, no depreciation provision is made for the costs
incurred in excavating the original channels and harbors. The law limits rates so that they
can neither be higher nor lower than needed to recover the specified costs.
Emery R. Johnson, in his work for the Panama Canal, concluded that it needed its own
set of tonnage rules for the following reasons: (1) the national rules of tonnage
measurement were not uniform, and (2) the Suez Canal system was not as perfect as
Johnson would have liked it to be. The Panama Canal has maintained its own set of
IV-135
measurement rules from the outset of its existence to assure equal treatment of like ships
which transit the Panama Canal.
Universal Tonnage System
The existence of various rules of measurement by the canals and nations of the world,
although all applying the same principle, has always been a source of concern to the
maritime nations and industry. For example, the United Kingdom’s Board of Trade in 1862
took a position strongly favoring a universal system. Emery R. Johnson in his work for the
Panama Canal hoped that the Suez and Panama Canal rules would be unified to provide a
basis for a universal system. After World War II the continental European countries
developed a new system referred to as the Oslo Rules and hoped that this would provide a
basis for a universal system. In the past all these attempts have met with failure.
In 1960 the Inter-Governmental Maritime Consultative Organization (IMCO), an agency
of the United Nations, started work on a universal system. A subcommittee of IMCO
worked for nine years considering various proposals. Although there was general recognition
regarding the desirability of one system, various interests urged that such a universal system
incorporate features of particular advantage to them. This entire effort culminated with the
International Tonnage Conference, 1969, which was convened in London. After approxi-
mately one month’s work this conference, which included representatives of all the principal
maritime nations of the world, proposed a universal system. The successful implementation
of this proposed system requires acceptance by nations representing at least two thirds of
the world’s existing ship tonnage through their usual governmental action. In the case of the
U.S. this would require a two-third’s vote of the U.S. Senate since this represents an
international treaty.
If the Panama Canal were to adopt the universal system, it would not represent a major
change in its basis for assessing tolls but a continuation of the traditional approach.
The Effect of the Panama Canal System
As previously described, the present Panama Canal tolls system assesses ships based on
their internal cubic capacity. Generally, this has a close approximation to the cubic capacity
of the ship for carrying cargo. The closest approximation is achieved for tankers. An
example of a ship type where the system does not produce a close approximation is
container ships. The unused spaces among the containers and between the containers and
the hull are included in net tonnage. However, container ships usually carry significant
amounts of containers on deck and these are excluded from net tonnage under the theory
that they are not part of the ship.
Although the present system assesses charges only against ships, such charges can be
related to the ship’s laden cargo. The correlation is, of course, obvious when a ship is only
carrying one cargo but becomes difficult to estimate for general cargo ships carrying
hundreds of different cargos.
Although the present tolls rate for laden ships is a uniform 90¢ per cubic ton, the
resultant effective charge per long ton of cargo varies considerably because of the varying
density of different commodities as illustrated by the following table which assumes no
ballast return:
IV-136
Average Calculated
Toll Per Weight Tons Effective Toll
Panama Canal Per Cubic Per Long
Commodity Ton
Iron ore
Coal
Fuel oil
Corn
Automobiles
The weight tons per cubic ton used in this illustration are based on the average physical
characteristics of the commodity.
There are, of course, many additional factors which influence the effective tolls rates by
commodity . An obvious factor is the degree to which a ship is fully laden. If a ship is only
laden to the extent of one half of its capacity, obviously the effective tolls rate will be twice
what it would have been had the ship been laden to capacity, since the present tolls system
assesses tolls based on capacity and not cargo actually carried. Similarly, if a ship regularly
transits laden and must return in ballast, the effective toll rate per long ton is almost twice
that of a ship that has a backhaul cargo. Return ballast transits are common for tankers.
Another factor which is not quite so obvious is the effect of ship type on cargo carried
due to ship design. For example, an ore carrier is especially designed for iron ore and has
only the small cubic capacity required to carry the heavy iron ore. Conversely, the bulk
carrier has twice the cubic capacity, permitting it to also carry more bulky but less heavy
cargos such as coal and grains. Since a ship is assessed on cubic capacity, the bulk carrier is
charged twice the amount of tolls per weight ton of capacity.
The present system, because of the factors described above and due to other factors,
has the effect of producing a range of tolls rates by commodity. The table below illustrates
the average and range of effective tolls rates for typical commodities using the Panama Canal
based on studies made by the Panama Canal Company:
Tolls Per Long Ton
Commodity Lowest Highest Average
Manufactured
steel
Coal
Rice
Soybeans
Paper
Bananas
Automobiles
IV-137
Pricing Based on Cost
However structured, the rates must produce sufficient aggregate revenue to cover all
costs. The problem is how to best structure the rates to obtain the necessary revenues.
Possibly the most obvious basis for structuring rates, and the one which may appear to
be most fair, would be to refer to the cost of rendering the service. As an example of such a
pricing system reference can be made to the merchandise industry. If a customer spends
$1.00 for a grocery item at the supermarket, it is likely that 70¢.or more represents the
out-of-pocket cost of the item to the supermarket. Prices for which cost represents a high
percentage of the total are characterized as being based on “‘cost of service.â€
It is important to note that the relevant costs in a pricing decision are direct costs or
those that can be identified with the service rendered. The purchase cost of the item to the
supermarket is a direct cost and relevant to the pricing decision. In contrast, take the
example of a theater. The cost of producing a play cannot be identified with any one seat or
group of seats within the theater. Of course, various assumptions can be made on how to
relate such costs but these assumptions are arbitrary.
The construction cost of building a sea-level canal should be examined to determine if it
forms a basis for pricing. The most obvious possibility would be the cost incurred to render
transit service to large ships if conventional excavation methods are used. The incremental
construction costs to provide transit service for ships, say, above 100,000 DWT, should be
recovered from these ships or from an economic viewpoint such additional costs should not
be incurred. To the extent that such costs are unrecovered from the users for which the
costs were incurred the remaining users are required to pay this deficiency.
Other than construction costs, the other source of cost data for a pricing decision for a
sea-level canal would be the operating costs. Those operating costs which directly relate to a
particular type of service or type of ship should be assessed to the user receiving the service.
The existing Panama Canal has only a small percentage of operating costs which can be so
related. It is likely that a sea-level canal would, if anything, have a lower percentage.
It is probable that cost data will provide little basis for structuring tolls for a sea-level
canal. Although incremental construction costs should provide a guide based on projections
of large ship use of the sea-level canal, there is probably little likelihood that these users
would be willing to pay the resultant heavy tolls charges. The fact that such large ships
should pay a substantially higher toll is academic if the value of service rendered (such as the
cost to the ship of taking an alternative route) is less.
Pricing Based on Value of Service
The value of the service rendered establishes the ceiling on prices. If a proposed toll
charge exceeds such value, the commodity and ship will cease to use the sea-level canal.
Differentiating prices on the basis of the value of service received can be justified.
Commodities and ships with little opportunity to divert from the sea-level canal can be
charged much higher tolls since the value of service received is also high. Conversely, traffic
with economic alternatives to the use of the canal are receiving a lesser benefit or value of
service and thus the toll charge should be lower. A previous part of this Chapter discussed in
detail the measurement of value of service based on such alternatives as ship routing, ship
size and pipelines.
IV-138
There is often a misunderstanding of the difference between a toll based on value of
service and value of cargo. Ad valorem is another description for a value of cargo basis. The
fact that cargo has high value may justify higher tolls based on such standards as fairness but
this does not mean that the cargo is more limited in its alternatives to the use of a sea-level
canal. Shippers of low value phosphate rock may have limited opportunity to divert from
the canal and thus would be willing to pay substantially higher tolls than would be shippers
of higher value bananas with several alternatives available.
Marginal Pricing
Previous sections of this report discussed cost of service and value of service as a basis
for pricing. This section will combine the two concepts into what is referred to as marginal
pricing.
Each ship transiting the canal should pay as a minimum an amount equal to the direct
costs of rendering service. In addition, each transit should make a contribution toward the
fixed operating and sunk investment costs of the canal. The total charge cannot exceed the
value of service (benefit received) or the demand for the service will disappear. Such a
concept is referred to as marginal pricing.
A business or financial undertaking with a high level of sunk investment and/or fixed
operating costs is one in which the marginal pricing concept is most applicable. These, of
course, are the cost characteristics of the sea-level canal. The following data are assumed to
illustrate the concept.
Traffic Analysis
Present Tolls
Total
Ship Type Transits Per-transit
$ 600 $600,000
2,000 200,000
Total Revenue $800,000
Regarding the opportunity to increase tolls, assume that 100 of the small ship transits
and 20 of the large ships would not be willing to pay any additional tolls; i.e., a tolls
increase would result in a loss of the traffic. Further, assume that increases of 100% can be
made on the remaining traffic or 900 of the small ships and 80 of the large ships.
IV-139
Total Annual Canal Costs
Fixed costs —
Interest $550,000
Investment recovery 100,000
Fixed operating 70,000
$720,000
Marginal costs —
Small ships ($50 transit) $ 50,000
Large ships ($300 transit) 30,000
$ 80,000
Total Costs $800,000
Assume that a 25% increase in revenue is required to meet expected increased costs or a
revenue objective of $200,000 after all present expenses. Further, assume that as a matter of
equity an across-the-board increase is made. This would result in the loss of 100 ($60,000)
small ship transits and 20 ($40,000) large ship transits that were sensitive to any tolls
increase, a total of $100,000 of revenue before the increase, less $11,000 in marginal costs,
or a net loss of $89,000. To make up for this loss in traffic and produce a net increase in
revenue of 25% would require that the remaining transits must absorb an additional increase
in tolls. The less sensitive traffic would thus have their tolls increased a total of $289,000 or
41%.
Assume that rather than an across-the-board increase a selective rise is made based on
traffic sensitivity. The sensitive traffic is assigned no increase and the entire additional
$200,000 is absorbed by the less sensitive traffic. This results in a 29% increase to the less
sensitive traffic.
The foregoing example indicates that if a canal is in competition with alternatives, has a
high level of sunk and fixed operating costs, and low marginal costs, a marginal pricing
system is beneficial both to the canal and users. So long as any traffic is covering more than
its marginal costs, there is no financial justification to take action which results in losing
such traffic. In fact, a canal should attempt to attract all possible traffic willing to pay tolls
that exceed to any extent the marginal cost of providing service.
Although marginal pricing may be unique in the maritime industry, it is commonplace
both in other forms of transportation and in other industries. An outstanding example of
the application of the marginal pricing concept is the substantially lower evening and
weekend telephone long-distance rates charged by the Bell Telephone System.
The essential but difficult determination under a marginal pricing system is the
determination of value of service. This may be best measured by commodity, ship route, a
combination of both, ship size, or possibly some other basis. The selection of a parameter
should be made on the basis of the one that most accurately measures value of service and
provides a system that is practical to administer. To a substantial degree, value of service
measurement requires the application of judgment. Admittedly, it may be difficult to make
IV-140
these judgments, but such difficulties should not preclude the application of sound
principles.
It should be recognized that opposition to a marginal pricing system could develop. The
basis for such opposition could be based on the discriminatory aspects as well as the
difficulty in measuring value of service previously discussed. Arguments of discrimination
will be put forth by those interests which must pay the higher rates. Depending on the type
of canal administration that has been established, the political pressures brought to bear on
behalf of various interests for lower rates may be difficult to treat. In the case of telephone
prices previously cited, there has been little difficulty justifying them because the reducttons
went to the “right†groups; i.e., the general public receives the lower rate rather than the
businessman.
At existing levels of tolls the traditional tolls structure as represented by the Panama
Canal or proposed universal tonnage system may be appropriate. However, even at existing
levels of tolls some differentiation in charges may be necessary for traffic that can use huge
ships. If additional levels of revenue are necessary, it is fairly certain that a different tolls
system will be required to retain the traffic, and the system that is most likely to assure the
financial success of the sea-level canal would be marginal pricing. By such a system the canal
administration would have a vehicle by which to respond to competition as it developed
from'such sources as new technology. With its low level of marginal costs, there is little
traffic from which the canal would not financially benefit by attracting.
Administrative Feasibility
In designing a tolls structure, simplicity and acceptability are desirable attributes. Rate
structures should be easy to understand and enable the canal administration to administer
them currently and impartially. In this regard, it is desirable to minimize the number of rate
elements and to select rate elements which identify meaningful service features.
Traditional tonnage systems have a long history of acceptability and are reasonably easy
to administer. Undoubtedly, a marginal pricing system would be more difficult but such a
system could be administered on a reasonable basis if the number of commodity or other
classifications were limited. The number of classifications required should be determined at
the time of a decision to implement a marginal pricing system. If some large user such as
crude oil could be lost to an alternate, possibly only two rates of toll would be required:
one for crude oil, and a second for all other traffic.
It should be possible to construct a tolls structure based on the principles of marginal
pricing that is administratively feasible. In support of this conclusion, it may be desirable to
illustrate the type of structure that is contemplated. The basic charge against the ship would
be set at a level to recover from each transiting ship the marginal cost of providing transit
service. The traditional ship tonnage basis could possibly be used for this purpose. The
second component of the toll would be a charge of varying rates depending on the
alternatives of that commodity or ship to the use of that canal. Assuming that commodity
would be the most appropriate measure of the value of the service, Table V-19 illustrates the
type of commodity classification that may be established. In an attempt to indicate the
degree of administrative difficulty associated with this type of tolls structure, Table V-19
indicates for Fiscal Year 1967 the percent of the commodity classification which transited
the canal on ships carrying only that single commodity. It should be noted that for most
IV-141
TABLE V-19
SUMMARY OF MAJOR COMMODITY MOVEMENTS
THROUGH PANAMA CANAL
FISCAL YEAR 1967
(000 Long Tons)
Long Tons
Percent
Single Commodity
Commodity
Crude Oil
Petroleum Products
Coal
Iron Ore
Sugar
Bananas
Coarse grain
Soybeans
Lumber
Alumina/Bauxite
Phosphate Rock
Wheat
Scrap Metal
Rice
Wood Pulp and Paper
Nitrogenous Products
Sulfur
Chemicals
Manufactures of Iron and Steel
Motor Vehicles
Non-ferrous Ores
All Others
Note: ‘Percent of total long tons of commodity classification transiting the Panama
Canal in ships which are laden with that single commodity.
commodity classifications the preponderance of the tonnage moved in single ship lots,
minimizing the administrative effort associated with such a commodity related system.
Such a system would require a certain level of verification to insure accurate reporting
of commodity and other data to the administration. Although requiring some effort, this
could be done on a basis acceptable to both the user and administration.
Effect on the User
Prior to a change in tolls structure, serious consideration would need to be directed to
the matter of impact on the user. The most significant difficulty regarding structuring of
IV-142
tolls from the user’s viewpoint is the question of distribution of burden. This problem
develops if the level of tolls is above the direct cost of rendering service but below the value
of service received. Under these circumstances, what relative share of the total costs of
operating a canal should each user bear? Of course, each user will argue that his share should
be lower. There are also such questions as the rich nations versus the poor. Where tolls place
a burden on commodities from less developed nations, the exporters will maintain that their
tolls burden should be least. Because of the many unknowns regarding the circumstances in
which an administration will find itself when a sea-level canal is opened, it would be
premature to speculate on a proper basis for distributing the burden. Accordingly, no
findings regarding this matter have been reached.
There are additional considerations with which a canal administration would need to be
concerned in selecting a tolls structure. There is, for example, the question of minimum
impact of change. Most of the traffic for the sea-level canal will have previously used the
existing Panama Canal. The rate structure then in existence for the Panama Canal will need
to be considered. Whenever pricing systems are changed, it is usually desirable to minimize
the extent of the change being made.
IV-143
IV-144
Chapter VI
CONCLUSIONS
The following are the major conclusions derived from this study:
1. Potential Isthmian canal total tonnage will increase at a diminishing rate from the
6.5 percent annual growth rate experienced by the present Panama Canal in the last 20
years.
2. Potential Isthmian canal total tonnage in the year 2000 is expected to be about
357 million tons, increasing to about 778 million tons in the year 2040. However, wide
variations from these levels are possible over so long a forecast period.
3. The potential demands on the present Panama Canal will exceed its yearly capacity
of 26,800 transits* in the period between 1989 and 2000.
4. The maximum number of potential annual transits forecast for the year 2000 is
approximately 38,400. Maximum transit requirements for the year 2040, based on a
conservative cargo tonnage growthestimate subsequent to the year 2000, are about 68,000.
A slightly higher tonnage growth rate during the period 2000 to 2040, which is a distinct.
possibility, could result in approximately 100,000 transits by the year 2040.
5. Acanal incapable of accommodating ships of 200,000 DWT or greater will not be
fully competitive with such large ships on alternate routes and hence will not attract all
potential canal traffic. A canal that could transit 250,000 DWT ships could accommodate all
the ships projected for the world fleet in the year 2000 that would be likely to use an
Isthmian canal. The minimum upper size limit that should be considered for initial
construction is 150,000 DWT.
6. A pricing system for tolls designed to meet the competition of alternatives to the
canal will attract the most traffic and generate the greatest revenues in a future canal of any
type, lock or sea level. If necessary, selective increases averaging 50 percent over present
tolls can be applied without markedly affecting traffic growth. Such increases would
produce gross revenues approximately 40 percent greater than those attainable under the
present tolls system.
*Estimated ultimate physical operating capacity, with major improvements to include augmentation of water supply.
IV-145
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Appendix 1
METHODOLOGY FOR COMPUTATION OF PROJECTED
CANAL TRAFFIC AND REVENUES
1. Definitions
a. Total Potential Tons: The total annual tonnage (long tons) that potentially would
transit through an unrestricted Isthmian canal; projected to Year 2040, based on Panama
Canal experience and other considerations.
b. Cargo Mix: Percentages of the total tonnage carried on each of the three major
ship types—tank ships, dry bulk carriers (including dry bulk, combination dry bulk, and ore
ships), and freighters (including general cargo, passenger, refrigerator, and container ships).
c. Ship Efficiency: The ratio of total cargo tonnage (long tons) to total deadweight
tons (DWT); computed for each ship type, and based on Panama Canal experience for Fiscal
Year 1968 and the first half of Fiscal Year 1969.
d. Average DWT: The average size ship (DWT) which would use an Isthmian canal;
computed for each of the three ship types from world fleet size distribution projections,
Panama Canal experience, and adjusted for the maximum size ship which could transit the
canal option being considered.
e. Average Toll per Ton: The average toll per long ton of cargo; computed by
weighting, in proportion to the cargo-mix, the average toll per ton of cargo for each type
ship determined from current Panama Canal experience.
2. Computations
a. Total Transits Required
Tanker cargo mix
l i = Total potential t 9k, aL,
Total transits otal potential tons x Encenen wen)
Bulker cargo mix if Freighter cargo mix
(Efficiency)(Ave DWT) (Efficiency )(Ave DWT)
b. Total Tons Transmitted
Total tons=1) total potential tons, when total transits
required are less than transit capacity of
canal option considered.
or k ;
; Transit capacity
=2) Total potential tons x —2—
Total transits required
When total transits required are greater than
transit capacity of the canal option considered.
IV-A-1
c. Total Annual Revenue
Total revenue = (Total tons transited) (Average toll per ton)
3. Explanation
The five basic variables required for the computation of projected canal revenues are
defined above (Sec. 1). These variables are related as shown in Sect. 2, to compute total
annual revenue. These computations are repeated for landmark years through the period of
interest. By changing the values assigned to the five variables, within judgmental constraints,
the sensitivity of the revenue projections to these variables can be examined, and a range of
reasonable revenue projections can be obtained for each canal option considered. A detailed
explanation of the method for selection of the numerical values of the five variables is given
in Section 4. Section 5 presents the results of this selection process. Section 6 gives the
results of the computations, using the selected values for the five variables.
4. Determination of Total Potential Tons, Cargo Mix, Ship Efficiency, Average DWT,
and Average Toll per Ton
a. Total Potential Tons: The total potential tonnage forecast is based primarily on
an analysis of the historical relationship between time series growth of commercial cargo
tonnage passing through the Panama Canal and the Gross Product growth of the geographic
regions that contributed to this traffic. Projections were developed by correlation of
selected regional cargo tonnage exports and forecasts of regional product growth. Special
consideration was given to forecasts of economic growth of Japan and projections of canal
traffic that might originate from that country. For further details on the potential tonnage
forecast, see Appendix 3, Isthmian Canal Potential Tonnage Forecast. A lower tonnage
forecast was developed under different assumptions and is presented for alternative revenue
planning purposes.
b. Cargo Mix: The shipping fleet has been divided into three general classes: tankers,
dry bulkers, and freighters. The three classes of ships are examined separately because they
operate with different efficiencies, size distributions and average tolls per ton of cargo. A
percentage of the total tonnage transited by ship type, defined here as the “‘cargo mixâ€â€™, is
assigned for each ship type. The values for the early years of the revenue computations are
based on current Panama Canal experience. The future cargo mixes selected are based on
Panama Canal cargo trends and projections of future world fleet composition by type of
vessel.
Cc: Ship Efficiency: Ship efficiency is defined for these purposes as the ratio of
cargo tons transited through the canal per DWT of vessel. It relates ship cargo capacity
(DWT) to transits in ballast, partially laden transits, and cargo density. Values for ship
efficiency were computed from current Panama Canal experience. Freighters have a
relatively low efficiency, since they carry a light density cargo as compared to the bulk
product carriers. Tankers now have a lower efficiency than the dry bulkers because tankers
make a large number of their transits in ballast.
Panama Canal records cargo tons and Panama Canal tons (PCT) but not DWT.
Therefore a relation between PCT and DWT was required to compute efficiency in Panama
Canal traffic. The DWT for certain ships transiting Panama Canal in 1966 were obtained.
IV-A-2
From plots of DWT vs PCT, a general relationship was obtained for each type of ship. The
results generally showed (with some exceptions for minor ship classes that 1 PCT = 2 DWT.
d. Average DWT: The cargo tonnage was assumed to be carried on average size
ships (DWT) for each of the three classes of ships. The size of this average ship was
determined from Panama Canal experience (FY 1968 and the first half of FY 1969) and its
relationship to the world fleet, the canal configuration being considered (i.e., the maximum
size ship that can pass the canal), and projections of world fleet size distribution.
The following idealized case will illustrate the procedure. The Maritime Adminstration
has provided projections of the size distribution of the world fleet. Figure A-1-1 shows a
hypothetical projection as a plot of DWT vs. Percent of ships with greater DWT. The average
world fleet ship is indicated. The average size of this ship passing through the Panama Canal
currently is shown at level “a’’.
If it is assumed that the future Isthmian Canal traffic composition will continue in its
current relationship to the world fleet composition, the average size canal ship will grow
along line a-b-c. If the relationship is assumed to change, then the percentile of the world
fleet size distribution in which the average canal ship lies will change. For instance, a
modernized, large capacity canal may attract a greater percentage of large ships than does
the current canal. In this case, the growth of the average ship size using the canal would
follow a trend such as a-b-c.
One further modifying variable must be considered: maximum ship size that can pass
through the canal. Various maximum ship sizes are considered to define and compare canal
configurations. The largest ship size limitation does not affect average size of the relatively
small freighters but it does affect the larger dry bulkers and tankers. Figure A1-2 illustrates
the latter case. As before, the current size of the average ship passing through the Panama
Canal is shown at Level “a’’. The growth represented by the line a-b-c again assumes that the
average ship through the canal is in a constant percentile of that part of the world fleet
smaller than the largest ship which could pass through the canal option under consideration.
e. Average Toll per Ton: The average toll per ton of cargo was computed by first
considering the three types of ships separately. Tolls are based on Panama Canal Tons
(PCT)—a measure of revenue producing space. (1 PCT =100 cubic feet of actual earning
capacity.) Because dry bulkers fill cargo space with dense cargo, they pay less tolls per ton
of cargo than do freighters with their lighter cargoes. Tankers pay an intermediate rate
because of their large number of ballast transits. Once the average toll per ton of cargo was
computed from 1968 to 1969 canal experience for each type ship, an overall canal average
was obtained by weighting each ship’s rate by the corresponding cargo mix percentage.
5. Results—Total Potential Tons, Cargo Mix, Ship Efficiency, Average DWT, Average Toll
per Ton
a. General: Prior to FY 1968, the Panama Canal commercial ocean traffic experience
was recorded under four ship types—tankers, ore ships, passenger ships, and general cargo
ships. Beginning in FY 1968, the ship classes were further subdivided to report separately
combination carriers, container cargo ships, dry bulk carriers, and refrigerated cargo ships, in
addition to ore, passenger, general cargo, and tank ships. These subdivisions allowed
identification for the first time of the role of the three general ship classes established by the
Maritime Administration and used in this study—freighters, dry bulkers, and tankers. All
IV-A-3
NO MAXIMUM SHIP SIZE LIMIT
AVERAGE ISTHMIAN CANAL SHIP
AVERAGE WORLD FLEET SHIP
AVG. PANAMA
CANAL SHIP ‘68-9
0 50 100
% OF SHIPS WITH A GREATER DWT
FIGUE A1-1
WITH MAXIMUM SIZE SHIP LIMIT
MAXIMUM SHIP THROUGH CANAL
DWT
AVERAGE ISTHMIAN CANAL SHIP
AVG. PANAMA =
CANAL SHIP ‘68-9
% OF SHIPS WITH A GREATER DWT
FIGURE A1-2
IV-A-4
traffic other than commercial ocean traffic identified by these three ship classes has been
included in the freighter class. On the average this other traffic has the same operating
characteristics as do the commercial ocean freighters (i.e., similar efficiency, average DWT
and average toll per ton). The analysis of cargo mix, ship efficiency, average DWT, and
average toll per ton is thus largely based on FY 1968 and the first half of FY 1969 Panama
Canal experience. The results of the 1968-1969 analysis for these four variables are given in
Table Al-1. For the purposes of comparison, the records of commercial ocean traffic for
1951-67 were examined for two ship classes, general cargo ships and tankers. The results are
presented in Table A1-2.
b. Total Potential Tons: Total potential cargo tonnages were taken from the
potential tonnage forecast as described in Chapter IV and Appendix 3. This forecast was
made by projecting forward a regression analysis of Panama Canal tonnage vs. Regional GNP
back to 1950. A high correlation was established between regional product and the tonnage
passing through the canal from the fifteen regions comprising the world. In the case of
Japan, the present rate of growth was diminished to 5% in the year 2000 in anticipation of
the diminishing of the present phenomenal rate of growth of its economy. To each value of
the commercial ocean tonnage forecast, two million long tons were added as anticipated,
peacetime government cargo. Lower cargo tonnages for alternative lower revenue planning
purposes were taken from the low tonnage forecast described in Chapter IV. This forecast
was made by projecting separate forecasts of Japan trade and all other commercial cargo,
with an additional allowance for unforseeable trends. The two forecasts are summarized in
Table A1-3.
c. Cargo Mix: The recent history of Panama Canal commercial ocean traffic cargo
mix is plotted on Figure Al-3. The tank ship tonnage has shown a slow growth to a high of
22% of the total transited in 1965-67 with a 19 year average of 17%. The 1968-69 average
of 17% has been selected for the projection of tanker cargo mix, and is assumed to remain
constant through the period of interest. Figure A1-3 also shows the steady large role of the
general cargo ship class until the dry bulker—freighter classification was first made in 1968.
Two possible cargo mix projections were examined. The “46% Freighter Mixâ€â€™ assumes that
current trends of the mix will continue throughout the future period. This is illustrated in
Figure Al-4. The “25% Freighter Mix†shown in Figure A1-5 assumes a decline in the share
of tonnage carried in freighters and a corresponding increase in that carried in bulkers.
Assignment of an increase to tankers need not be considered since such an increase makes
no significant difference in the end result of transits and revenues. The two cargo mix
projections are recorded in Table Al-4. The implication of the 46% mix is a relatively large
number of total transits as compared to the 25% mix.
d. Ship Efficiency: A Panama Canal Ton (PCT) was related to a deadweight ton
(DWT) from a listing of 1966 Panama Canal traffic by ship name, type, PCT and DWT. The
data are plotted in Figure A1-6. The relationship of PCT/DWT obtained showed that 1 PCT
= 2 DWT for all major ship classes. (Exceptions: Passenger ships, 1 PCT = .6 DWT; container
ships, 1 PCT = 1.1 DWT.)
Using the above relationships for PCT/DWT and current Panama Canal records of PCT
and total cargo tonnage, the ship efficiencies listed in Tables Al-1 and Al-2 were computed.
The general cargo ship efficiency remained quite stable during the period 1951-67, with an
average of .51. The tanker efficiency varied between .4 and .6 as the relative number of
IV-A-5
TABLE A1-1
PANAMA CANAL EXPERIENCE FY 1968 AND
FIRST HALF FY 1969
FY 1969 18 Month
Cargo Mix (%) FY 1968 (First Half) Average
Freighters 47 45 46
Bulkers 36 39 37
Tankers 17 16 17
Efficiency (Cargo Tons/DWT)
Freighters 41 41 41
Bulkers 70 73 wal
Tankers -50 47 49
Average DWT
Freighters 10,600 10,600 10,600
Bulkers 26,900 27,700 27,200
Tankers 17,800 18,000 17,900
Average Toll per Ton
Freighters $1.12 $1.12
Bulkers : .62 61
Tankers ; .87 .84
All Ships : 88 .88
NOTES: Bulkers are the dry bulk, combination dry bulk and ore ships
included in commercial ocean traffic. Tankers are the tank ships
included in commercial ocean traffic. Freighters are the general
cargo, passenger, refrigerator, and container ships included in
commercial ocean traffic, plus all other Panama Canal traffic not
considered as bulkers and tankers.
ballast transits changed, with an average value of .53 for 1951-69. Although the past 18
months average (.49) is below the 19 year average, it is well within the range of past
fluctuations, and has been assumed to prevail for the future projections. For freighters and
dry bulkers, the last 18 month averages were also used—.41 for freighters and .71 for
bulkers. The long term stability of the general cargo ship classification gives confidence to
these values.
e. Average DWT for a Sea-Level Canal: Maritime Administration world fleet size
distribution projections for each of three types of ships are plotted in Figures A1-7, 8 and 9.
The world fleet average ship size is projected to grow along line WF. The current average
Panama Canal ship for each ship type is indicated at level a-a. These average sizes were
obtained from 1968-69 Panama Canal data and recorded in Table Al-1. Figures Al-10,
Al-11, and Al-12 expand the portion of the previous figures in the range of the average
canal ship. Again WF = World Fleet Average Ship and a-a is the present Panama Canal
average. The growth of the average sea-level canal ship is indicated on the figures and is
recorded in Table Al-S.
IV-A-6
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IV-A-7
TABLE A1-3
TOTAL POTENTIAL TONNAGE
(Long Tons of Cargo)
Tons (Millions)
Forecast 1980 1990 2000 2010 2020 2030
Potential Tonnage 157) 239), 357) 150389916435 99743
Low Tonnage 171 218 254 290 325 363
TABLE A1-4
CARGO MIX
Cargo Mix Percentage of Total Potential Cargo Tons
1980 1990 2000 2010 2020
“46% Freighter Mix’’
Freighters
Bulkers
Tankers
“25% Freighter Mixâ€â€™
Freighters
Bulkers
Tankers
In the case of freighters, the present average canal freighter falls in the 33rd percentile
of the world fleet distribution. This relationship is assumed to continue and the growth of
the average freighter size in a sea-level canal will be along line a-b, Figure Al-10. The
maximum size limitations of the Panama Canal and any sea-level canal are not expected to
restrain this growth.
The present average Panama Canal bulker is in the 16th percentile of the world bulker
fleet size distribution. It was assumed that the average size of the bulker would grow along
the 16th percentile line of that part of the world fleet smaller than the design ship (i.e.,
65,000 DWT for the present canal, up to 250,000 DWT for the largest canal). Thus, the
growth of the average size bulker which would pass through a sea-level canal is expected to
be modified by the maximum size ship that can be accommodated by the canal. With the
present lock canal size limit of 65,000 DWT, the bulker average size will grow along line a-f,
Figure Al-11. This growth is less than that for a larger canal, such as for a 250,000 DWT
maximum ship case shown at a-b.
IV-A-8
PERCENT OF TONNAGE
PERCENT OF TONNAGE
GENERAL
TANKERS
1955 1960 1965
CARGO MIX-PANAMA CANAL
FIGURE A1-3
100
80
60
1970 2000 2020 2040
40
20
PERCENT OF TONNAGE
CARGO MIX 46% FREIGHTERS
+60 FIGURE A1-4
25%
80
60
40
20
0
1970 2000 2020 2040
CARGO MIX 25% FREIGHTERS
FIGURE A1-5
IV-A-9
BEE RHEE SEE
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30
20
TANKERS
10
20
10
PANAMA CANAL TONS (THOUSANDS)
20
1. General Cargo Ships
10
2. Container Ships
3. Passenger Ships
FREIGHTERS
SC CEE ees
IV-A-10
PANAMA CANAL TONS vs. DWT
FIGURE A1-6
DWT x 10?
WORLD FLEET SIZE DISTRIBUTION
FREIGHTERS
(WF = World Fleet Average DWT:
a’-a = 68-69 Panama Canal Average
Projection by Marad 1968)
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FIGURE A1-7
IV-A-11
100
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FIGURE A1-8
WORLD FLEET SIZE DISTRIBUTION DRY BULKERS
IV-A-12
World Fleet Average DWT;
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WORLD FLEET SIZE DISTRIBUTION TANKERS
40
FIGURE A1-9
20
IV-A-13
â€
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x<
=
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a
a’ a = 68-69 Panama Canal Ave. Freighter DWT
a-b = Projection of Isthmian Canal Ave. Freighter DWT
WF = Projection of World Fleet Ave. Freighter DWT
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WORLD FLEET SIZE EXPANDED DISTRIBUTION FREIGHTERS
FIGURE A1-10
IV-A-14
DWT x 10?
68-69 Panama Canal Ave. Bulker DWT
Projection of World Fleet Ave. Bulker DWT
Projections of Isthmian Canal Ave. Bulker DWT
a-b = 250,000 DWT Maximum Bulker Size
a-c = 200,000 DWT Maximum Bulker Size
a-d = 150,000 DWT Maximum Bulker Size
a-e = 100,000 DWT Maximum Bulker Size
a-f= 65,000 DWT Maximum Bulker Size
=|
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WORLD FLEET SIZE EXPANDED DISTRIBUTION
DRY BULKERS
FIGURE A1-11
IV-A-15
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LA
ZF
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a’-a 68-69 Panama Canal Ave. Tanker DWT
Projection of World eae ve. a ker DWT
Projections of Isthmian Canal Ave. ker r DWT
a-b
a-c =
a-d =
a-e = nee (000 DWT Maximum Tanker Size
a-f = 65,000 DWT Maximum Tanker Size
% OF SHIPS WITH A GREATER DWT
WORLD FLEET SIZE EXPANDED DISTRIBUTION TANKERS
FIGURE A1-12
IV-A-16
The same effect on growth is seen for tankers in Figure Al-12. However, in this case the
present average canal tankers is in the 65th percentile. Since it is expected that the future
average canal tanker will at least approach the median of that part of the world tanker fleet
which can pass through the various canal options, the percentile in which the average canal
tanker is placed was changed from 65% in 1970, to 60% in 1980, 55% in 1990, and to 50%
in 2000 and thereafter.
f. Average Toll per Ton of Cargo: Tables Al-1 and Al-2 record the average toll per
ton of cargo for each of the three types of ships from Panama Canal experience. The average
toll for the canal as a whole is obtained by weighting the individual averages by the cargo
mix percentage. Table Al-6 gives the results of these computations for the two cargo mixes
considered.
6. Results—Computation of Transits Required and Projected Revenues
a. General: The computations of the transit requirements and projected revenues
were carried out for the potential tonnage forecast, using the two cargo mixes selected, and
for the low tonnage forecast with only the 46% freighter mix. For each combination of
tonnage projection and cargo mix, the cargo was assumed to be carried on ships whose size
was successively established at 65,000, 100,000, 150,000, 200,000 and 250,000 DWT. The
65,000 DWT limit corresponds to the present Panama Canal. A 26,800 annual transit
capacity was used for this case. For the remaining maximum ship sizes no transit capacity
was applied. Once the specific canal options and their transit capacities are established, these
computations will be repeated to obtain revenue projections for each option.
b. Transit Requirements: Table Al-7 records the transit requirements for the various
cases examined in connection with the potential tonnage forecast. These data are plotted in
Figure Al-13. The top of each band is for the 65,000 DWT maximum ship size, and the
bottom of the band is the 250,000 DWT case, with the remaining cases falling within the
band. Transit requirements were also computed for the low tonnage forecast and are
recorded in Table Al-7 and plotted with dotted lines in Figure Al-13. The low tonnage
forecast assumes, among other factors, that a great volume of dry bulk cargoes in the higher
potential tonnage forecast will not move through an interoceanic canal. Therefore, only the
46% freighter cargo mix is considered for purposes of transit requirements.
The following observations can be made concerning these data:
(1) The maximum ship size to be accommodated makes little difference in the
number of transits required.
(2) The present Panama Canal transit capacity of 26,800 annual transits is
reached between 1989 and 2000 for all cases considered in connection with the potential
tonnage forecast; in the case of the low tonnage forecast, it is not reached until about the
year 1997.
(3) The cargo mix has considerable effect on transit requirements.
c. Revenue: Potential revenue for the cases considered assuming no _ transit
restrictions is plotted in Figure Al-14. The following comments apply to Figure Al-14.
(1) Revenue is not a function of maximum ship size accommodated, assuming
the potential cargo will be loaded on ships that will go through the canal.
(2) The revenue is largely determined by the tonnage growth, and is less
dependent on cargo mix than are the transit requirements.
IV-A-17
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POTENTIAL
TONNAGE FORECAST
46% Freighter Cargo Mix
25% Freighter Cargo Mix
LOW
TONNAGE FORECAST
46% Freighter Cargo
Mix Only
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1970 1980 1990 2000 2010 2020 2030 2040
FISCAL YEARS
KEY:
= Potential Tonnage Forec’t.
= = == Low Tonnage Forecast
ISTHMIAN CANAL TRANSIT PROJECTIONS
FIGURE A1-13
IV-A-20
MILLIONS OF DOLLARS
1970 1980 1990 2000 2010 2020 2030 2040
FISCAL YEARS
POTENTIAL REVENUES
ISTHMIAN CANAL WITH NO TRANSIT CAPACITY LIMITATIONS
BASED ON CURRENT PANAMA CANAL RATES
FIGURE A1-14
IV-A-21
d. Detailed Computations: The detailed computations are recorded in Tables A1-8
through A1-25. Tables Al-8 through Al-13 use the potential tonnage forecast and 46%
freighter cargo mix. Tables Al-14 through Al-19 use the same tonnages but use the 25%
freighter cargo mix. Tables Al-20 through A1-25 use the low tonnage forecast and 46%
freighter cargo mix. The following is an explanation of the table line items:
(1) The heading lists maximum ship size and maximum transit capacity (zero is
used for no capacity limit).
(2) Line 1-Projected potential tonnage—using the potential
tonnage forecast
(3) Lines 2-4—Cargo Mix—using either the 46% Freighter Mix
or the 25% mix.
(4) Lines 5-7—Tons by ship type. (Lines 1x2=5; 1x3=6; 1x4=7).
(5) Lines 8-10—Ship Efficiencies.
(6) Lines 11-13—Total DWT by ship type.
(Lines 5/8=11; 6/9=12; 7/10=13).
(7) Line 14—Total DWT all Ship (Lines 11+12+13).
(8) Lines 15-17—Average DWT by ship type.
(9) Lines 18-20—Transits by ship type (Lines 11/15=18;
12/16=19; 13/17=20).
(10) Line 21—Total transits (Lines 18+19+20).
(11) Line 22—Average DWT per transit (line 14/21).
(12) Line 23—Average cargo tons per transit (Line 1/21)
(13) Line 24—Average efficiency (Line 23/22)
(14) Line 25—Tons transited. (Line 1 when line 21 is less than
maximum transit capacity; Line 1x (max. transits)/
Line 21 otherwise).
(15) Line 26—Average toll per ton of cargo.
(16) Line 27—Tota!l Revenue (Line 25x26).
IV-A-22
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IV-A-33
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IV-A-34
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IV-A-35
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IV-A-36
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IV-A-37
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IV-A-38
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IV-A-39
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IV-A-40
Appendix 2
ANALYSIS OF PANAMA CANAL CARGO
TONNAGE HISTORY
Purpose
The purpose of this Appendix is to provide additional, detailed data on Panama Canal
cargo tonnage history and present the summary results of an analysis of these data. The
requirements for new Isthmian canal facilities are based on projected increases in cargo
tonnage that potentially would transit the canal. Such projections are based not only on the
future outlook but on past experience. The tonnage history of the Panama Canal was
therefore examined to identify trends in the growth of cargo tonnage. Certain important
components of the total were examined to determine their individual growth rates and their
contribution to the whole.
Data and Discussion
Tonnage data were derived from annual reports of the Panama Canal Company. Some
of these data have already been presented in the summary discussion of Isthmian canal trade
and the potential cargo tonnage forecast in Chapter IV and are not repeated in this
Appendix. For reference purposes the following are pertinent:
Table IV-7: Panama Canal Cargo Tonnage by
Major Category, 1947 — 1969
Figure [V-2: Cargo Trends in Panama Canal
Table IV-9: Major Trade Routes, Panama Canal Commercial
Ocean Traffic, Selected Fiscal Years 1947 — 1969
Tables IV-10 Comparison of Commercial Cargo Shipments
and IV-11: to and from Asia with Other Traffic
Table IV-15: Role of Japan in Panama Canal Traffic,
Fiscal Years 1950 — 1969
An examination of the flow of Panama Canal traffic since World War II indicates that some
fifteen “regional areas†serve as both origins and destinations for cargo shipments through
the canal. For purposes of this portion of the analysis of Isthmian canal trade the “regional
IV-A-41
areas†are identified as follows in order of importance with respect to volume of cargo by
origin and destination, respectively, in Fiscal Year 1969:
Origin Destination
East Coast USA Japan
West Coast South America East Coast USA
East Coast South America Europe
Japan West Coast USA
West Indies West Coast South America
Europe Asia (less Japan)
West Coast Canada
West Coast USA
Asia (less Japan)
West Coast Central America/Mexico
Oceania
West Coast Canada
Oceania West Indies
West Coast Central East Coast South America
America/Mexico
East Coast Central East Coast Canada
America/Mexico
East Coast Canada East Coast Central America/Mexico
Africa Africa
Asia (Middle East) Asia (Middle East)
Table A2-1 summarizes the flow of cargo tonnage from origin to destination for
selected years during the period 1947—1969. It shows that since the mid-1950’s the greatest
increase by far in cargo tonnage shipments in any one direction is from the East Coast
United States to Japan, increasing from approximately 5 million long tons of cargo in 1955
to over 27 million tons in 1969 (a growth rate of 13 per cent during this period). Cargo
tonnage shipments from the East Coast United States to other Far East destinations have
also demonstrated a high rate of growth during this same period (approximately 9.2 per
cent). Shipments from most other origins to Japan while not in the same volume of those
originating from East Coast United States ports, have also demonstrated a marked increase.
Eastbound tonnage from Japan and other Far East origins to the East Coast United States
have grown considerably in the past decade.
Although Japan and the other Far East destinations have exercised the greatest
influence on the overall growth of canal traffic with respect to markets for cargo shipments,
this has not been to the exclusion of significant growth along other trade routes. For
example, cargoes originating in East Coast South American ports have shown a marked
increase since 1950 in movements to the West Coast United States, West Coast Central
America, and West Coast South America. Cargo shipments from the West Indies to the West
Coast United States have increased significantly.
Table A2-2 summarizes commercial cargo movements to all destinations involved in
canal traffic for Fiscal Years 1959 through 1969. The most outstanding feature is the
remarkable increase in cargo movements (primarily from the East Coast United States) to
Japan. It should also be noted that there has been an overall increase in traffic to virtually
all other destinations.
IV-A-42
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Statistical Analysis
Method
The method of least squares was applied to the Panama Canal cargo tonnage data for
the period 1947—1969. The 1969 data is the annual rate based on the first 6 months record.
The least squares method establishes the equation of a curve such that the sum of the
squares of the deviations of the data points from the curve is a minimum. This curve is the
“best fitting curve.†A straight line having this characteristic is called the least square line. A
parabola having this property is the least square parabola.
A computer was used for the actual calculations. The middle year of the time period
examined, 1958, was designated as zero. The units of the abscissa were one year, plus and
minus from the zero point. This “‘xâ€â€™ scale removes the arbitrary magnitude of the calendar
year so that the sum of the ‘“‘x’s†is zero. The ordinate was the logarithm of the cargo
tonnage for each year. The Log Y, where Y = cargo tons, was used because the growth of
the tonnage appears to approximate an exponential function. The logarithm of an
exponential function is a straight line, and the least squares method can be applied most
usefully to approximately linear data.
Three possible curves were fitted to the data:
Degree of Curvature Equation Curve
1 Log Y = agta,x Straight Line
y} Log Y = agta;xtayx2 Parabola or Quadratic
3 Log Y = agtax+ax2+a3x> Cubic
The output of the program printed the coefficients in the above equations, the actual
tonnage, the estimated tonnage (i.e., the tons determined by the equation of the curve), and
the annual growth rate. The sum of the squares of the residuals (deviations) was indicated.
The curve with the smallest sum was the “best fit.â€â€™ The growth rates were computed based
on the estimated tons. Plots of the growth rates result in a constant rate of growth for the
first degree line, a constant change of rate of growth for the second degree curve, and a
quadratic curve for the rate of growth for the third degree curve.
Results
Total Cargo Tonnage
Total cargo tonnage has been increasing at an average annual growth rate of
approximately 6.5 per cent. The third degree curve, which gave the best fit, showed an
increasing growth rate at the end points of the time period, reflecting the effect of hostilities
in Southeast Asia and continued Japanese economic expansion for the most recent years.
Commercial Cargo Tonnage
This tonnage has been increasing at a rate commensurate with that of the total cargo
tonnage. Growth rate curves of the first, second, and third degree all very closely fit the
observed data. The first degree curve indicated an average annual growth rate of 6.7 per
IV-A-53
cent. The second and third degree curves indicated growth rates varying from 10.9% to 5.7%
with extrapolation to succeeding years giving widely varying results.
Tanker Cargo Tonnage
The data points are somewhat more scattered in the early years, but the growth rate
trend is clearly declining, with an actual decrease in tons recorded in 1968.
Total Cargo Less Tanker Cargo Tonnage
To examine the effect on the total cargo tonnage by the declining rate of growth of
tanker traffic, the tanker tonnage was subtracted from the total and the least squares
method applied to the remainder. As expected, total cargo tonnage showed a more rapid
growth in recent years after subtracting the declining tanker trade.
Total Commercial Cargo Less Tanker Cargo Tonnage
The growth rate of the commercial traffic less the tanker cargo tons was examined.
Again, the remainder of the tonnage showed a higher growth rate in later years after
deduction of the declining tanker traffic.
Role of Trade to and from Japan
In 1969, trade with Japan amounted to 40% of Commercial Ocean Cargo tonnage. The
growth of this trade was examined by dividing Commercial Ocean Cargo into two categories,
“To and From Japan,†and “‘All Other.’ The Japan traffic has shown a more rapid growth
than the remainder of the commercial traffic. The rate of growth of the Japan traffic
appears to be declining, although the percentage of the total is increasing rapidly. The rate
of growth of the Commercial Traffic less Japan is low, due to the declining tanker
component.
U.S. Intercoastal
U.S. intercoastal tonnage has demonstrated a negative growth rate (i.e., a declining
tonnage).
U.S. to Foreign
This component of Commercial Ocean Traffic has shown an increasing growth rate in
recent years, largely because of the previously identified increasing trade to Japan from the
U.S. East Coast.
Foreign to US.
The growth rate of the U.S. import trade within the Commercial Ocean Traffic appears
to be declining.
Foreign to Foreign
The Japan trade holds a less prominent position in the Foreign to Foreign category than
in the U.S. to Foreign.
IV-A-54
Conclusions
The results of this analysis do not appear to point to a particular trend which is a best
predictor for projection of future canal traffic. The analysis does provide some useful insight
and guidelines for establishment of trend projections. As is to be expected, examination of
various components of the total results in the finding of some increasing trends and others
decreasing. One major increasing growth component was identified—Japan trade. U.S.
Government traffic fell in this category through 1968. However, in 1969 it experienced an
absolute decline owing to the scaling down of hostilities in Southeast Asia. The tanker
tonnage component appears to be declining.
The large increasing rates of growth indicated by the experience of recent years cannot
be expected to continue. Even a continuation of a constant rate of growth of approximately
6.5 per cent leads to cargo tonnages of such magnitude in future years that such projections
lose their value for determination of canal capacity requirements and anticipated revenues.
If it is assumed that the tanker trade will continue to decrease or at best remain constant,
that the scaling down of the Vietnam War will continue to result in decreasing U.S.
Government traffic, and that the growth of Japan trade will diminish, then a declining
growth rate is a reasonable projection. The rate of such decline will be determined by the
actual performance and timing of the foregoing trends plus any growth effects from other
trade routes and commodities.
IV-A-55
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Appendix 3
ISTHMIAN CANAL POTENTIAL TONNAGE FORECAST
Introduction and Summary
This Appendix presents the results of an economic analysis that develops an estimate of
potential tonnage demand for commercial ocean traffic through an Isthmian interoceanic
canal. The study examines the historical relationship between time series growth of
commercial tonnage in the Panama Canal traffic to several combinations of independent
variables to establish an acceptable correlation for a mathematical equation that serves as a
forecasting device.
Total commercial ocean traffic is expected to develop to about 338 to 409 million long
tons of cargo by the year 2000 reflecting a downward shift in annual growth to about half
that of the post-World War II experience. Forecast results are treated in detail in the
“Conclusion†section. This estimate of potential cargo tonnage results from computations
related to Tonnage Series 4, which appears in Table A3-3 and is reflected in Tonnage Series
4-III in Figure A3-1.
Prefatory Comment
The quality of any forecast depends on an understanding of the factors of causality that
operate to expand and constrain growth. The history of past Panama Canal forecasts of
traffic growth is replete with attempts to link tonnage generation to assumed independent
variables; results have been generally inadequate.
The classical approach utilizes a technique of commodity analysis termed disaggrega-
tion; here, the growth-maturation-stagnation cycles of commodities are employed to
develop a total of commodity tonnage through the Canal. Subsequent analysis has shown
that the influence of new commodity development not accounted for in disaggregation is
increasingly important in extended forecast years because existing commodity growth
generates proportionately less tonnage as it achieves the maturity phase of its cycle.
The obverse of this approach, called aggregation, involves the investigation of possible
relationships in macroeconomic variables that exhibit a statistically measurable link that can
be projected in the future (in an attempt to include the implications of enduring structural
characteristics that dominate the economy in the long run). Temporary changes resulting
from military emergencies, weather cycles and agriculture, business speculation and politics
can have sharp repercussions in the short run, but tend to wash out over an extended time
frame.
Aggregation, therefore, is not so much a forecast as a projection—of past enduring
relationships into the future. The quality of such a projection is dependent on the depth of
understanding of the relationship of the variables in the dynamics of the aggregation.
IV-A-57
The normal method employed to manipulate data in the aggregative technique is
statistical regression analysis. This measures the change in one variable against the change in
another to test the degree of correlation; the statistical validity is measured by the
correlation coefficient.!
The reader unfamiliar with such work may visualize this concept by the following
diagram:
Xx
where y is the dependent variable, and x is the independent variable; a curve passed through
the plot of the data points minimizes the distance between the points; the correlation
coefficient expresses the degree of fit of the curve.
Logically meaningful relationships, however, can only be proved empirically, i.e., in
common sense observation of real world events. It is theoretically possible to statistically
“explain†relationships between variables that have no logical link so long as their rates of
growth are accidentally harmonized. More importantly, this can occur with partially related
variables; good judgment, therefore, is necessary in the selection of inputs for this regression
technique.
The Investigation
The aggregation employed in this forecast is regional. Aggregation at the world level
would omit important developments in regional economic evolution; aggregation at the
national level would yield time series data characterized by perturbations unsuitable for
regression work.
Fifteen regions of economic activity were specified which aggregate the total of nations
that produce all Panama commercial ocean tonnage. Time series data from 1950 to 1967
were developed for each region consisting of (1) the regional product, (2) the per capita
product, and (3) tonnage exports through the Canal. Three scenarios were considered to be
of interest.
(1) Each region (considered as an origin) was related to each regional destination utilizing
the regional product and the per capita product as the independent variables; this
approach yielded 112 models.
(2) Each region (considered as an origin) was related to each regional destination utilizing
the regional products of both as the independent variables; this approach yielded 112
models.
1 The correlation coefficient is an indicator that determines how well the regression line fits the observed data.
IV-A-58
(3) Each region (considered as an origin) was related to all regional destinations utilizing
the regional product of the origin as the independent variable; this approach yielded
15 models.
The first study considered alternative (1). Regression analysis! was performed and 112
models were obtained with four independent variables; the models, in most cases, were
inadequate. The second study was identical to the first, except that two independent
variables were used. Although there appeared some improvement in the correlation
coefficients over the first, these 112 models were still inadequate. The third study
considered alternative (3) with one independent variable. Thirteen models had correlation
coefficients over .8 while two models (Asia Minor—Middle East and West Coast USA) were
inadequate.
A linear function (or straight line curve) was derived which exhibited a high correlation
coefficient, i.e., four of which are over .9 and the remainder (excepting Asia Minor—Middle
East and West Coast USA) over 0.80. The Asia Minor—Middle East series was recomputed
utilizing a shortened time series that omits perturbations apparently resulting from the
general economic dislocation arising from the Suez situation. The West Coast USA series
could undoubtedly be improved by increasing the complexity of the equation, but such an
approach would conflict with the logic of the forecast and would increase the likelihood of
error in estimating the growth of the independent variables. Moreover, the observation of
such a preponderance of valid statistical relationships derived from a single independent
variable is significant.
The resulting equations provide a mathematical forecasting device that allows the
analyst to vary the independent variable (i.e., the regional product) and to therefore derive a
new dependent variable (i.e., canal tonnage generated).
Table A3-1 presents the linear form and correlation coefficients. Tables A3-13 through
A3-42 present the historical data.
The regional product of each of the 15 economic “cells†was similarly subjected to
regression analysis to derive a forecast of regional product for each of the years from 1970
to 2000. In this case, the y-axis is occupied by the dependent variable, regional product, and
the x-axis by the independent variable, “time.†Introduction of a new “timeâ€... or year
yields a forecast of regional product.
The results exhibit high indexes of determination (which is a variant of the correlation
coefficient) in all six curve-types. The results of the best three fits were utilized as input
coefficients to develop alternate levels of tonnages. Tables A3-2 and A3-3 and Figure A3-1
1 A set of data points given in cartesian coordinates was fitted to six different curve types. The regression analysis
computes the coefficients A and B for the best fit in each case and gives the index and F-ratio for each fit enabling the
user to compare the fit of his points to each curve type. The curves fitted are expressed geometrically as follows:
1. Y=A+Bx 4. Y=A+B/x
2. Y=Ax® 5. Y = 1/(A + Bx)
3. Y = Ae®* 6. Y = x/(A + Bx)
the letter “‘e†stands for the base of the natural logarithm, 2.718... For a more complete reference to mathematical
formulation, see:Statistics in Research, 2nd Edition, by Bernard Ostle, Iowa State University Press, 1963, Chapter 8.
IV-A-59
TABLE A3-1
RESULTS OF THE THIRD STUDY
(Alternative (3): one independent variable, regional
product; one dependent variable, canal tonnage)
East Coast USA
East Coast Canada
East Coast Central America
West Indies
Europe
East Coast South America
Asia Minor — Middle East
Africa
West Coast USA
West Coast Canada
West Coast Central America
West Coast South America
Oceania
Japan
Asia (less Japan)
Correlation
Coefficient
B=8.28
A=-23055
B=3.8
A=532
B=4.5
A=517
B=82.0
A=-1188
B=.59
A=779
B=29.6
A=-8439
B=-3.8
A=238
B=1.09
A=-250
B=-.56
A=6917
B=28.
A=1351
B=6.5
A=-272
B=87.6
A=-153
B=8.1
A=233
B=4.9
A=-1273
B=6.4
A=439
IV-A-60
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IV-A-62
Fiscal
Year
2000
87793
92285
96952
101804
106850
112103
117574
123277
129225
135433
141917
148695
155784
163204
170978
179127
187677
196653
206085
216004
226441
237436
249023
261247
274152
287787
302206
317446
333628
350761
368936
388233
408738
TABLE A3-3
(000
112
(9.5-6.0)
88019
92531
97205
102051
107084
112304
117722
123349
129196
135268
141569
148119
154927
162008
169367
177026
184990
193246
201840
210776
220069
229736
239786
250236
261109
272411
284162
296380
309129
322384
335273
350487
365372
\ straight application of best coefficients.
21 thru V vary the Japan product growth rate as shown. However, the Japan growth rate is treated qualitatively
resulting from separate analysis. Additional Note: All tonnages employ curve (3) coefficients except West Indies,
East Coast South America which are (1).
SUsed as the potential tonnage forecast of this Study.
CARGO TONNAGE SERIES 4
Long Tons)
M28 Iv?
(9.5-5.0) (9.5-4.0)
88019 88019
92531 92521
97196 97186
102036 102017
107050 107005
112245 112171
117639 117521
123226 123059
129019 128799
135048 134734
141280 140883
147752 147247
154456 153829
161420 160641
168637 167686
176125 174973
183887 182545
191943 190370
200282 198430
208944 206793
217928 215434
227257 224390
236909 233636
246929 243219
257321 253137
268104 263581
279252 273990
290819 284973
302813 296345
315245 308115
328140 320270
341510 332852
355367 345875
IV-A-63
v2
(9.5-3.0)
88019
92516
97166
101973
106942
112078
117384
122863
128524
134377
140462
146669
lSsia9
159778
166662
173758
181099
188679
196504
204583
212915
221563
230456
239662
249158
258980
269114
279593
290441
301628
313205
325184
337575
1950
1955
TONNAGE SERIES 4-111 IS CONSIDERED
THE BEST ESTIMATE AND IS THE BASIS
OF THE POTENTIAL TONNAGE FORECAST
1960 1965 1970 1975 1980 1985 1990
Year
FORECAST OF ISTHMIAN CANAL TRAFFIC
FIGURE A3-1
IV-A-64
1995
500
400
300
200
100
2000
DIdSVYL NVADO IVIOYSWWOD SNOL NOITIIN
present the results. The indexes and equation coefficients for these three best fits are listed
in Table A3-66. It should be noted that in each tonnage forecast depicted in the results, the
forecast for Fiscal Years 1968 and 1969 is lower than the actual Panama Canal commercial
experience for these years (i.e., 96.5 million tons in 1968 and 101.4 million tons in 1969).
The devication of the forecast tonnage from the recent historical experience can be
understood by the fact that it (the forecast tonnage) represents, in fact, a curve which best
fits the entire historical series. Therefore, while the forecast does not achieve a best
approximation of the most recent years, it represents a judgment based on the entire
historical experiences since 1950. Consequently, one can conclude that the middle range
years of the forecast period up to the year 2000 (i.e., 1980-1990) would have the the greatest
probability of approximating the forecast in the same manner that the historical curve fits
all the data points.
The statistical measure of the tonnage-per-regional product growth for the 18-year
historical experience in each region is translated into new tonnage levels by introduction of
new coefficients in the linear equation, derived from regression of the regional product
series.
The Economic Assumptions
The predictive device is only as good as the assumption of continuity of this
relationship. This is really an average of different relationships through the observed period
although the high correlation in the linear form gives confidence in minimal deviation from
the average line. Nevertheless, evidence exists to suggest that the tonnage-per-regional
product shifts over time as economic maturation occurs.! This evolution warps the forecast
in an overstatement of tonnage (as almost all regions’ per capita levels are rising) insofar as
the rate of change downward accelerates above that experienced in the past.
The historical data series was selected from a period of world commerce unaffected by
world war; a necessary implication of this forecast is the assumption of no extraordinary
political—economic dislocation. Also, because the historical time series provides the basis
from which the future is extrapolated, marked changes in past relationships in trade patterns
and economic growth will distort the forecast. the potential development of oil deposits in
Northern Alaska is one example that could alter routes to refinery and market. Another is
the future economic growth of Japan.
Japanese Economic Growth
Japan’s economy set records for sustained economic growth through the | 8-year period
under consideration; at the same time, this country’s proportional contribution to Canal
commercial tonnage increased markedly (see Tables A3-7 through A3-10). An analysis of
these growth rates suggested adoption of a more empirically-oriented approach to the
forecasts of these series.
jJapan’s GNP, at the end of Fiscal Year 1971, is expected to total $200 billion, and
Japan will have consolidated its position as the third largest economy in the world. Over the
1A growth in regional product generates an increase in tonnage exports that transit a canal, but in a proportionately
smaller ratio as the per capita product rises. This may be explained by the implications of such an advance in industrial
maturity; vertical and horizontal domestic economic integration encourages internal satisfaction of economic industries
which characteristically promote dense-weight tonnage exports.
IV-A-65
past 10-year period, Japan has averaged an annual 14 percent increase in nominal GNP
(about 10 percent in real terms). Table A3-4 contains a summary of economic indicators
pertaining to Japan.
The main thrust of Japanese economic progress during the past decade has been
achieved through intensive domestic investment (particularly in plant and equipment)! to
exploit a rapidly expanding domestic market created through increases in real income and
low rate of population growth. Although the pattern is expected to continue for the short
range, eventual diminution in the surplus rural labor supply is expected to cause inflationary
pressures. Additionally, the long-range prospects for real product growth must consider the
critical limitation of land.
The historic advantages of technological advance (in an economic area characterized by
poverty and low levels of mechanization, low labor costs, and opportunities for exploitation
of markets such as the European Economic Community, European Free Trade Association,
and the U.S.) will probably not continue to propel the Japanese economic development
along past lines of growth.
The forecast of Japan’s economic development (and resulting implicit export tonnage
through a canal) contained in this study departs from the recent high levels of sustained
performance, and is instead reflective of such aforementioned institutional and economic
constraints expressed in performance levels exhibited by other mature island nations, e.g.,
Great Britain. For projections of Japan product growth and cargo tonnage growth, see
Tables A3-5 and A3-6.
Mainland China
The influence of Communist China on expansion of Isthmian canal tonnage depends on
the evolution of new political accommodation with the United States and on internal
economic development with respect to ability to export desired commodities in the
competitive market.
Most Government observers cautiously predict a thaw in our political relationship with
Mainland China over the next decade. Such a development would establish a framework
within which could exist a potential for bilateral trade. The economic realities of world
trade, however, could work to restrain development of tonnage trade with the United States
which remains the prime generator of Isthmian canal trade from China.
Little is known about the internal developments of China’s institutional evolution and
revolution; China watchers, nevertheless, conclude that ideological reforms attendant to
Chairman Mao’s “Great Leap Forward†caused serious damage to China’s economic
development in an attempt to supplant agriculture by heavy industry development as the
prime goal. These priorities were reversed again in the early 60’s but the steady economic
development which followed during the period 1962-1966 was again set back by Mao
Tse-tung’s “Cultural Revolution†1966-1969. A long range forecast of China’s world trade
potential is dependent on fundamental idealogical-economic trends which appear to be
reemphasizing agricultural development. Such a program would reinforce the present
! Private investment in plant and equipment increased as a percentage of GNP from 22.0 to 31.0 over the period 1966-69;
the level is about twice that of the United States. Foreign trade as a percentage of Japan’s GNP is only about 20
percent. This is less than half the level sustained by many advanced European. nations.
IV-A-66
dependence of China on Japan and Western Europe for supply of sophisticated industrial
equipment and would severely limit China’s ability to competitively enter the world trade
market with products attractive to the United States. American raw material import
requirements generally are satisfied by existing sources and exports are somewhat higher
priced than European counterparts.
Economic Forecast
A realignment of China’s economic priorities that emphasizes agricultural development
will probably result in a slow but steady rate of growth in gross national product; 3 per cent
annually has been chosen. However, continuation of a big population problem will probably
hold down the rate of growth in per capita GNP to about 1 per cent annually. The Canal
Tonnage/GNP ratio for China equalled 1.823 in the highly disruptive year of 1950; it has
since declined to .135 in 1967, principally by virtue of our economic boycott. Given
performances of the Canal/GNP ratio for other similarly placed regions, it is reasonable to
predicate a rise in this ratio to at least 5.0 over the next thirty years assuming
reestablishment of good relations. Results are summarized in Table A3-11. China’s Isthmian
canal tonnage would, therefore, increase from 11.8 thousand tons in 1967 to over 1 million
tons by year 2000 based on a total GNP of $241.9 billion, a per capita BNP of $139.6 and a
Tonnage/GNP ratio of 4.45.
Conclusion
Four series of cargo tonnage forecasts are presented.
The first three reflect the growth rates of tonnage resulting from introduction of
product coefficients developed by each of the three curve types. (Table A3-2).
The fourth reflects the growth rates of tonnage resulting from introduction of product
coefficients of the three curve types that exhibit the best correlation coefficient (Table
A3-3).
Five variants on this fourth series are presented: 1/straight application of best
correlation coefficients; 2/alteration of the Japan product forecast from the best curve fit of
9.5 per cent annually on an exponential line to 9.5 per cent annually declining to 6.0 per
cent; 3/alteration of the Japan product forecast to 9.5 per cent annually declining to 5.0 per
cent; 4/alteration of the Japan product forecast to 9.5 per cent annually declining to 4.0 per
cent; 5/alteration of the Japan product forecast to 9.5 per cent annually declining to 3.0 per
cent. For purposes of this forecast it was assumed that the product growth rate of 9.5 per
cent declining uniformly on an annual basis to 5.0% by the year 2000 was a reasonable
estimate of future Japan product growth.
An Extended Forecast
Little can be said about a forecast of Isthmian canal tonnage beyond the Twentieth
Century. The statistical forecasting device used in this Study has a limitation analogous to
that of a camera’s focal length—imprecise in the very short and very long ranges. Statistical
manipulation of economic data gives way to philosophical speculation in such extreme
cases.
From year 2000 to 2040, a curve of uniformly declining rate (or slope) was constructed
such that at year 2040 the rate of increase is zero per cent. The “bending down†of the rate
IV-A-67
of growth in this period resulted basically from inability to forecast world trends from 30 to
70 years into the future. The curve diminishing to zero per cent of growth at 2040 was
selected as a conservative growth estimate. the predicted tonnages are listed in Table A3-1 2.
The Data
No single source exists for a comprehensive GNP series by nation and sub-group over
the period required. Considerable data combination and manipulation was required to
develop a statistical series’ expressed in constant 1967 U.S. dollars; four documents,
however, provided the bulk of the material:
1) Gross National Product: Growth Rates and Trend Data by Region and Country, April
1969, A.I.D., U.S. Department of State.
2) Finance and Development quarterly No. 1, 1969, the I.M.F. and World Bank Group.
3) Statistical Yearbook, 1967...
4) Yearbook of National Accounts, 1967, both of the United Nations.
Cargo tonnage data were provided by the Panama Canal Company. Population
information came from a variety of sources with special reference to the Commerce
Department’s Bureau of the Census, Foreign Demographic Division. Information on growth
rates in Communist China relates to various State Department publications and two Senate
documents entitled Mainland China in the World Economy, Hearings, 1967 and Report,
1967.
1 East Coast USA: all states excepting Pacific and Pacific Northwest (GNP was divided by apportionment of the 1967
estimated population ratio); West Coast USA: Pacific and Pacific Northwest states (per capita product is assumed
identical for each coast); East Coast Canada: excludes British Columbia, Alberta, Saskatchewan, Manitoba
(apportionment of GNP was based on the estimated 1966 population); West Coast Canada: includes the above
mentioned provinces; East Coast Central America: Mexico, Panama, Costa Rica, Guatemala, Honduras, Nicaragua; West
Coast Central America is identical; West Indies: Puerto Rico, Cuba, Haiti, Dominican Republic, Jamaica,
Trinidad/Tobago, Barbados, Bahamas, Netherlands Antilles; Europe: all OECD countries; East Coast South America:
Argentina, Brazil, Colombia, Venezuela; Middle East: Israel, Lebanon, Syria, Cyprus; Africa: all nations on the
continent; West Coast South America: Chile, Colombia, Ecuador, Peru; Asia (less Japan): Indonesia, Taiwan, Hong
Kong, Philippines and both Koreas; Oceania: Australia and New Zealand; Japan: Japan.
IV-A-68
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IV-A-70
TABLE A3-5
JAPAN: PROJECTED PRODUCT GROWTH RATES
(Billions of Dollars)
9.5%* to 9.5%* to 9.5%* to 9.5%* to
6.0% 5.0% 4.0% 3.0%
121.49.5 121.4 9.5 121.49.5 121.4 9.5
132.9 9.4 132.9 9.4 132.7 9.3 132.6 9.2
145.2 9.3 145.0 9.2 144.8 9.1 144.4 8.9
158.4 9.1 158.1 9.0 157.7 8.9 156.8 8.6
2270950) 172.0 8.8 7 1BES: 169.8 8.3
188.0 8.9 186.8 8.6 185.3 8.3 183.4 8.0
204.4 8.7 202.7 8.5 200.3 8.1 197.5 7.7
222.0 8.6 219.5 8.3 2162729) 212.1 7.4
240.9 8.5 23723. 6m 232-301, 22ie Owen
261.1 8.4 256.6 8.0 250.2 7.5 242.9 6.9
282.5 8.2 276.6 7.8 268.5 7.3 259.1 6.7
305.4 8.1 297 Vieth 287.6 7.1 275.8 6.4
329.8 8.0 320.2 7.5 307.4 6.9 292291652
SOD toMPo 343.9 7.4 328.0 6.7 310.4 6.0
383.6 7.8 368.7 7.2 349.3 6.5 328.4 5.8
413.2 7.7 394.8 7.1 371.3 6.3 346.5 5.5
444.6 7.6 422.1 6.9 394.7 6.2 365.2 5.4
477.4 7.4 450.8 6.8 418.4 6.0 384.2 5.2
512.3 7.3 480.5 6.6 442.7 5.8 403.4 5.0
549.2 7.2 511.8 6.5 467.9 5.7 422.8 4.8
588.2 7.1 544.5 6.4 493.6 5.5 442.2 4.6
629.4 7.0 578.8 6.3 520.3 5.4 462.6 4.5
672.8 6.9 614.1 6.1 547.3 5.2 482.4 4.3
718.5 6.8 651.0 6.0 57DrSiol 502.7 4.2
766.7 6.7 689.4 5.9 604.0 5.0 522.8 4.0
817.3 6.6 729.4 5.8 633.0 4.8 543.2 3.9
870.4 6.5 770.2 5.6 662.8 4.7 563.3 3:7
926.1 6.4 812.6 5.5 693.3 4.6 583.5 3.6
985.4 6.4 856.5 5.4 724.5 4.5 604.0 3.5
1047.5 6.3 901.8 5.3 756.3 4.4 623.9 3.3
1112.4 6.2 948.7 5.2 788.1 4.2 643.9 3.2
1180.3 6.1 S9O7eln oe 820.4 4.1 663.9 3.1
1251.1 6.0 1046.9 5.0 853.2 4.0 683.8 3.0
* Average annual increase based on alternate percentage assumptions.
IV-A-71
TABLE A3-6
JAPAN: PROJECTION OF CARGO TONNAGE GROWTH
BASED ON HISTORICAL RELATIONSHIP BETWEEN
PRODUCT AND TONNAGE
(000 Long Tons)
Alternate Product Growth Rate Assumptions
TT IV
9.5-4.0% 9.5-3.0%
1Used in the forecast for tonnage originating in Japan.
IV-A-72
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IV-A-78
TABLE A3-12
AN EXTENDED PROJECTION OF COMMERCIAL
OCEAN CARGO TONNAGE FOR YEARS 2000 - 2040
Fiscal Long Tons Fiscal Long Tons
Year (Million) Year (Million)
355.367 2021 653.075
369.427 2022 665.001
383.669 2023 676.470
398.070 2024 687.450
412.609 2025 697.912
427.259 2026 707.824
441.997 2027 717.159
456.794 2028 725.890
471.624 2029 733.990
486.456 2030 741.437
501.261 2031 748.206
516.008 2032 754.279
530.666 2033 759.635
545.202 2034 764.259
559.583 2035 768.136
573.775 2036 771.253
587.745 2037 773.600
601.495 2038 775.170
614.883 2039 775.956
627.983 2040 775.956
640.725
IV-A-79
HISTORICAL DATA
(Tables A3-13 through A3-42)
IV-A-80
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CURVE ANALYSIS
15 REGIONS — 3 CURVE TYPES
TABLES 43 THROUGH 65
Note: Associated with each curve analysis is an index figure and a correlation coefficient.
Once a historical relationship has been established between the region’s product and cargo
tonnage, the index, which reflects a correlation between the region’s product and time, is
used to determine a forecast of product. The correlation coefficient is used to determine a
forecast of cargo tonnage.
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IV-A-155
Fiscal
Year
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
TABLE A3-65
ASIA (LESS JAPAN)
Curve: 3 Index: .995555 Corrl: .881
GNP Forecast
(1967 U.S.
Billion $)
$34.6
36.2
38.0
39.8
41.7
43.7
45.7
47.9
50.2
52.6
orl
577
60.4
63.3
66.3
69.5
72.8
76.2
Percent
Change
4.8
4.8
4.8
48
4.8
4.8
4.8
4.8
4.8
4.8
4.8
4.8
4.8
4.8
4.8
4.8
4.8
IV-A-156
Origin Cargo
Forecast
(000 Long Tons)
2653.5
2758.8
2869.2
2984.7
3105.8
3232.7
3365.5
3504.7
3650.5
3803.3
3963.3
4130.9
4306.5
4490.4
4683.1
4885.0
5096.5
5318.0
TABLE A3-65 (Cont’d.)
ASIA (LESS JAPAN)
Curve: 3 Index: .995555 Corrl: .881
GNP Forecast Origin Cargo
Fiscal (1967 U.S. Percent Forecast
Year Billion $) Change (000 Long Tons)
$ 79.9 4.8 5550.0
83.7 4.8 5793.1
87.6 4.8 6047.8
91.8 4.8 6314.5
96.2 4.8 6594.0
100.7 4.8 6886.7
105.5 4.8 7193.4
110.6 4.8 7514.6
115.8 4.8 7851.1
ies 4.8 8203.7
127.1 4.8 8573.0
133.1 4.8 8959.8
139.5 4.8 9365.1
146.1 4.8 9789.6
153.1 48 10234.4
IV-A-157
TABLE A3-66
INDEXES AND EQUATION COEFFICIENTS
FOR REGIONAL PRODUCT VS. TIME
Curve Type Index A
West Indies 1 .995561 2.975163 .315480
2 .926643 2.773667 .359228
3 .979622 3.385464 .055477
East Coast USA 1 .931883 325.452941 15.343550
2 .792589 313.948521 .193595
3 .960518 342.603778 .032010
Europe 1 .989162 225.116993 17.855521
2 .875949 215.291518 .285921
3 .997958 248.303594 .045838
East Coast Canada 1 .962808 17.512418 eS
2 .859973 16.705058 .253069
3 .981640 18.946311 .040611
East Coast Central
America 1 .973394 8.145752 1.006295
2 .858997 8.249667 .355673
3 .996763 9.802556 .057546
East Coast South
America 1 .993088 23.531373 1.861610
2 .881609 22.287505 .289983
3 .992185 25.826647 .046206
Asia Minor —
Middle East 1 .959059 1.839216 .241486
2 .833157 1.912783 .357850
3 .990402 2.260092 .058602
Africa 1 .980297 21.669281 1.293292
2 .844849 20.775662 .233249
3 .996996 23.193547 .038056
IV-A-158
TABLE A3-66
INDEXES AND EQUATION COEFFICIENTS
FOR REGIONAL PRODUCT VS. TIME (Cont’d.)
Curve Type Index
West Coast USA .968456 46.817647 4.098142
.864502 45.476841 .298190
.990883 52.699722 .047950
West Coast Canada .939109 5.825490 .437668
.806685 5.705498 .263576
.969837 6.436578 .043408
West Coast Central 973394 8.145752 1.006295
America .858997 8.249667 .355673
.996763 9.802556 .057546
West Coast South .978017 6.367974 .483488
America .86 1060 6.130538 .274248
SOO DIS 7.008477 .044282
Oceania .969782 12.811111 .878947
.821438 12.430203 .251489
.988992 13.941702 .041447
.93891 1 8.710608 4.880392
.829771 16.120274 a5 2579)
.993740 20.790857 .090828
Asia (less Japan) .968921 12.796078 1.065325
.848461 12.491271 .285590
.995555 14.311547 .046465
Curve Type (1) one is expressed as Y=A+ Bx
Curve Type (2) two as Y = Ax
Curve Type (3) three as Y = AeBX
(The letter ‘‘e’’ stands for the base of the natural logarithm, 2.718...)
IV-A-159
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Appendix 4
HARBOR AND PORT DEVELOPMENT
Introduction
The increasing volume of production of raw materials to meet the demands of growing
markets and increasing distances of transportation have already brought about great
increases in the unit size of carriers and renovation and extensions of shipbuilding facilities.
The next evolution to be expected is the renovation and modernization of port and harbor
facilities, the construction of offshore facilities, and the deepening of waterways to
accommodate these larger carriers. The economies of scale of the super ships in the
transport of dry bulk and liquid cargoes are such that the provision of terminal facilities for
them near the sources and destinations of such cargoes is inevitable. This trend to deep ports
is already well advanced throughout the world, and the pressures are mounting in the United
States for greater activity in this field.
Transport Cost Implications
The following Figure A4-1 illustrates the startling economies in the unit cost of
transporting petroleum made possible by an increase in vessel scale. A specific example of
transport savings made possible by supertankers is the recently initiated movement of bulk
petroleum from the Persian Gulf to Bantry Bay, Ireland, by the way of the Cape of Good
Hope using 326,000 DWT vessels. Although the route is 13,000 miles longer than the Suez
Canal route, the operating cost per barrel of petroleum is estimated to be half the operating
cost of transporting the petroleum through the Suez Canal in 50,000 DWT ships. The
economies of large scale ships are applicable to the dry bulker and freighter classes but to a
lesser scale because of the smaller ships in these classes. For example, Japan is now using
150,000 DWT bulk carriers to transport combined coal and ore cargoes from the United
States and Brazil to Japan via the Cape of Good Hope at a considerable savings over the cost
of transport of these same commodities in 65,000 DWT ships via the much shorter Panama
Canal route. The savings are estimated to be 30% greater than the cost of Panama Canal
tolls, indicating that economies of scale rather than tolls are the determinant in the choice
of the longer route.
Harbors of the World
Japan’s plans for future harbor construction include projects for establishing 4 or 5
central terminal stations for tankers, each one of which apparently would serve a region.
Tankers up to 300,000 DWT are considered. To receive coal and ore for the Japanese steel
industry which is located mostly with direct access to the sea, the country plans to have 27
IV-A-161
COST OF TRANSPORTATION-%
100
90
UNIT COST OF PETROLEUM
TRANSPORTATION BY OCEAN TANKER
AS VESSEL SIZE INCREASES
80
70
60
50
40
30
10 20 30 40 50 60 70 80 90 100 110
TANKER SIZE, DEADWEIGHT TONS (000)
SOURCE: DEPARTMENT OF ARMY, CORPS OF ENGINEERS, TOTAL UNIT OPERATING
COSTS OF AT-2 TANKER, INCLUDING CAPITAL COSTS, WERE TAKEN AS
EQUIVALENT TO 100 PERCENT. COSTS FOR LARGER VESSELS ARE RELATED
TO THIS AS A PERCENT OF THE T-2 COSTS.
RELATIONSHIP OF TRANSPORT OPERATING COST TO TANKER SIZE
FIGURE A4-1
IV-A-162
special wharves to accommodate carriers of 50,000 DWT and more. Five would be capable of
receiving vessels of 110,000 to 130,000 DWT.
A transshipment station for Europe’s Atlantic seaboard is in operation at Bantry Bay,
Ireland. The station receives 326,000 DWT tankers loaded in the Persian Gulf. Existing
facilities in the loading area were updated and reconstructed to accommodate this trade.
Plans have been announced by the Mersey Docks and Harbour Board for the
construction of an artificial island 11 miles off the coast of Wales, in Liverpool Bay, which
would consist of an insular breakwater structure upon which a series of massive oil storage
tanks will be linked tothe mainland by underwater pipelines. The island unloading facility
could become one of the most important crude oil transshipment stations in Europe,
accommodating mammoth tankers up to 1,000,000 DWT.
In Western Europe, six ports are being enlarged to capture as great a share as possible of
the expanding international trade to and from Europe. The ports are Rotterdam and
Amsterdam in the Netherlands, Antwerp in Belgium, and Marseilles, Le Havre and Dunkirk
in France. All are committed to large development projects to accommodate the large
tankers and bulk carriers now coming into service and to accommodate container transport.
The port of Dunkirk plans to build an artificial, U-shaped island about eight miles
offshore to the west of the French port, in the Strait of Dover, to accommodate tankers of
500,000 to 750,000 DWT. The island terminal would be a principal tanker unloading
facility and transshipment station connected to the mainland by submerged crude oil
pipelines.
One harbor official expressed his views as follows: ““This is nothing short of a maritime
marathon. The port which expands first will get the business of the future; the ones which
don’t do anything will get nothing. And all the big ones are out to win the gold medal.†The
ultimate solution may be one of cooperation within the Common Market concept rather
than competition among the ports, with a regional harbor to serve the needs of the area
regardless of national boundaries and local economies.
World Waterways
There are certain sea areas through which large tankers will be unable to pass.
Considered impassable for ships drawing 66 to 82 feet of water (requiring 82 feet to 100
feet of depth) are the following areas:
a. River Plate Estuary including Montevideo and Buenos Aires.
Large areas of the White Sea, including Archangel.
Baltic Sea.
Southern part of the North Sea, including Dogger Bank.
Shallow coastal areas around the world, the English Channel, the approaches to the
Black Sea and to New York.
@ Co
Ship Sizes in Future U.S. Ocean Trade
The growth of tankers, the fastest growing type of all ship types, has been
accommodated by development of offshore terminals and new deepwater terminals located
away from traditional and established ports. By 2000, crude oil tankers ranging from
150,000 to 200,000 DWT are expected to be operating in the U.S. Atlantic Coast,
Gulf-Mideast trade, and from Alaska if the Northwest Passage proves navigable. Larger
IV-A-163
TABLE A4-1
CAPACITY OF SOME MAJOR EUROPEAN PORTS
Trieste (Muggia Bay)
Genoa
Naples
Marseilles
Bilbao, Spain
LeHavre
Dunkirk
Rotterdam (Europort)
London
Milford Haven
Liverpool
Southhampton
Immingham
Glasgow
Antwerp
Hamburg
Gothenburg
Ship Capacity in DWT
Present
160,000 DWT
100,000 DWT in
1968
120,000 DWT
120,000 DWT
100,000 DWT
200,000 DWT
90,000 DWT
100,000 DWT
100,000 DWT
100,000 DWT
100,000 DWT
100,000 DWT
60,000 DWT
65,000 DWT
100,000 DWT
IV-A-164
Ultimate
Dredging for 200,000 DWT
under consideration
250,000 DWT
200,000 DWT
500,000 DWT (potential)
125,000 DWT by 1970
250,000 DWT later
250,000 DWT in 1969
500,000 DWT ultimate
175,000 DWT
Dredging for 150,000 DWT
200,000 DWT in 1969
500,000 DWT possible
Plans for 82’ depth
200,000 DWT in 1969
vessels may also be in use, but their numbers are expected to be few, and limited to serving
very specialized ports. In the U.S. Atlantic and Gulf-Caribbean trade, the vessels will
probably range from 80,000 DWT to 150,000 DWT. The Alaska-West Coast trade will
probably use ships of this size in the latter group. These ships will not be intended to enter
most of the established U.S. ports.
Petroleum product carriers are not expected to exceed 80,000 DWT and most will
average 40,000 DWT or less. These vessels will draw 42 to 49 feet fully loaded and can be
operated in and out of some major Atlantic and Gulf and few West Coast petroleum ports.
Because of the number and complexity of products carried, the product carriers must
generally reach existing distribution terminals located at historic ports accessible by means
of traditional channels. Alternatives used for crude carriers are not feasible in this trade.
Dry bulk carriers operate over a much greater variety of routes and carry a much greater
variety of cargoes, none of which are available in as great a volume as crude oil. To
maximize operational flexibility under these circumstances, dry bulkers will be built to
smaller sizes than tankers. The industries served by dry bulkers will probably remain close to
traditional harbor areas because the industries are difficult to relocate, and because the new
handling methods, transshipment and distribution solutions available to the oil industry are
not available to the dry bulk consuming industry. For these reasons, dry bulkers will
generally continue to use historic United States harbors. Until deeper ports are provided,
dry bulk carriers will range from 50,000 DWT to 75,000 DWT, with a few specialized ships,
as for iron ore, up to 100,000 DWT.
Oil-bulk-ore (OBO) carriers are more closely allied to the crude oil tanker and could
reach 200,000 to 250,000 DWT. These could enter U.S. harbors only partially loaded.
The recent Arctic oil discoveries on the north slope of Alaska, coupled with the current
Federal investigation of the future need of our present oil import quota system, may
provide future economic incentives to employ tankers larger than 250,000 DWT on the long
haul crude oil routes from Alaska and the Middle East to U.S. Atlantic and Gulf ports. For
example, current vessel sizes being considered for the Alaskan oil movement are in the
225,000 to 275,000 DWT range. If these prove successful, this could influence operators in
the U.S. Atlantic and Gulf—Mideast trade to also use larger vessel sizes.
Considering the existing physical and economic limitations of dredging U.S. harbors and
channels to greater depths appropriate to accommodate future dry and liquid bulk carriers,
it will be necessary to construct some offshore terminal facilities as a reasonable alternative.
With appropriately designed U.S. offshore petroleum handling systems, tanker operators in
the aforementioned trades will utilize the largest size tankers, in relation to operating costs
and total distance, which will supply the necessary transport requirements of each route in
the most economical manner.
The technique of handling powdered dry bulk materials as a liquid slurry is already in
use on a limited scale in the transport of coal. While this method does not appear likely to
replace dry handling of many types of bulk materials, it offers the distinct possibility that
relatively inexpensive off-shore petroleum terminals can be adapted to handle ore and coal
in slurry form. If this proves feasible, these materials will move in the same sizes of
superships that now carry petroleum.
General cargo vessels will remain closely oriented to traditional harbors, the available
shoreside space, and the existing land transportation even more than the dry bulkers. These
IV-A-165
factors will restrain general cargo vessel sizes. Another restraint is the greater need for
frequent service afforded by smaller ships compared with the less frequent sailing ofa larger
ship which would provide less expensive service. The largest general cargo vessels in 2000 are
estimated to be 950 feet to 1,000 feet long, 110 to 115 feet in beam and drawing 33 to 35
feet when fully loaded.
Insummary, crude oil, oil-bulk ore and certain dry bulk carriers are the types posing serious
problems for existing U.S. harbors. The main problem concerns water depths, and to a lesser
extent, horizontal waterway dimensions. Ships larger than 200,000 to 250,000 DWT class
probably will not appear in U.S. oceanborne trade by 2000, except possibly to serve a very
small number of highly specialized ports.
Ship Characteristics
The ship characteristic which most frequently excludes large ships from existing harbors
is the vessel draft. The average draft for tankers and dry bulkers up to the projected
maximum sizes are shown on Fig. A4-2. Drafts of individual ships vary from these average
values. Freighters are expected to draw 40 feet or less, even at the largest projected size.
Ships often use the full depths available in harbors or channels, occasionally taking
advantage of the high tide to permit entrance where entrance at low tide is not possible.
Harbor and Channel Depths
During the 1940’s the T-2 tanker (16,600 DWT) was used as the criterion in
determining that a depth of 35 feet was required at the major United States ports. Tankers
of 35,000 DWT required 40-foot depths and necessitated further enlargement of harbors
and channels. Most of the major United States harbors are less than 42 feet deep at the
present time and only at three port locations can a vessel in the 100,000 DWT size range be
fully loaded at berth. These are the petroleum berths at Los Angeles and Long Beach and a
grain berth at Seattle.
Required Landside Facilities
The tremendous volume of commodity deliveries associated with superships requires, in
addition to deep harbors and channels, a great expansion in supporting facilities such as
mooring facilities, piers, unloading facilities, tank farms, and storage areas. Inland
distribution, or “feeder†transportation network may also require considerable modification
or redevelopment to insure prompt dispatch and timely receipt of the huge commodity
loads.
Problems of Harbor Deepening
Exploitation of the superships requires consideration of the sharply increased costs
directly associated with the channel and harbor improvement, and indirect costs associated
with such factors as environmental and ecological changes.
Possibly the most significant problem associated with major enlargement of harbors and
channels is the cost of dislocations and major relocations of the extensive developments
which have grown to the water’s edge at most of the Nation’s harbors. For example, at
Oakland, California, substantial deepening of the harbor would result in very high cost for
IV-A-166
100
o
oS
oD
o
AVERAGE DRAFT, FEET
ES
°
20 ff
SHIP SIZE-HUNDRED THOUSANDS DWT
AVERAGE RELATIONSHIP BETWEEN DEADWEIGHT SIZE AND SHIP
DRAFT OF TANKERS AND DRY BULKERS
FIGURE A4-2
IV-A-167
modification of Army and Navy waterfront facilities as well as the densely developed city
waterfront area. Numerous other problem areas can be cited.
Many of the Nation’s harbors have man-made channels, but most of them have been
constructed by the removal of silt deposits. In a growing number of cases further deepening
would encounter increasingly harder materials which are increasingly expensive to remove.
Another changing condition is determined by the contour of the continental shelf. For
example, deepening the offshore channel for Sabine Pass on the Gulf Coast only four feet
would entail extending the length of the channel by 15 miles.
Disposal of the material excavated from the channels is becoming an increaing problem
as available spoil areas become filled. The alternative of spoiling in deep water involves
considerable added expense.
Another area of increasing concern is the effects of the harbor and channel construction
and soil disposal on the environmental and ecological aspects of the biologically rich
estuarine areas often involved in the channel and harbor developments.
Table A4-2 summarizes some of the problems associated with harbor deepening in the
United States. The data shown in the table have been gathered from available sources
without specialized or detailed studies, and, in many cases, are very preliminary in nature.
No judgment of the feasibility of future harbor improvements is intended. “Problem
depths,†as identified in the table, are levels at which a given obstacle may begin to present
serious problems. The difficulties associated with these obstacles can be expected to increase
with depth.
U.S. and Canadian Harbor Development in the Near Future!
Although development of U.S. harbors to accommodate the larger ships that are now
appearing is hindered by many problems, pressures to enlarge harbors and the channels
leading to them or to build new harbors and channels are mounting. The following
paragraphs outline plans for such development in the United States and Canada.
An iron ore loading dock was built at Sept Iles in the Gulf of St. Lawrence to
accommodate 90,000 to 100,000 DWT ships by 1968. It is planned to deepen the facility to
handle 150,000 DWT to 200,000 DWT ore ships ultimately.
Planning is underway for “Canport’â€â€™, a new harbor near St. Johns, New Brunswick,
capable of handling ships up to 300,000 DWT. The venture would cost $40 to $50 million.
Two major U.S. oil companies are considering deep ports for large tankers at
Machiasport, Maine. The size of vessels to be accommodated is expected to be 200,000
DWT or larger.
Plans are underway and construction has been announced for a new deepwater oil port
on Long Island, in Casco Bay, near Portland, Maine. The announced cost including oil
storage facilities and dredging to 85 feet is $140 million. The construction is planned for
completion in 1971. The facility would receive Middle East crude oil, and Alaskan crude oil
if the Northwest Passage is found navigable. The crude oil would be transshipped to
refineries at other locations in smaller tankers. Some of the crude oil could be delivered to
Montreal refineries through an existing pipeline.
1 Conditions as of September 1969.
IV-A-168
TABLE A4-2
POSSIBLE OBSTACLES TO HARBOR DEEPENING!
Rock and/or
Authorized Major Continental
Harbors Depth? Relocations? Dislocations* Shelf
(Beginning depth of problem — in feet)
ATLANTIC COAST
NEW ENGLAND
Boston Harbor 40 40 50 60
Bridgeport Harbor 35 60
Cape Cod Canal 32 45 40 40
Dorchester Bay and
Neponset River 35 60
Fall River Harbor 30 45 60
Mystic River 35 45 40
New Bedford and
Fairhaven Harbor 30 40 35
New Haven Harbor 35 40
New London Harbor 33 60
Portland Harbor 45 45 60
Portsmouth Harbor and
Piscataqua River 35 50 45 35
Providence River and
Harbor 40 55
Salem Harbor 32 60
Searsport Harbor 35 60
Weymouth-Fore and
Town Rivers 35 45 50 40
1The data shown in the table have been gathered from available sources without specialized or detailed studies,
and in many cases, are very preliminary in nature. No judgment of the feasibility of future harbor improvements
is intended. ‘‘Problem depths,’’ as identified in the table, are levels at which a given obstacle may begin to present
serious problems. The difficulties associated with these obstacles can be expected to increase with depth.
2 Maximum depth for outer harbor, unless otherwise noted. Lesser depths are often authorized for inner harbors.
Smajor relocations include relocation or replacement of major bridges, highway and railway tunnels, utilities, or
in-harbor structures such as breakwaters or jetties.
4 Dislocations include relocation, replacement or loss of port facilities (piers, terminals, etc.) or industrial, commercial
and residential structures, which are located adjacent to existing channels.
IV-A-169
TABLE A4-2
POSSIBLE OBSTACLES TO HARBOR DEEPENING (Cont’d.)
Rock and/or
Authorized Major Continental
Harbors Depth Relocations Dislocations Shelf
(Beginning depth of problem - in feet)
ATLANTIC COAST
NORTH ATLANTIC
Baltimore Harbor
Buttermilk Channel
Channel to Newport News
Delaware River,
Philadelphia to the Sea
Delaware River,
Philadelphia to Trenton
East River
Hudson River Channel
Newark Bay, Hackensack
and Passaic Rivers
New York and New Jersey
Channels
New York Harbor
Norfolk Harbor
45-Ft Section
40-Ft Section
35-Ft Section
Thimble Shoal Channel
York River Entrance
Channel
SOUTH ATLANTIC
Brunswick Harbor 30 2
Canaveral Harbor Sill 43 oy,
Fernandina Harbor 32 34 34
Jacksonville Harbor 42 48 42 44
Key West Harbor 30’ 36 34 34
Miami Harbor 30 36 30 32
Morehead City Harbor 35 60 50 50
Palm Beach Harbor 35 41 35 37
5 Improvement of Newark Bay, Hackensack and Passaic Rivers is governed by depths in New York and New Jersey Channels.
6 Improved by U.S. Navy to depth of 39 feet in 1952. Currently has a controlling depth of 37 feet.
7 Channel deepened to 34 feet by U.S. Navy.
IV-A-170
TABLE A4-2
POSSIBLE OBSTACLES TO HARBOR DEEPENING (Cont’d.)
Rock and/or
Authorized Major Continental
Harbors Depth Relocations Dislocations Shelf
(Beginning depth of problem - in feet)
ATLANTIC COAST
SOUTH ATLANTIC
(Cont’d.)
Port Everglades Harbor
Savannah Harbor
Wilimington Harbor,
North Carolina
GULF COAST
Calcasieu River and Pass
Charlotte Harbor
Freeport Harbor
Galveston Harbor
Gulfport Harbor
Houston Ship Channel
Mississippi River,
Baton Rouge to Gulf
of Mexico
Mobile Harbor
Panama City Harbor
Pascagoula Harbor
Port Aransas Corpus
Christi Waterway
Sabine-Neches Waterway
Tampa Harbor
Texas City Channel
PACIFIC COAST
Columbia River Entrance 48 48
Columbia and Lower
Willamette Rivers 40 45 40 40
Coos Bay
Entrance Channel 40 40 40
Inner Channel 30 30
Grays Harbor 30 45 30
IV-A-171
TABLE A4-2
POSSIBLE OBSTACLES TO HARBOR DEEPENING (Cont'd)
Rock and/or
Authorized Major Continental
Harbors Depth Relocations Dislocations Shelf
(Beginning depth of problem - in feet)
PACIFIC COAST
(Cont’d.)
Humboldt Harbor and
Bay (Inner Channel) 26 30
Los Angeles-Long Beach
Los Angeles 40 45 42
Long Beach 35 50 35
Oakland Harbor
Outer Harbor 35 100 35 300
Inner Harbor 35 35 35 300
Puget Sound Harbors Depths in Puget Sound range up to 900 feet.
(Bellingham, Anacortes, Improvements normally are associated with short
Everett, Seattle, service channels.
Tacoma, Olympia and
Port Angeles)
Redwood City Harbor 30 100 35 150
Richmond Harbor
West Richmond Chan. 45 200
Long Wharf 45 45 100
Southhampton Shoal 35 100
Inner Harbor 35 85 36
Santa Fe Channel 30 30 36
San Diego Harbor
(Bay Channel) 35 50 40
San Francisco Harbor
Bar Channel 55 300
Islais Creek (Approach) 35 100 200
San Pablo Bay and Mare
Island Straits
Pinole Shoal Chan. 45 150
Oleum Pier 45 45 100
Mare Island Straits 30 50 100
Skipanon Channel 30 35 50
Yaquina Bay
Bar Channel 40 40 40
Interior Channel 30 30
IV-A-172
A consortium of oil companies organized as the Delaware Bay Transportation Company
has under investigation an offshore unloading facility for tankers in lower Delaware Bay. A
pipeline would deliver the oil to existing refineries. Dredging would be required to provide
channels for 200,000 DWT tankers.
A plan for constructing two offshore submarine pipeline unloading facilities, one
located seven miles east of Long Branch, New Jersey, and the other located east of Cape
Henlopen, Delaware, has been proposed recently by First State Pipeline Company who
would hope to build such facilities for accommodating tankers of upwards of 250,000 DWT.
Bethelem Steel announced in 1968 and 1969 that they would expand their works at
Sparrows Point, Maryland, at a cost of $50 million. In connection with this expansion,
channel deepening would be required from the present 42 feet to 50 feet to permit 100,000
DWT to 135,000 DWT ships to deliver ore to the Sparrows Point plant.
Bethelem Steel is also planning to build a shipbuilding dock at Sparrows Point which
would accommodate ships up to 210,000 DWT. Completion is scheduled for 1972. Newport
News Shipbuilding and Drydock Company is planning a facility of similar capacity.
A deepwater port is under consideration at the mouth of the Mississippi River where
deep water is only two miles from the river outlet.
The Committee on Public Works, House of Representatives, requested by resolution
adopted October 19, 1967 that the Board of Engineers for Rivers and Harbors review
reports on San Francisco Bay and all tributary deep ports.
A deepwater port, Roberts Bank, near Vancouver, British Colombia, is under
construction and being readied for a coal contract between Japan and Canada. Accommoda-
tions are being provided for 150,000 DWT vessels.
An offshore tanker loading facility has been constructed at Cook Inlet, Alaska, and
presently handles tankers up to 30,000 DWT when ice is encountered and up to 60,000
DWT during ice-free conditions. The ultimate capacity will be 100,000 DWT vessels.
The U.S. harbor problem is of increasing concern both to Government and Industry.
The American Association of Port Authorities (AAPA) has recently published a forecast in a
report entitled, “Merchant Vessel Size in the United States Offshore Trades by the Year
2000,†which highlights the need for planning to accommodate the larger sizes of vessels
which will serve in this country’s trade. The projections in this forecast provide a basis for
translation into an assessment of long-range facilities requirements on a regional basis. The
AAPA projections and estimates provide an excellent point of departure for requisite federal
studies to guide future decisions on either federally-financed improvement projects or
federal permits for the location of privately financed facilities in waters for which the U.S.
has custodial responsibility.
Relationships of U.S. Harbors to a Sea-Level Canal
The present Panama Canal and its potential successor, the sea-level canal, constitute an
integral part of the oceanborne transportation system serving the United States. As such, the
sea-level canal should be capable of serving the ships which will also serve the U.S. ports.
The current stage of study and development of U.S. ports as described in the foregoing can
only indicate the trend in the broadest of terms. Only three U.S. ports can now handle
100,000 DWT vessels, and consideration is being given to serving 200,000 DWT crude oil
carriers at several proposed deepwater facilities. The many constraints to increasing the
IV-A-173
present depths of U.S. harbors are likely to limit the development of deep draft terminal
facilities to a few strategically located regional ports and offshore loading and unloading
facilities, but at least this minimum will be built. On the basis of both U.S. and foreign port
development plans, few ships larger than 250,000 DWT are expected to be in service
anywhere, and few in excess of 200,000 DWT will serve U.S. ports. Therefore, a 250,000
DWT vessel is indicated to be the largest that should be considered in planning a sea-level
canal.
IV-A-174
Appendix 5
STUDY OF SHIP DELAY COST AND RELATED
CANAL LOCATION BENEFITS
Introduction
This Appendix addresses two interrelated considerations. The first pertains to the cost
of delay of a ship and the second concerns the relative benefits of the several canal routes
with respect to voyage mileage, time, and cost.
Delay Cost
The type of delay primarily considered was that encountered at the mouth of a canal
due to congestion. In this situation, fuel is not being burned for propulsion. An analysis of
present day costs was made versus deadweight tonnage with the results being plotted on
Figure A5-1.
Hourly operating costs of vessels vary according to their size, age, type, state of repair,
the flag under which they are operated and the skill of the owners, superintendents, officers
and crew who operate them. The delay costs should be considered as a fixed charge
irrespective of the trade in which a vessel is operated. Voyage expenses which vary by reason
of employment, i.e., bunkers consumed at sea, port charges, cargo handling expenses,
agency fees and commissions are not included; however, a cost per hour for bunkers
consumed in port is included in the cost of the delay.
The calculation of the average delay cost for all vessel types is illustrated by Table A5-2.
Average costs per deadweight hour from Figure A5-1 are weighted by Flag (U.S. vs. Foreign)
and again for the percentage of transits by type from Table A5-1 to determine the average
cost per deadweight hour for the “average†vessel transiting the canal in 1970. The delay
cost for the “‘averageâ€â€™ vessel of 14.1 thousand deadweight tons is calculated to be $158.60
per hour.
Canal Location Benefits
In order to compare the relative geographical benefits of Routes 8, 14, and 25 with
respect to sea lane distances, accurate distances were determined from each Route terminus
to major world ports served by the canal. These are shown on Figure A5-2.
To determine the present relative benefits in terms of ton miles saved by each route, a
judgment sample consisting of more than 90 percent of the total commercial cargo moving
through the Panama Canal in 1968 was analyzed. The results are tabulated in Table A5-3. A
negative sign indicates a net saving and a positive sign indicates an additional number of
miles over the existing Panama Canal route (or Route 14).
IV-A-175
PA || DT i sal |
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IV-A-176
100
90
80
70
60
50
40
30
20
10
DWT IN THOUSANDS
GENERAL CARGO, BULK CARRIER AND TANKER-COST VS. DWT
FY 1970 DOLLARS
FIGURE A5b-1
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IV-A-177
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IV-A-178
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IV-A-179
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IV-A-180
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IV-A-181
Excluding the consideration of time required for delay in waiting for convoy and in the
actual passage through the canal, Table A5-3 shows that Route 8 presently could effect a
yearly savings of 18 billion ton-miles over Route 14 and that Route 14 could effect a 6
billion ton-mile savings over Route 25.
Translating the foregoing in the instance of 18 billion ton-mile savings into the average
effect on an average ship of 14,100 DWT for a year’s time, the yearly savings per ship would
be about 8.2 hours steaming time at the world average speed of 14 knots. This would be
worth about $1600.
Factors such as waiting time for convoy and greater ship speeds could render the
foregoing relative benefits of small significance.
IV-A-182
ad
eZ
AA EL
VT) a
UCT EP Miy
ANNEX V
STUDY OF
ENGINEERING FEASIBILITY
INTEROCEANIC CANAL STUDIES — 1970
I
TLIC AD UATNHATH a
1) File
"WHITE A PAD OTe Oe (TIE
Table of Contents
DIGEST
PARTI. INTRODUCTION
Chaptermlelhe Studvae tones cecae eet cho act oict at) ores tereir ons = oioilsreuavauorsken-
PUNE DIONS 9c" olony b turd eoichtuo Sad obo oleReio ec bia u/c aN cen sac keaveeEb conan caceeueedlecrndn zamena
Method ologyes 2tnens hoes Sie Se Pe INE on sere nee ecsieraie elmer ss
Organizationofathe\studyvaetioramnenmm eee eee eer
Mrivestigativiere fionta says ste eeara fis Sabie ral eye A Bic aey re etter e etm eceuatlan etnies
PART II. BASIC CONSIDERATIONS
Chapter 2 saPreviousiStudies, ws 5 43 ih en a 5S ape ie ee eee, Say rey deen §
FarlvactOntisy sear nem e et loss cin aA Medes A se ss St eat A AU key eh pe einee Bl
MVE MOD ONSUTVEVS aeisn ns heed Setter hacker ar a Peay fee
bieshhirdilocksiPlani awa a5 os ee a Ap cal ees Reps
TER Avene DOTA AN eae Pein a aN eae ky srl a ek oe Ss ease ane a
sitresBoardrofConsultantssreporteeee eon eee non Oncne
WitvemhS GOne DOLtaters remo ra ce eee can ties cence ARC encnceclict casei pacientes
HITE SS GAsTe DO eacwe i oy ee eet hey eee LeU Ron onic LE ree
Chapters SelectionvorRoutes) asaya. escent e e ee earaees
Consid eratonvoterOwbes’ yoccusasssqcoayciey us nse mn ke neu acbs AEE IE
ACUCIS ly Une COMMMBHOM coacouoodcosode0esbsos Duda oD aODUDDDHO
Chapter 4. Characteristics of the Regions Under Study .....................
The Nicaragua-Costa Rica border region (Routes 5 and 8) ...............
The Panamanian Isthmus (Routes 10,14 and 15) .....................
The Darien Isthmus of Panama (Routes 17 and 23).....................
The Atrato-Truando region of northwestern Colombia
GROUPES IS arty 25) es yeas cob oy seas kerala asics cine egclesl Pa anod Wea oe) REA RE
Sumimanyadialb le mbar cost ae iene ai ea ernie er ovaig Oe el tek owshe eusvannerne
Chapter 5. Conventional Excavation Technology ...................+-0055
Ex Cava ti OMISV;SLE IMIS jis essen ued EN Re a Rte Ot ASR lee, LIMA ask.
Drillinegandib lasting) | ees. cece cata ysegeueatiiouswewessiecduaveiteme Mele Ree eae ee
Disposallime thod Sy) se Peres ayay ages cncccue Soc aire cane aso apres Serene. Gore Eieainne ME
EXCayatiOnucOstutnend Sime ce sew esieca a oucleLaiey icy comer Gusisuetacrove ws ATER me Reroute
Page
V-xv
V-1
V-2
V-2
V-5
Table of Contents (Cont’d)
Chapter Page
Chapter 6. Nuclear Excavationmlechnologyamss sence ecient V-65
The mnuclear cratering processes meee cee eo cio reniceee ne renee renee V-65
Nuclear‘crater:properticsia; cers-s.nel ots co ee ae sue eee ae V-65
Canal excavationiconcepte sitatscus accrchs encase eee ee ree eee V-68
Associatediefiectsioinucleamexplosions eae eee eee V-70
Development iof crateringaiechnolosyarre 7-2 ae nee eee V-72
Status of nucleariexcavationmechnolosyarysi- cise iene nena tenner V-81
Chapter 7. Slope!Stability <2y.2)-.sclees wseas wsgecn Speiesths scons css Oe cere eee V-83
Excavatedsslopelexpeniencemar niece ooo iene ene V-83
Conventionaliexcavation slopelcniteriay ) +4) oe Eocene V-87
Nuclear excavated'slopes. .2422i.cas so easiness ee 5: oe eee See ae V-87
Chapters: ChannelDesieniandalinansitCapacitiesse eee eee V-91
Shipimaneuverability inicontined watersinn eee eee ie eee V-93
Tidalicurrents: — 5 ..7vehva eyes tee eee cate ata cota atts RAE eter re hepe rome ees V-94
Channelidestont = 2.5 heres scrote v5 Sie On iene Se Oe ee V-96
Mitication ofthe eriectsofcurrents meee ieeecietroe emer V-101
Ship'spacing,. -
Canal) capacity and operation: besxasescociae caterer od ee te ee Oe V-108
Automated itratficicontrol. 2.3 .Â¥.-faves cia hy ete ite ee oro ne eee V-111
Other design: factors’ vavccsavcicks tone te eee V-111
Increasinecapacitycat minimum\coOSst ssa44 4550 eee ae eer V-112
Chapter:9’, Cost-Elementss ..:d.ssecpsycecveveaeiy tev eaten roca A eR ee V-113
Construction COStS)-. sisi ievs5 ch ci, cea ae eee ee eR oe V-113
Operationandimaintenance/costs 5-4 -.-c ieee era eerie V-114
Real state: COStS ..2.<.ece:ondcaterecen-xouspeuonanzuawSeekspensnepsaeten ie Se te ee one V-115
UNE, COSES: fei. ac25.ce5 ence ny5obeansvziievacduellacavspendhs Shaner, PRUETT V-115
Chapterll0= EnyironmentallPAspectsi=are eee er ae ere eee V-117
Environmental effects of excavation and spoil disposal ................. V-117
Ecological transter of radionuclides ser 4ee cee eee eee eee enee V-120
Biotic: interchange, ..)2-)...\,,445. e145 SAS Se ee eta eee V-121
Gatun Lake: sc 2 oc hc... SEES EE oe es ee cree V-123
The Affrato lowlands: 2 .sjeiey<.es
PART III. EVALUATION OF ROUTES
Chapter 112 Route 1'5—Panama’ Canal: Zone Locki@analia- sence eee eee -125
Accuracy Of Estimates... jo csce mene e io eisiose eee tote eiorene oe RO V-125
EX1Sting Cam all je: isscc. cle lic sans noud Go sere, ove nase soho ae Hee WEREI ICONS CREO ne ne V-125
Ehird Locks: Par (oc soe iereweuete te seheteiapencue setters ceaene ereiaereltc eens Cece ae ne V-127
Table of Contents (Cont’d)
Chapter Page
Chapter 11 Cont’d)
RenminalaakevPlanien re weg we usr ie to poieuc aoe cueeicnsesc ee RCs as eae V-127
MerminalieakeiPlanwvanationstaryacmmmicermoromcrm cli ono miei: er V-127
Deep DrattgwockCanaltPlanyy eee cae eiceere E eee er sevens V-130
GONSt TU CtiOMe geen wou e testa Ue reser Na ok Ferner a eo Gee es V-130
| EXO \0) [Sion GUNS), eererarare By ala, oiatata SeNate era atOnercr Er REP eer OnE 4/5 ty Gta pict atateratac a aay V-130
SUTTOTTT aya at gaara si wowcue ti acne ae meacae eas ea acgeaedsucendencic aE ese V-133
Chaptenml2ssRontets)— NicarasuailocksCanaly asec oleic ieee ee: V-137
IACCUTACYa@ lee SUUIMIAILE Syreaare tees Gee Se Seems GIS crke say Cisne ace eck MCN NS odes V-137
IROUTCRONET ACS Wey eer ea curs eerie = Gaataees Cena ct alaute my eueisel sia Guin eaves Seeaciienemte Bacon V-137
(GOMSETU CEL OMe wee ee oe ase Sa ter eRe NSS 1 eee soc LEE one otto parsons V-137
TO WLS riaTeaS watowaey ie west serous es ee tartan icesrae euysusee penal terravforemewetg vac Gime eet eater ei eclegense es fre V-140
SULIT MTN ATR gid Ab aide eu eee tah ree rere mene oa Se tle Su TA eure oe ein CV AOE aroyc ps va eae V-140
Chapter 13. Route 8 — Nicaragua-Costa Rica Border Region
Seas Weve kanal rrr gern veep tere un ed ei cu ae ata creer asus ees man eee ae at ra V-145
IACCUTACVZOMESEIIM ATES cuciers ora cteeiseoncueoa oe esos enn olen ames aya inn V-145
ROUCEHONDTA CO mere otra tater eri poy sre ie nae ernie Gusta Snir ae, Eee reece? V-145
Constructioniersvi. 2 cus Bean ciae. Ons ahs er a I aan eared cut aye V-147
PRODI TIgATCAS sear ae Ne roe oS LA a eames V-147
SUI Alva abaes nee vtisesncnsi een ees ech cue hos oh seve el Sac EES or oe eh Araneta V-151
Chapter 14. Route 10 — Isthmus of Panama Sea-Level Canal ................. V-159
IAC CUT ACV AO We SELIM ALC Sia eye ene: meta eRe see teas te cea ce ere se: V-159
INOULC HORACE Trem crenss reese yar ree Anes neuer Seance fee ases ae ae te acy V-159
(Consiiuct Onterrrrr te errr er eta e i rt marr ant et ae econ sone V-159
nO DICINRATC AS Merny TAA Naty See fos ry ea yar atmo ce ota ttee Wace aL aae V-161
Sumimiatvadatawees teres ere acronym merce aie eta ecier sua en er ae V-161
Chapter 15. Route 14 — Panama Canal Zone Sea-Level Canal................. V-167
NC CUTACY OINESELIM ATES weet wet e oe at ean me SNe aa Lei an la eee ta ne ee Mes V-167
ROUTEMR Esta ce lmes eee. w ie MAR sh SP Rey nis Riven N oe 0) 0 or A ene es cre ee Rete V-167
ROUGE HIASDETACC ae Pete renee aww en eR aC Ae SNe nS Recs tn rt a eRe are V-167
GonStruc HO mm eset em etre tebe eee ics WA wtlak Neiae edd wae ayn BUTANE Rode ea ele ea V-167
ELODISTINATCAS A ee wn Meee Ns EAE ohh rs Hayes Diba ESE Oma ee Pee eet V-169
SUM Maa ty 4c ata eae nak ayn icraeens maa Wanton tsa: LE MRR earn Teiae ee When nt ae ct ae dna V-172
Chapter 16. Route 17 — Darien Isthmus Sea-Level Canal ................... V-179
INCCULAC YAO lye SLITIIA LE Siey Spepey -wouseay way se 5 see cache oe I x Eek ES V-179
NO ULE MIWA Ta CCmBapra went err oe see Ra ue A egies car: dn aly SE V-179
CONS ETUC OME ssp Way ERD earpiece cn ees PR I tte tyes V-179
EO DIC TIFATC AS opty gee aA ee hws ee oy eben sh RD OH TO Bie Bees ant ort V-182
SUMMIT AT gC ALA RR hy pepsi ees ce VN by cue avis RE Ps el ther, tert bevy V-183
Table of Contents (Contd)
Chapter Page
Chapter 17. Route 23 — Panama-Colombia Sea-Level Canal ................. V-189
Accuracy of estimates ....... Weise 6 yOytarre We Hod Be BLS eet se ene he a ee ea V-189
Route: 2Sitracee: ..2 ec bhan worsen a enen eons os BROCE Seno V-189
Construction: ’, .\) 6 -Sekn-cakenn wpanamensicns «aoe oe aero V-192
Problem'areasik. e325. eee om RR Rbet CRE ee V-192
Altemnate nuclear:toute ’ 2. cRa Saeed ack odin ton nce eee eee V-194
Sumimaryidatass,.4 &.22s he Se ei Coie ioe Oe eee V-194
Chapter 18. Route 25 = Colombia Sea-Level’'Canal†7. 27". ee ee V-203
Accuracy of estimates sry Vo eile soe cw Hels ee else eee ee ee eee V-203
Route 25 traces 273.) 2a ee Seer Ica SRR OAR CIE OEE V-203
Constrachon†A GP. See see ee SE eT eee te ae ee eee V-203
Problemareag .' 5 nes S Seca eo cieeee oe ae ee eee V-206
Summary data’ "90 Poo sence see tte fea cecten ate eae te eee V-207
Chapter 19s Summanyaon Route! CharactenSticsi enna e ee V-213
PART IV. COMPARISON OF MOST PROMISING ALTERNATIVES
Chapree2Os Router lO © 54 website Roses ee eee eee ee V-225
@apacitys Jfis0hea) Plea ast Soe ee eee eee eee V-225
GeGloBy, 5 odo. le hater dh AER eles De SOS V-230
ECAVELIORE, FAA BIN, 8 oii coos rc neveocoenep ee 1ohoy anew senate ge LR nen ens omen eR eae V-231
Spoilidisposal areas 0.00.0. wees es eoens Sete ete oe ae ee V-234
Sireanvidiverstony yw ees eset cic ec arose cca eee V-234
Parboritaciies 05-0. Bitar ae hens ome ee V-234
Hidal! CHECKS. 0/2. .4).vc. enon aciser ses Faas eS a CE eee V-236
COnvVersiOn.c 254... Laas Seabee cost sep eg oe eee ee V-236
Supporting construetioney 00) & 2:50.01: peices hl ee ee V-236
Healthand sanitation “7.2! 2 has 256). AS See 1 ee eee V-236
Housing and telatedisupporttequirementsia ss. eee V-238
Fhighways‘ang@ brid Ses «5... o.aibhe x arecat ess ech eae seat eae V-238
Clearing and relocations \... - o...4,<-d 05 4 werd oacehal = SOR eee V-238
Operation andimaintenance facilities) ye eee eee V-238
Schedles oo dese wha Solis ae avs ele wk eae he ee V-238
Persorimnel 5. 5.c:ayec€id m ov5v aay goad tae ee tae ee eee V-238
COSESUMMAFIES ois. ds elev dudedy onzeveveecd yercaroaint acevo eed ee eee V-240
Real estate: 7, s 0, 22202: 0G eR Rea aoe ree V-240
Environmentalichanges . ..:.3.4.sa0.ac sansa anna deaa eee V-240
Operation and maintenance costs’. 5... 4 o<.n.0A 0000 onsen wana eee V-241
Operation with the Panama Canal, s...44 .05..aca0csa000a54 eee V-241
Table of Contents (Cont’d)
Chapter Page
Chapter AlmeRoutem4Separatemnmsne ye cies ea aie dine ssa en eae es V-243
(Capacity gener ce eer eer ee ee Ohi eee ne Ld a en ANE ATARI ES Oe V-243
Geology ee re nL te. Pe RL nN Be MET SILOM SOU oN 20) BRE V-249
EXICAVACLO Ian a eee et et Een MRI OR Naar & A Sahn BRN Ale Ble oats al, V-252
Spoildisposaliancaspanc meet ee rat ee ee ope Re ee etc eres Foes at eee V-254
Streanidiversion@e eer are RA PORE EAS aA AAR ees Ree: Ye eA V-256
An DORALACIItCSM mee ce Beate Rte eee eee a ete tel oh eA V-256
id alhch eck wmpeets Re eer ee eee RA Mee A EE. coli ale he Uta arabes Wt ne Mgle V-256
CONVETSIO Mgmreny es Sete Arey hd ays BAM, eae RUB etm A ale ee ue oa Re V-256
SUPPORNS CONSiUCLIONUS =, ses See eee ae se ee eee V-256
HMealthtandisanitatlonye’... 5 eek eee es cond ene ae ee V-260
Housing and related support requirements ....................-.--- V-260
ishwaysrandibmedlees a. sone ciere cc eee een tae eee see sere V-260
Glearinovand relocations ya 445543 eee ee ae V-260
Operationandimaintenance facilities sa een a ee eee V-260
Sched eine RTE Oe ee aU tage fo: oa tae nea ere eae ME tee ei ae V-260
IRETSO TINGED Bie fear # Sememeenee CRIN Ie eR CR PRTC UY § ALIN Mors Chee ck ds Seal dues V-260
CoSHSuMMaAnlicsw ey Kee AMS ok ee eA aes Cea ESAS OSS Bee! V-262
Real estate V-262
OperationtandsnadintenancelcOS(S awe ert eet tte ene V-262
Chapter 2 aeRO Ute Sees ere ee eae ters Serenata ots cast cited oe cicusisne (eres ororameutes V-263
GCapacitiyae reset eee see to ERE oie sau seas ens Gren @ an aa lesen V-263
Geolo cy tenn ee eee MEP EE epee Ney SMUT nes cians lev ue cigs d-a WiGawl ale -euehere es V-265
Conventionaltexcavation 347.6.2468 00 06s eames oe ee eeusee Cars ees V-268
Spoilldisposalkarcast Meee ceenarce orton ores em ole ee edecnay eS cee syayets cate = V-268
IN cleamexcavatio nt vais Sepciclaee weenie Arn enue ee eh ce i a: Se She ebowagaieermertet V-268
SETSATTIE GIVES] O Tle Moers, ay7 irccte cee ba recto tocyc re ear ate hoveky nee erm roucc fe nS Snags MOM RaerteMt ys cee ae reearere V-270
HManborbacitities! Gs cyscrsyace races od me peyepecusy teats Lercnsetacueneeds See ee ewer V-270
SUupPORtingiconstrhuctionuar eee OTe eee In rerio: V-273
Healthyvand!sanitation: Anse ccs sexo ests fees cose < wie nerds eos ne ees encuea V-273
Housing and related support requirements ....................+--.- V-273
Highway sand brid S6Ss se % p<-s2q aceces lenses eis ed oyu eass opt heres Oe SRI V-273
Cleaningyandbrelo cations eres ae ene mya act ioe hanstatene torent ey tow nemo zameaee V-274
Chanrlelveleanu py eke ster kore eee ce ene ee em iat Ssh grec oscireteomsuelte V-274
Operationandimaintenanceitacilitiesi eye ie rennet V-274
VACUA LION: oe cas aces kara eo redeics Mi eine) as Sie aimee ota SIE Siero are, OPA NE TR ehse tees V-274
ASYGLRYS(G NUN (Sapebrasrera aabee eae h se siempre ae SONA cao ahi as Feelin Sur aka rE St ke ARI ANC PLB as V-275
IRETSOMIMC Meese tae eer ee re ee ey Soe ead sahall cts Natta Se ane nike RRA ee V-275
COSESUIMMATICS: Fee a ceccrttesak oie sey eee aeds) ey eee LSE et Se tiais oe ne itemssteeee V-275
IREAITES ta tele cr sucess Rea eee ae et er Seat ES RE SPS, Pee EE V-275
Environinentalyeihect sis amie sient Sie en ed oe tes S55 EASE V-275
Table of Contents (Cont’d)
Chapter
Chapter 22 (Cont'd)
Operationsandimaintenancelcostsiaene eee ie eee eee tenn
Operation with the Panama Canale seen ane eee
Chapter23..Summary Analysis: 5225 bce saeco cues s oe ole eer ene ee
ROUTE s1O cctce.grsis Shee 2 as Secilene Ato eo nel weirs tee uo pectin aoe ase eee
ROUTE TAGS sho. scccie's Bech lace She eae aet eae TA ecto oo Ee Ree Ree
Route 25° sistacaie S Sise, sases eaten eR Oe I GIS. Oe eT eee eee
ROUtCHTS 0 Sica hier Se ee eee Caen ere ene ee eee
Environmentalievaluationy (sem aries en cent eee tener ere
Designialtermatives 2.5.5 sie etn ee Foe a oe + oe Oe
Use.of.aismaller prism: «.:.<5...c =. a2 PRR Pe eR ee eee
Wsevofial3-knot current limitations == 4-521. ieeene ne ene ee
Possiblejincreases in transite speed) 22-552. += -eiemeireente ete nen
Sea-level/lock ‘canal comparisonys- i. serene eater ones eee tere
PART V. PROJECT EXECUTION
Chapter 24. Management, Organization, and Funding .....................
Construction. 425.5655 ad a5 See Fae a ore er cee an So Ee eR
Operation «.45 0.5 Sis cos eh ee ene aa Oe a Or cee
Chapter 25... Dispositionof the Panama’Canal- ..).....- «-1.0 ae pee ee
Mrntbi al USC sais, sace cso ra: ch cir o herds sche tee eh hee OE OT Ick eee
WLEtMATS TONS! vis, evciesertece. eis) Se nei stettonct sae US Ean SoS enn en a
OSES ova gets See nares nicestottauisf athe 5. aycv A leo trons Qe otto SOR Re PT aE en
Chapter’ on Rurther Investigations weer ener ee ee tte
Envyironmentâ„¢ <44.4* St. ete eee ot ee ee Cra Cree:
Subsurfate:investigationsmes sete Seni toe eee een Cerne
Conventionallexcayationrolvaitest#section ean eee eee
Glayishalestandisoftalteredivolcanic tocksien eet eee
Navigation 7. 4 )e ss) <7 6 hes ee ee eee PRA Re ee rn eee
INucleamexcavalion® acevo < cocci mie orto tT cree ite: inna He eee ae
SUITNMNAIAY ON UII NST TEATS 56 onocacanosesduensodudsneneooeee
PART VI CONCLUSIONS
Chapter 27-1Conclusions «. .26 0. 23 26 Peers eae es Ae ss Se ee eee
Concerning the engineering feasibility of a
sealévelicanall i... fas eine made on a eee Gee eee
Concerning the best alternative for meeting
projected |trafificidemandsmy a. jas ss ueie ec ia a cele s ore erent eran
Concermine the useofmucleamexcavationy 4.454 oc 2 terete
V-viii
Chapter
Table of Contents (Cont’d)
Chapter 27 (Cont’d)
Concerning construction of a sea-level canal .........................
Concerning organization of the construction effort.....................
Concerning the operation of a sea-level canal ...............---0---00-s
Concerning increasing Panama Canal capacity in lieu
Ofuconstnu ctingyarsea-levelicanaliananae ena eeincienten eee
Concerning actions to be taken now, unless the decision
to build a sea-level canal is to be deferred at
LEASE NOMWCATS caked: ecto WR RS Aen UD. 2 ANE AAS) EERE RE ed it sae
Concerning actions to be taken now, regardless of
when the decision is made to build a sea-level
Caray se 8 ctl WA eas Os he ERA, PR, AD SI 8 EG Pe SE
REEBEIRENCE Sy Siise.s 3c cic 3 Pee cole enero a ee ner Recreate RES BER TN
INCLOSURES
A.
B.
c
Table
2-1
3-1
3-2
4-1
Report of the Technical Associates for Geology
Slope Stability, and Foundations* ..........................08.
Report of the Board of Consultants on Con-
ventional Earthwork Construction Methods ......................
Environmental Statements Required by the
National Environmental Policy Act of 1969 .....................
Summary of the Battelle Memorial Institute
Report on Possible Effects of a Sea-Level
Canal on the Marine Ecology of the American
Es thimma ne Re sion yaice-yos ce nteue eel eis oo RES Oe te AE oe eee
Summary of the Report of the National Academy of
Sciences Committee on Ecological Research for the
[nteroceanic! Gara) os, Sepeeet Meee eae eee et aire RETA ed td AEE ES ae EA
LIST OF TABLES
Distribution of Engineering Feasibility Study Effort .................
Summary of Significant Previous Isthmian Canal
FVESCISATIONS ies os a isysthcc satus 5 OR CER EIS b SACU IEE REE RE
Canal Routes Considered by the Technical Steering Committee .........
Initial Screening of Previously Identified
Interoceanic Sea-Level Canal Routes ...............220000eeeeee
Data Collection Program in the Darien Region,
PO GGA19 OOM ge ote weak, interns Noga E. ABN a oeiya na cy seek on bene besos LT:
*Appears as Inclosure 2 to the Commission’s Report except when Annex V is bound separately.
V-ix
6-1
6-2
6-3
8-1
8-3
10-1
11-1
12-1
13-1
13-2
14-1
15-1
15-2
16-1
17-1
17-2
18-1
19-1
19-2
19-3
20-1
20-2
21-1
21-2
22-1
22-2
23-1
List of Tables (Cont’d)
Data Collection Program in the Atrato River Region .................
Summaryot Regionali€haractensticsmeprr eee eee eer
Capabilities of Equipment Systems Under Sea-Level
Canal Conditions Based on the Output of a
Single. Excavator .::.:.. at SER FES. 2 Be See
Experiments Considered Necessary in 1965 to Determine
Feastbilityiof NucleamExcavattonmann create ice eee
Completed Nuclear CraternosE xpenmentswer etree eee ene
Additional Experiments Now Considered Necessary to
Establish Feasibility of Nuclear Excavation
for,a/Séa=-Level:Canal. ......2):, data BE aE See eee ae ee
Estimated Safe Speed of Large Ships Traveling
Winassistedhinuthey) esiomi Gh annie leer
Summary of Ship Stopping Distances from a Speed
ofgSeventknotspRelativestomthes cand e ee r
Transit Capacities of a Sea-Level Canal along Route
10 with and without a 14-mile Centrally Located
Bypass and with 20-Hour Average Time in Canal Waters ............
PrincipaliEnvironmentalistudicsiaee eee eee. eee eee reer:
Characteristicsiof RouteiS; = -4aeh aa eee eee eee Oe orn
Characteristics of Routes... eh See eee
Characteristics of Route.S) Nuclear ean eee ee eee
Characteristics ofRoute si Conventional eee eee eee
Characteristicsiof:Route 10% :\-2 aa eee eee ae
Characteristics'of Route 14Gicch 42s. Soe Se ta eee
Characteristicsiof Route 14S) gone a ae ae teeter
Characteristics\of Routed ee ote ee ee ae
Characteristicsiof Route? 3iGonventionalaaseae eee ae
Characteristics of Route 23 Nuclear-Conventional ...................
Characteristics ofRoute 2 52~ ..5 s¢-- 2.532 2-4 5 aiistere = | ere eee IRIE
Summary of Route Characteristics, Conventionally
Excavated™ Alinements:.-..<: 25 «does ois ae ei clei oo oe
Summary of Route Characteristics, Alinements
Inclnudine NucleamE xcavationea ee ee nee eee
Summany.of Route! Charactentsticssiwock Canals sen eee eer
Route 10 Capacity — Cost Data for Design Channels --......--......-
Characteristics of. Route 10/Configurations; 75242225252. 22 28 ee
Route 14S Capacity-Cost Data for Design Channels .................
Characteristicsiof Routesl4S) Conticurationse see ee eee eee eee
Route 25) Capacity-Cost Data for Designi@hannels 2 -5-4.5-0 2 eee
Characteristicsiof Route 25) Configurations oo ee ee een
Summary of Specific Environmental Implications of Sea-Level
Canal ‘Routes cycu. ire Seeieres Se 2 ee eee
Table
23-2
233
234
24-1
24-2
26-1
26-2
26-3
ile!
Bel
39)
4-1
A)
4-3
44
4-5
4-6
4-7
4-8
4-9
4-10
5-2
5-3
54
5-5
6-1
6-2
6-3a
List of Tables (Cont’d)
Page
SignificantjProblempAmeasiny ea ruses costar creweicuc late ete enema tues ste tetesrcticle tere V-283
Data Summary for Optional Configurations ........................ V-284
WocktEanall/Sea-eevell€anal(€omparisonaasae aoe eee aes oo ee V-287
ConstiuchHoniRrolectssExamine diene ane ee rte ees or V-290
OperationaliProjectssExamined aan ase eee cinerea elcre tere rer V-293
Comparison of Physical and Ecological Data Needed
and Data Available for Mathematical Modeling of
MiariT ee MXIT. <1 say Sie eerste erro ea tes SENT Ee PARENT Ss Boe OR re ete V-299
Subsurface Investigation Program (Route 10) .................--.-.-- V-300
IPrexcleniam limiesiatnine TROPA 55c0ccacogencdan0c0acsdo6000nbb4D V-302
List of Figures
Organizationolathe:StudvaEttoni weer ae oer iii V-3
Iinteroceanici@analwRoutesis Mysteries Se eto Sec eae fe sueearsh ae scoa ayia V-18
CanalWRouteswinvestigated a eee scence: si cia ccicue chen Sey eu uns sacs ee cic os aie V-21
Map of Nicaragua-Costa Rica Border Area ......................... V-28
Photographs of Nicaragua-Costa Rica Border Area ................... V-29
Photographs of Nicaragua-Costa Rica Border Area ................... V-30
MaproimtheCanal’ZoncandiVicinity ae eae err ee eee core V-33
RhotosraphsroighRoute dl OPAT Came nite ee erento V-34
RhotosraphsotRoutenl4yArcasen ean ener eal neon sien: V-38
PhotosraphsiomPanamal Canali. sie seus cos haces clone curlers ee seus caske V-40
Map of Panama-Colombia Border Area ........................-.. V-42
PBhotosraphsvomkRoutenl/eATrcam Aner rranie ener reine ec inieioc V-44
PhotosraphsomMRouterd eATe ay fees cerca ese veue calee) Suh cuca als a tetas euraat V-48
Approximate Excavation Quantities on the Route 10
Alinement for Various Channel Dimensions....................... V-54
Open-Pit Mining-Rail Haul Concept ...................0020000055 V-56
Profile — Divide Reach — Route 14 Separate ......................- V-58
Photographs of Conventional Excavation Equipment ................. V-59
Trends in General Construction Costs and
EB xicavatiOnmiCOstsi ies Anetra tive: cee en tp nh Hiker Phas) haw V-62
Nuclear Cratershonrm ation iy pyar ae eee eee ois bs tao fos eee ene V-66
CrossiSectionvolasRow/Cratens tages ct iee faethe bas cealeL A Ra IAA aed a vs V-67
Ship Passing Through Conventionally Excavated
Canal, Showing Required Navigation Prism ....................2....- V-69
V-xi
Figure
6-3b
64a
64b
6-5
6-6
8-3
8-4
8-5
11-1
11-2
11-3
114
List of Figures (Contd)
Ship Passing Through Nuclear Excavated Canal,
Showing Required’ Navi gationwci sini nersie tienen teeter ee
Channel at Fort Peck, Montana Formed by Three
Connecting Rows On nightE xplosiviesis sessile tena een eee
husboatun) Horteke ckaChamnc Nereis itera eee ei eee
Representative Nuclear Craters of the Plowshare
Program. . 2:3. - 22 Gee ee ae chet tata eee one r
Relative Size of Fallout from Sedan, a 100-Kiloton
Explosive Detonated in 1962, and a Theoretical
/00-Kiloton Explosive of 1970) Designâ„¢
Slide Amen Nome ting ameanna Camel o.ceccasueancss00g0ocnecssboue
Excavated Slope Criteria for High, Intermediate and
Low Quality Rock and Unconsolidated Sediments .................
lEpCanenioal Soe. (Cinivenien itor SOM IROGK sascucacooenonoonsscoando0r
Designtchannel® \ (Ness cc mecn ele etter eee Ac hch Reon ey ieee Rae
Estimated Maximum Attainable Speed of a Ship on the
Centerline of the Design Channel for Ships Capable
OP UG ICUS MOEA sansasaadeansaséove0sonosvacuscones
ConceptualiD esigntotralsea-leveli@anallsli) syste a
Pacific and Atlantic Tide Traces (from Panama Canal
Company Records) a4 ceseene oc te oS Ce ee OC
Extreme Pacific Tide Height and Resulting Current
in a 36-Mile Canal on Route 10, with Design Channel ...............
Channel Designi@unves) sca. css sane chee ie eee ee ee ee
Schematic Diagrams of Some Tidal Check Gate
COnMPUTARIOMS = pepe Soc asen AS Fide, RS ea gE a ee
Operation of Tidal Check Gates at the Ends of a One-Way
RestrictedG@ut.. js 52% Na seed oo erae eed, ohana ee a ee
Operation of Tidal Check Gates at the Ends of a Bypass
SECtIOi) Yewin. Oo odie 2 oes eee ee
Extreme Pacific Tide and Resulting Currents in a
36-Mile Design Channel on Route 10 With Tidal
CHE CRS jo) sears BE ges ete ebryen ess kc oa seice See Sec ae penta cg le Re eee ee
Time in Canal Waters versus Percent of Capacity for a
36-Mile One-Way Canal Along Route 10
Mapot CanallZone andi Viicinit yas teeter nein renee eee
Map of Canal Zone and Vicinity Showing Third Locks Plan ............
Map of Canal Zone and Vicinity Showing Terminal Lake Plan .........
Map of Canal Zone and Vicinity Showing Terminal Lake
RlanwVianiationsi(HeRs S792 andes 2225) ieee nee nee
Map of Canal Zone and Vicinity Showing Deep Draft Lock
Canal
Figure
12-1
12-2
13-1
13-2
13-3
13-4
14-1
14-2
15-1
15-2
15-3
16-1
16-2
16-3
17-1
17-2
17-3
174
18-1
18-2
18-3
20-la
20-1b
20-1c
20-2
20-3
204
20-5
20-6
21-1
List of Figures (Cont’d)
Map of Nicaragua-Costa Rica Border Area Showing Route
SWAIN STIVC Tbe rae ee Terao ee eS eer, arcorctess co Saeco upc
Plan, Profile, and Canal Configuration— Route5.....................
Map of Nicaragua-Costa Rica Border Area Showing Route 8
PANTIE Me NESTE eee ore ee amy eyes ON Ts Re eae ce om eee
Plan, Profile, and Canal Configuration — Route 8
CONV Eti@ mals ree wei aro aE ee fe er nt eee es ae
Map of Canal Zone and Vicinity Showing Route 10
ANIMATE TING Tle ae eeepc Ry A Seat, SER a wa 2 oe SR oy a Re
Plan, Profile, and Canal Configuration — Route 10 ...................
Map of Canal Zone and Vicinity Showing Route 14
AMINE TIVE TMUStrar eee ceaty ise Hata My Aer god EAGLE Seok ene hed ARCA redo ms
Plan, Profile, and Canal Configuration — Route 14
(Combine ese ere ces eee oe ere ee Re AEE eS oa RR ee eo
Plan, Profile, and Canal Configuration — Route 14
SG DALAL Mente e ree AES TNT NON PES APO MD eS oy PES oe ter ove AOA A cpp as
Map of Panama-Colombia Border Area Showing Route 17
LNTDSTTOEFONES Setyeasts wcaaeder eG clase agate a tr OG nae Oe he ole Oro hs LN oe hae ree
Plan, Profile, and Canal Configuration — Route 17 ...................
ROUtCmIM BEX ClUISIONVATC AY Perum cine ae oeae mines ee ponche Mewen ens usr aimee:
Map of Panama-Colombia Border Area Showing Route 23
PAM GAVE TIVE ML eis epesy asics eS ere eN etek SNE HUET ETE MP OTe oR Ro SEER
Plan, Profile, and Canal Configuration for Route 23
(WathyNuclearDividexGut)l Sa5e son cece Tee ae eee ere
ROWE ZIE NCIUISTIOMVATCA, ecccc gig ee oor ts base Gos Oe A See Re
Alternate Nuclear Route (Route 23) Exclusion Area ...............
Map of Panama-Colombia Border Area Showing Route
DSR AVIT CIC TE: (Sere eee ee ee re ean EN Rea SaaS ERED Oe Ae,
Plan, Profile, and Canal Configuration for Route 25 .................
Route sv xclusionvAmeas†fs amu sgqrcs se eee eee Aen eee eRe ne ry EES
ROWS IO), Simale Laine, Hern Or Oyen cocascssoconsvs0000000000
RoutewOMBy passe blanoiOpenationea ee eee teeter nan
Route lOMiwo Lane Plantot@Operationsa. sees ee oe aeons oe:
Geologic Profile Continental Divide — Route 10.....................
Generalized Excavation Methods — Route 10 .......................
RouteaOmsBarrier Dams: acciye
Map:of Route 10 Alinement Showing Flood Control
andsSupport Ha cilitieswes meme ccc terse ence tasers Serene eo ate
Route 10 Cost, Personnel, and Construction Schedule ................
Map of Canal Zone and Vicinity Showing Route 14
SeparaterAlinementeme scenes ooo sis.4 seine Gua o OGaid AGRA Ae at
List of Figures (Cont’d)
Figure
21-2a Route 14, 33-Mile Single-Lane Section, Plan of
Operation: *\.5)) ce eros eee geet ct heuegea nee ss Stee ae RRO ee
21-2b Route 14, 24-Mile Single-Lane Section, Plan of
Operation..u: Fa states meaeeeeonee ee tee ss etc ec Ore ee ER Ree
2i-2c¢ Route 145 Rwo-lane Sections blanomOperationl -e eee er eee
21-3 Geologic Profile, Continental Divide, Route 14
Separate sa. cena cht ace see SOR ee ee Ce Se eee
21-4 Profile — Gatun Lake Reach — Route 14 Separate ...................
DISS Routewi4 Separate — FloodiControl Damse seat eee eerie
2-6) Protile — Divide Reach) Route tasseparateee sere se erene renee eee
21-7. Map of Route 14 Separate Alinement Showing Flood
Controland Supports Ractitie samen see rie ere ener een eee
2-8 Route 4 Separate sequence omConversionia see ee eect
21-9 Route 14S Cost, Personnel, and Construction
Schedule <.s2co hs aceecsc oe ee eae ae OO ee a aaa
227\) Route 25) Bypass plantot@peration ape ae eee noe
22-2— Geologic Profile —Route25 see ote n ee coo een nee
22-3 Generalized Conventional Excavation Method —
IRQUTGLZ Sve Ge Se. aoe See eee ie tS eee eT ere nee eae
22-4 Route moiNucleam Detonation sSequencemnne eile enc oni irtte
22-5 Map of Route 25 Alinement Showing Diversion Plan
and Support: Bacilities 200s SWEAR Ao. cee aces a etn ene
22-6 Route 25 Cost, Personnel, and Construction
Schedullets = eres 5s 2555 SRA eS tee cree rere ee ee ee ea eee
APPENDIXES (Bound Separately )*
1. Description of Routes
2. Conventional Excavation Technology
3. Nuclear Excavation Technology
4. Project Management, Organization and Funding
5. Tidal Hydraulics
6. Navigation in Confined Channels
7. Area Sanitation and Health Measures
8. Operation and Maintenance
9. Modernization and Improvement Plans for Lock Canal
10. Routes 10 and 14
11. Routes 5 and 8
12. Route 17
13. Route 25
14. Route 23
15. Organization, Conduct and Cost of the Study
16. Marine Ecology
17. Bibliography
* Available from National Technical Information Service, Springfield, Va. 22151.
V-xiv
REPORT OF THE ENGINEERING STUDY OF ENGINEERING FEASIBILITY,
AGENT TO THE ATLANTIC- INTEROCEANIC CANAL STUDIES - 1970
PACIFIC INTEROCEANIC
CANAL STUDY COMMISSION
DIGEST
The Study of Engineering Feasibility was made pursuant to a request by the
Atlantic-Pacific Interoceanic Canal Study Commission that the Chief of Engineers determine
the engineering feasibility of constructing a sea-level canal between the Atlantic and Pacific
Oceans and develop preliminary plans and cost estimates for such a canal. (See pp. V-1 to V-7.)
A general review was made of basic considerations underlying selection of routes for an
interoceanic canal, including criteria which determine its configuration, means available for
its construction, cost factors involved, and its ecological implications. Six sea-level canal
routes and two lock canal routes studied previously were considered worthy of further
investigation. During the course of the investigation three sea-level routes were found
sufficiently promising to warrant detailed study and comparison.
The study’s principal findings may be summarized as follows.
— Several alternative methods of conventional excavation might be employed. (See
pp. V-53 to V-63.) Nuclear excavation technology is potentially advantageous, but has
not yet reached a state of development which would permit its application if this
project were to be undertaken. (See pp. V-65 to V-81.)
— There are no insolvable engineering problems involved in the conventional
construction and operation of a sea-level canal across the American Isthmus. (See
pp V-83 to V-90.)
— Despite limited experience in navigating large ships through restricted waters,
conservative channel design criteria can be specified. (See pp V-91 to V-112.)
— The Deep Draft Lock Canal Plan for the Panama Canal is clearly preferable to other
lock canal options in Panama and Nicaragua. (See pp V-125 to V-143.)
— The best sea-level canal alternatives are Routes 10 and 14S. The preferred alinement
is along Route 10, crossing Panama 10 miles southwest of the existing canal. Route
14S, an alinement along the Panama Canal, is also acceptable. Route 10 is preferred
because its construction would not interfere with, or endanger, Panama Canal
operations; it would permit continued use of the Panama Canal as a supplementary
facility, and would be easier to expand than Route 14S. Route 10 is also preferable
to the Deep Draft Lock Canal Plan. Construction of a sea-level canal along Route 10
would require 14 years at a cost of about $2.9 billion. (See pp V-223 to V-262.)
— If nuclear excavation could be used, Route 25 in Colombia would be the preferred
alternative. (See pp V-263 to V-277.)
V-Xv
The canal’s construction should be directed by an autonomous agency authorized
to draw upon the resources of existing Federal construction agencies. (See pp
V-289 to V-292.)
The canal should be operated by an agency created specifically for that purpose,
with authorities and responsibilities similar to those of the Panama Canal Company.
(See pp V-292 to V-293.)
To ensure that the new canal is available when the Panama Canal reaches its
capacity, detailed design should begin in 1976 and should be preceded by
investigations of those engineering aspects required for determination of an
optimum design. Fields requiring further investigation include subsurface geology,
ecology, nuclear excavation, slope stability, and navigation in restricted waterways.
(See pp V-297 to V-302.)
V-xvi
PART I — INTRODUCTION
CHAPTER 1
THE STUDY EFFORT
The Study of Engineering Feasibility is one of five annexes to Interoceanic Canal
Studies — 1970, the report of the Atlantic-Pacific Interoceanic Canal Study Commission, 1
December 1970. This annex was prepared in support of the Commission’s efforts, under the
guidance of an interdepartmental and interagency group chaired by the Deputy Director of
Civil Works, Office of the Chief of Engineers, who also served as Engineering Agent for the
Commission. The other annexes, prepared by other study groups, cover related aspects of
foreign policy, national defense, finance, and shipping requirements.
Purpose: Public Law 88-609, 22 September 1964, which established the Atlantic-Pacific
Interoceanic Canal Study Commission, called upon the Commission:
to make a full and complete investigation and study, including necessary
onsite surveys...... for the purpose of determining the feasibility of, and
the most suitable site for, the construction of a sea-level canal connecting the
Atlantic and Pacific Oceans; the best means of constructing such a canal,
whether by conventional or nuclear excavation, and the estimated cost
thereof.! *
To accomplish these purposes, the Commission, on 17 September 1965, approved the
Plan for Study of Engineering Feasibility†, which listed as its objectives:
(1) A determination of engineering feasibility of constructing a sea-level
canal connecting the Atlantic and Pacific Oceans, both nuclear and
non-nuclear.
(2) The development of preliminary plans and cost estimates of construction
of a sea-level canal by nuclear methods.
(3) Preliminary plans and cost estimates of conversion of the present canal to
sea level.
(4) Economic analysis of benefits and costs of alternative canals.
*Refers to references listed on page V-307.
The economic analysis was subsequently reassigned. It appears in Annex III, Study of Canal
Finance, and Annex IV, Study of Interoceanic and Intercoastal Shipping.
Methodology: The methodology applied to the Study of Engineering Feasibility is
reflected in the general framework of this report. In order, the principal steps in the study
were:
— Review data available from previous investigations.
— Select the routes to be studied.
— Collect necessary data in the field.
— Evaluate data and develop general design criteria.
— Apply these criteria to the routes under study, arriving at conceptual designs and
associated construction cost estimates.
— Evaluate these routes to select the most promising as alternatives to be considered
in greater detail.
— Analyze and compare these alternatives to determine the best engineering solution.
Organization of the study effort: By resolution of 16 July 1965, the Commission
requested that the Secretary of the Army designate the Chief of Engineers to be its agent for
conducting engineering feasibility studies in direct coordination with the Atomic Energy
Commission, the Panama Canal Company, and the Surgeon General, U.S. Army. This
appointment was formalized on 24 July 1965, at which time the Secretary of the Army
authorized the Chief of Engineers to redelegate his responsibilities and authorities. These
were passed on 11 October 1965 to the Deputy Director of Civil Works.
With two exceptions, the Engineering Agent made the District Engineer, Jacksonville,
responsible for data collection in the field and for the conduct of engineering studies.
Excepted activities were those related to nuclear operations and safety, responsibility for
which was assigned to the Atomic Energy Commission; and nuclear excavation design, for
which the U.S. Army Engineer Nuclear Cratering Group, working in coordination with the
Atomic Energy Commission, was made responsible. On 22 July 1965, the Interoceanic
Canal Studies Field Office, an agency of the Jacksonville District, was established in the
Canal Zone under a Field Director to perform all functions related to onsite data
collection.? Political agreements were negotiated with Panama and Colombia, creating joint
commissions in both countries to facilitate the Field Director’s work. He represented the
United States on those commissions until his office was inactivated on 31 July 1969.4
The Canal Studies Coordinating Committee was created to assist the interchange of
information among the various agencies involved in field investigations; it also participated
in evaluating data and preparing reports. The District Engineer, Jacksonville, served as its
chairman. Figure 1 shows the organization which conducted the study. Table 1 lists the
major agencies which cooperated to produce its component parts.
Supporting these organizations were numerous universities, laboratories, engineering
firms and institutions—bothin the United States and overseas—performing tasks and
providing information. Among those providing such support were the Hydrodynamics
Laboratory of the Massachusetts Institute of Technology, the Institute of Ecology of the
University of Georgia, the National Geographic Society, the Institute of Marine Sciences of
the University of Miami, the National Academy of Sciences, the Smithsonian Institution,
V-2
ATLANTIC—PACIFIC DEPARTMENT
INTEROCEANIC CANAL OF THE
STUDY COMMISSION ARMY
ATOMIC ENERGY
eoeeececccce
COMMISSION
U.S. ARMY
CHIEF OF ENGINEERS
DIVISION OF seeeceeeceee! ENGINEERING AGENT
PEACEFUL NUCLEAR
EXPLOSIVES
PANAMA
CANAL
COMPANY
THE
SURGEON
GENERAL
CANAL STUDIES
COORDINATING
COMMITTEE
U.S. ARMY ENGINEER
DIVISION
SOUTH ATLANTIC
U.S. ARMY U.S. ARMY ENGINEER
ENGINEER DISTRICT
NUCLEAR JACKSONVILLE
CRATERING
GROUP
NEVADA
OPERATIONS
OFFICE
OFFICE OF INTEROCEANIC
CANAL STUDIES
COMMAND
veoeee* COORDINATION
ORGANIZATION OF THE
STUDY EFFORT
FIGURE 1-1
V-3
TABLE 1-1
DISTRIBUTION OF THE STUDY EFFORT
an
Agency
Responsibility
U.S. Army Corps of Engineers
Office, Chief of Engineers
South Atlantic Division
Jacksonville District
Interoceanic Canal Study Field Office
Nuclear Cratering Group
Canal Study Coordinating Committee
Atomic Energy Commission
Division of Peaceful Nuclear Explosives
Nevada Operations Office
Principal Contractors:
Lawrence Radiation Laboratory
Environmental Science Services
Administration
Sandia Corporation
Battelle Memorial Institute
Environmental Research Corporation
John A. Blume & Associates
Panama Canal Company
The Surgeon General, U.S. Army
Management and technical review:
preparation of Annex V
Engineering supervision and laboratory
support
Engineering analysis and estimates;
preparation of Appendixes 1, 2, 4,
5,6, 7, 8,9, 10, 14, 15, and 17.
Data collection
Nuclear construction engineering;
preparation of Appendixes 11, 12, and
se
Coordination of study effort
Supervision and review of nuclear studies
Nuclear operations and safety;
preparation of Appendixes 3 and 16.
Nuclear cratering technology
Conduct of meteorological studies
Acoustic wave characteristics
Environmental field studies and analyses
Ground motion studies
Structural response studies
General support of the field effort and
application of Panama Canal experience
Medico-ecology studies and medical
support of the field effort
V-4
the Puerto Rico Nuclear Center, the Stevens Institute of Technology, the U.S. Naval Ship
Research and Development Center, the University of Florida, the University of Michigan,
the U.S. Coast and Geodetic Survey, Oak Ridge National Laboratory, the Ecuadorian
Institute of Anthropology and Geography, and the Waterways Experiment Station of the
Corps of Engineers.
Throughout the conduct of this study, the best available professional opinions were
sought and applied. A distinguished board of Technical Associates for Geology, Slope
Stability, and Foundations advised and assisted the Commissioners and the Engineering
Agent in their work. In particular, the Technical Associates were concerned with the
stability of materials through which a canal might be excavated. Members of this board
were:
Dr. Arthur Casagrande Professor of Soil Mechanics,
Harvard University
Dr. Frank Nickell Consulting Geologist
Mr. Roger Rhoades Consulting Geologist
Dr. Philip C. Rutledge Mueser, Rutledge, Wentworth
and Johnston, Consulting
Engineers
Mr. Thomas F. Thompson Consulting Geologist
A group of outstanding engineers advised the Engineering Agent on conventional
construction systems which might be employed in building a sea-level canal. Members of the
Board of Consultants for Conventional Earthwork Methods were:
Mr. L. Garland Everist President, Western Contracting
Corporation
Mr. Grant P. Gordon Vice President, Guy F. Atkinson
Company
Mr. J. Donovan Jacobs President, Jacobs Associates
Mr. Lyman D. Wilbur Vice President, Morrison-Knudsen
Company, Inc.
The size of the force working full-time on this study was:
End of fiscal year:
1966 1967 1968 1969 1970
Office personnel 59 90 73 87 43
Field personnel 404 744 261 184 0
TOTAL 463 834 334 271 43
Investigative effort: In some fields accumulation of information to support the Study
of Engineering Feasibility was a relatively easy task: available records could be reviewed. In
V-5
others there were no records; data had to be collected and collated. In a few cases, existing
technology was not adequate to permit analysis of information accumulated; new
understandings of natural phenomena had to be reached.
This annex summarizes, integrates, and records the conclusions drawn from the many
separate investigations that together constitute the Study of Engineering Feasibility.
Detailed reports on the subjects covered in this study are presented in the appendixes.
Criteria were developed to specify the characteristics of a useful sea-level canal.
Applying these criteria, alinements and designs were selected for each alternative route, and
their construction costs were estimated. Out of this process came an understanding of the
relationship between the configuration, construction cost, and transiting capacity of each
route.
The collection and analysis of these data involved a considerable investment. The
Commission’s expenditures, by general category, were:
Field Data Collection (61.2%)
Geology, hydrology, topography $5,300,000
Meteorology 2,700,000
Bioenvironmental data 2,100,000
Acoustic waves and seismic effects 300,000
Medico-ecology 300,000
Field construction and support 2,400,000
Management 1,600,000
SUBTOTAL $14,700,000
Data Evaluation (25.0%)
Nuclear excavation $ 500,000
Nuclear operations 2,800,000
Conventional construction 2,700,000
SUBTOTAL $ 6,000,000
Commission and Engineering
Agent (6.3%) $ 1,500,000
Unexpended and turned back to
U.S. Treasury (7.5%) $ 1,800,000
TOTAL AUTHORIZED PROGRAM $24,000,000
In addition to the funds which were appropriated for the Commission’s use, expenditures
were made by the Atomic Energy Commission to develop nuclear excavation technology for
this study.
Besides advancing the theories underlying the design, construction, and operation of
large canal facilities, investigations made in conjunction with this study produced significant
V-6
improvements in technology which are expected to have broad applications. Despite this
progress, additional data and investigations should be undertaken before an interoceanic
sea-level canal could be designed and constructed. Regardless of which route is chosen
ultimately, more detailed geological explorations would be necessary. Understanding of
engineering properties of certain weak rocks in deep cuts must be enlarged. Knowledge of
the relationship among ship size, safe ship speed, and channel size must be expanded. The
nature of consequent environmental changes must be determined. Nuclear excavation
technology should be advanced and tested to the prototype level.
As a part of the PLOWSHARE Program, the Atomic Energy Commission included a
series of nuclear cratering experiments designed to support this study. Not all of those
experiments have been conducted; consequently, some objectives of this study have not
been attained. Although enough is known of nuclear excavation theory to permit
preliminary design and cost estimates for those alternatives involving nuclear excavation, the
feasibility of nuclear excavation of an interoceanic sea-level canal has not yet been
demonstrated. Designs and cost estimates of the conventionally-excavated alternatives
described herein are based on established, proven practice; those involving nuclear
excavation are not. Thus, while the present state of our knowledge permits comparison
among and between nuclear alternatives, there is no valid basis for comparing the
conventionally-excavated routes examined in this study with those to be excavated by
nuclear means.
V-7
Aerial view of the centerline road established on Route Water transport was the main method of travel for the
17. Road was impassable to all but tracked vehicles during survey parties. Streams such as this had to be cleared
the rainy season (8 months of the year). before parties could travel further.
Work camps such as this were established along the Survey lines were cleared by native labor.
routes. Camps were supplied by water or by helicopter.
The areas investigated were mostly unexplored jungle. Survey parties were forced to travel mostly by water using native
dugouts and outboard motors.
PART II — BASIC CONSIDERATIONS
In this part are discussed the basic considerations that governed the selection of routes
for study. Also presented are the general characteristics of the regions in which these routes
are located. Criteria are developed for designing a canal capable of meeting projected
requirements. Methods of excavation are described and costs—both quantified and
unquantified—are defined.
CHAPTER 2
PREVIOUS STUDIES
Early efforts: The construction of an interoceanic sea-level canal through the American
Isthmus was considered seriously as early as 1516 when Charles I of Spain* ordered a search
for a strait across the American Isthmus. In the more than 4% centuries since that time,
numerous investigations have been made to determine possible locations and designs for a
canal. The United States has played an active role in this effort since the mid-nineteenth
century. Throughout the 1870’s expeditions were sent out by the War and Navy
Departments to explore the American Isthmus from Mexico to Colombia. In 1872 President
Grant appointed the first United States Interoceanic Canal Commission to evaluate the
Navy’s surveys then in progress. In 1876, having assessed the available data, this three-man
commission recommended construction of a lock canal across Nicaragua.°
The first significant attempt to bring an isthmian sea-level canal into being was made by
a French company, la Compagnie Universelle du Canal Interoceanique de Panama, organized
in 1879 by the builder of the Suez Canal, Ferdinand de Lesseps. Under his leadership,
efforts were made to build a sea-level canal across the Isthmus of Panama. When it became
apparent that this task was beyond its capabilities, the company turned to the construction
of a lock canal, but again was unsuccessful and eventually went bankrupt. A second French
company, la Compagnie Nouvelle du Canal de Panama, formed out of the assets of the de
Lesseps organization, attempted to carry the work forward, but made little progress.
Finally, in 1898, the company made overtures towards selling its assets to the United
States.*
By the turn of the century, the United States had taken the lead in bringing this project
to fruition. The Isthmian Canal Commission of 1899-1901 was appointed by President
*Later Charles V of the Holy Roman Empire
McKinley to direct all route investigations with a view toward construction of a canal by the
United States. After sending exploratory expeditions to Nicaragua, Panama, and the Darien
in 1899, this commission found the Nicaraguan and Panamanian routes to be about equally
advantageous from an engineering viewpoint.° However, anticipating serious difficulties in
acquiring the French assets and in obtaining access and operating rights in Panama, the
Commission recommended the Nicaraguan route. When the French company reduced its
demands to coincide with the Commission’s appraisal of its assets, the Commission reversed
its previous recommendation and informed Congress that, under these changed circum-
stances, it favored the Panamanian route.*®
In 1902 Congress authorized the President to acquire rights to construct and operate a
canal across either Panama or Nicaragua, and, having acquired such rights, to proceed with,
construction. In 1904 President Roosevelt appointed the first of three Isthmian Canal
Commissions to plan and supervise the canal’s construction in Panama.
An International Board of Consulting Engineers, appointed in 1905 to consider
alternatives formulated by the first Commission, recommended a sea-level canal. Although
the Senate Committee on Interoceanic Canals supported the views of the Board, in 1906
Congress enacted legislation adopting the President’s position in favor of a high-level lock
canal, hoping thereby to save both time and money. The present lock canal in Panama owes
its existence to that decision.*
The 1929 Surveys: The Panama Canal was opened to traffic on 15 August 1914. Several
years later those responsible for its operation grew concerned that demands for transit
eventually might exceed its capacity. Thus, in 1929, Congress directed that surveys be made
in Panama and Nicaragua’ to determine the practicability of providing additional locks to
the Panama Canal or of constructing a canal elsewhere.* The U.S. Army Interoceanic Canal
Board of 1929-1931 was created by the President. The Board’s report, submitted in 1931,8
considered three long-term alternatives:
— Add a third set of locks to the Panama Canal;
— Convert the Panama Canal to a sea-level canal; or
— Construct a new lock canal in Nicaragua.
Anticipating increases in the capacity of the Panama Canal made possible by
construction of Madden Dam,} the report concluded that:
The present traffic seeking transit through the Isthmus and the prospective
increase in such traffic in the next few years do not require that any steps be
taken now to provide further capacity at Panama.
The Third Locks Plan: In 1936 a joint resolution of Congress? directed the Governor of
ThePanama Canal to investigate means of increasing capacity of the “Panama Canal for
future needs of interoceanic shipping and for other purposes.†The Governor’s report! °
*Lieutenant Colonel Daniel I. Sultan was in charge of a survey of lock canal routes conducted in Nicaragua by a provisional
U.S. Army Engineer Battalion.
yThe construction of Madden Dam in Panama had been authorized by Public Law 181, 70th Congress; however, at the
time that the Board made its report, it was not yet in operation.
V-10
recommended a third lane of locks* and in August 1939, Congress authorized its
construction. This measure was taken to improve the defensive posture of the Panama Canal
and to increase its capacity. Excavation for the third locks at Gatun and Miraflores and
design of structures and appurtenances were almost complete when the project was
suspended in 1942 because of higher priority demands imposed by World War II. This work
was not resumed when the war ended.
The 1947 report: In December 1945,'* Congress again directed the Governor of The
Panama Canal to make new investigations to determine the best means for increasing the
canal’s capacity and for improving its security, and to consider other possible routes.} This
comprehensive effort, reported in Isthmian Canal Studies-1947,'* identified 30 possible
routes in five geographical areas ranging from the Isthmus of Tehuantepec, in Mexico, to
northwestern Colombia. It went on to select the best route in each area for further
consideration; and to compare these routes with one another.
In his report, the Governor concluded that a sea-level canal was both desirable and
feasible, and that the best and most economical means for its development lay in converting
the Panama Canal (called Route 15) to sea level. This conversion would be made by
deepening and straightening the existing canal along a new alinement called Route 14.
Another investigation, conducted concurrently with the 1947 studies, sought to
determine the effects of nuclear attacks upon lock and sea-level canals. Since principles of
nuclear excavation were not clearly defined at that time, the possibility of using nuclear
energy to excavate a new canal was not considered.
The Board of Consultants’ report: Ten years later (1957) the House Committee on
Merchant Marine and Fisheries appointed a Board of Consultants on Isthmian Canal Studies
to investigate both short- and long-range plans for improving the Panama Canal. In 1958 the
Board submitted its short-range program to increase the existing canal’s capacity; '* and, in
1960, it made additional recommendations providing for a long-range program of
improvements.'? Although stating that “‘no sea-level canal project in the Canal Zone should
be undertaken in the near future,’ the consultants called for further studies and
developmental efforts, particularly in the field of nuclear excavation, and recommended a
review of the entire situation by 1970.
The 1960 report: In 1957 the Board of Directors of the Panama Canal Company
appointed the Ad Hoc Committee for Isthmian Canal Plans to revise the 1947 report, taking
full advantage of developments in construction techniques, and to adjust previous cost
estimates to 1960 price levels. The Atomic Energy Commission participated in this study,
identifying routes that might be suitable for nuclear excavation which, by then, had begun
to emerge as a new technology. The Committee’s recommendations did not address the
* Considered during the original design of the Panama Canal, this plan was proposed formally by Colonel Harry Burgess,
Governor of The Panama Canal from 1928 to 1932. It was first presented in the report of the U.S. Army Interoceanic
Canal Board of 1929-1931. As revised in 1940, it called for locks 140 feet wide, 1,200 feet long and 45 feet deep,
separated from and adjacent to each of the existing locks. Estimated cost of the project was $277 million.!
+On May 6, 1946 the Special Engineering Division, Panama Canal Company, was made responsible for the studies and
Colonel James H. Stratton was designated Supervising Engineer.
V-11
construction of lock canals because, in its opinion, their operating costs would eventually
escalate beyond available revenues.'* Among the more significant recommendations
developed by this study were those calling for:
— Completion, as an interim measure, of the Board of Directors’ canal improvement
program, calling for expenditures of $90 million through 1968 to increase the
capacity of the lock canal;
— Initiation by the Company of planning for the construction of a sea-level canal
outside the Canal Zone by nuclear methods;
— Improvement by the Atomic Energy Commission of nuclear explosives; and,
— Planning by the Company for construction of a sea-level canal in the Canal Zone by
conventional methods if definite plans for constructing a sea-level canal by nuclear
methods were not developed by the early 1970's.
The 1964 report: The report entitled Isthmian Canal Studies, 1964, was prepared by
the President of the Panama Canal Company, pursuant to authorization in 1963 by the
Company’s Board of Directors. The Corps of Engineers, the Atomic Energy Commission and
private consultants participated in its preparation.'* The report summarized studies of canal
capacity, canal traffic projections, and ways of improving the lock canal facilities to meet
projected requirements of ocean commerce. The report contained a detailed analysis of a
Third Locks Plan,* a Terminal Lakes Plan} and a sea-level canal in the Canal Zone.t The
report also examined the present canal’s transiting capacity, and concluded that a maximum
of 71 ships (65 lockages) per day (about 26,000 per year) could be accommodated,
assuming no maintenance shutdowns, and further assuming that either lockage water could
be reused or sea water could be pumped into Gatun and Miraflores Lakes to augment the
lockage water supply. The report also evaluated the technical feasibility of employing
nuclear explosives to construct sea-level canals in eastern Panama and northwestern
Colombia.
These and other significant studies and investigations are summarized in Table 2-1.
*Under this version of the Third Locks Plan, the proposed locks would be 140 feet wide, 1,200 feet long and 50 feet
deep, located adjacent to the existing locks.
+This plan had been proposed in 1943 by Capt. Miles P. DuVal, USN, then Captain of the Port at Balboa, Canal Zone, as a
modification of the Third Locks Plan. It called for consolidating the Pacific Locks at Miraflores and raising Miraflores
Lake to the Gatun Lake level. A new single lane of locks 200 feet by 1,500 feet by 50 feet would be added parallel to
both Gatun and Miraflores Locks. The channel alinement was to be improved and the channel itself enlarged to 500 feet.
+The sea-level canal was to follow generally the alinement of the present lock canal. Its cross section was to be 600 feet
by 60 feet.
V-12
1872-1876
1876-1879
1878-1889
1894-1898
1899-1901
1904-1905
1905-1907
1905-1914
TABLE 2-1
SUMMARY OF SIGNIFICANT PREVIOUS ISTHMIAN CANAL INVESTIGATIONS
Title
(Principal Member)
Interoceanic Canal
Commission (Brig
Gen A.A. Humphries)
Societe Civile Inter-
nationale du Canal
Interoceanique
(Lt. L.N.B. Wyse)
Compagnie Univer-
selle du Canal
Interoceanique (F.
de Lesseps)
Compagnie Nou-
velle du Canal
de Panama
Isthmian Canal
Commission for
Exploration
1899-1901 (RAdm
J.G. Walker)
Isthmian Canal
Commission (RAdm
J.G. Walker)
Board of Consulting
Engineers (Maj Gen
G.W. Davis)
Isthmian Canal
Commission
(T.P. Shonts: 1905-
1907; J.F. Stevens:
1907; Col G.W.
Goethals: 1907-
1914)
Purpose
To evaluate results of
Navy surveys conducted
between 1870 and 1875.
To make surveys and
investigations for a
ship canal in Panama.
To plan and construct
a sea-level canal in
Panama.
To construct a lock
canal in Panama.
To investigate all
practical routes for a
canal across the Isthmus
of Panama, particularly
the Nicaraguan and
Panamanian routes, with
a view to construction by
the United States.
To supervise construc-
tion of the canal.
To consider and recom-
mend the type of canal.
To supervise construc-
tion of the canal.
V-13
Authority
Appointed by
the President,
15 March 1872.
Private company
with interna-
tional character.
Private company.
Private company.
Act of March
1899, 30 Stat.
1121.
Act of 28 June,
1902, 32 Stat.
481.
Appointed by
the President.
Act of 28 June,
1902, 32 Stat.
481.
Results
Eas
Recommended construction of
- 1
a lock canal across Nicaragua.
Explored the Panama, San Blas,
Darien and Atrato regions;
obtained a long-term construction
concession from Columbia.
Excavated an estimated
67,000,000 cubic yards of
material; made valuable surveys
and maps; produced extensive
meteorological records.
Excavated an estimated 11,000,000
cubic yards of material. contirtued
surveys and maintenance of
meteorological records.
Recommended Nicaragua as the
most feasible location for a canal;
then in January 1902, reversed its
decision to favor Panama after
learning the Freoch company had
reduced the asking price of its
rights and equipment from
$109,000,000 to $40,000,000.
Started procurement of
materials and supplies;
improved living conditions
in the Canal Zone.
Majority supported sea-level
canal; both majority and
minority reports submitted
to the President.
Planned, designed and
constructed the Panama Canal.
(Excavation amounted to
210,000,000 cubic yards.)
TABLE 2-1
SUMMARY OF SIGNIFICANT PREVIOUS ISTHMIAN CANAL INVESTIGATIONS (Cont'd)
1929-1931
1936-1939
1945-1947
1957-1960
Title
(Principal Member)
U.S. Army Inter-
oceanic Canal Board
of 1929-1931
(Lt Gen E. Jadwin:
1929-1931; Col E.
Graves: 1931)
Third Locks
Project Study
(Govenor of The
Panama Canal)
Isthmian Canal
Studies- 1947
(Governor of The
Panama Canal)
Special Canal
Study - Atrato-
Truando route
(Governor of The
Panama Canal)
Ad Hoc Committee
for Isthmian Canal
Plans (President of
the Panama Canal
Company)
Purpose Authority
To determine the practica- Act of 2 March
bility of providing addi- 1929, 45 Stat.
tional locks and other 1539.
facilities at the Panama
Canal and the practicability
of constructing a ship
canal elsewhere on the
American Isthmus.
To study means of in- Act of 1 May
creasing the capacity of the1936, 49 Stat.
Panama Canal, and to 1256.
propose designs and
cost estimates of facilities
needed.
To investigate the means Act of 28
of increasing the capac- December 1945,
ity and security of the 59 Stat. 663.
Panama Canal to meet
future needs of inter-
oceanic commerce.
To check reliability of
surveys of the Atrato-
Truando canal route.
Secretary of
the Army.
To determine adequacy of Directed by the
the Panama Canal to meet Board of Direc-
needs of commerce to tors of the
1999, and to recommend Panama Canal
plans for improvement Company.
if required.
Results
Recommended that: (1) Madden
Dam be constructed; (2) consid-
eration of a canal across Nicaragua
be continued; and (3) no
immediate steps be taken to
provide more facilities to increase
traffic capacity.
Recommended construction of a
third set of locks, excava-
tion for which began in 1940 and
was suspended in 1942.
Recommended that the Panama
Canal be converted to a sea-level
canal.
Confirmed the validity of con-
clusions of 1947 Isthmian Canal
Studies regarding the Atrato-
Truando route, i.e., that con-
version of the Panama Canal to
sea-level could be accomplished
for less cost.!
Recommended: (1) completion of
a major improvement program
calling for expenditures of up to
$90,000 ,000; (2) initiation of
planning for construction of a sea-
level canal outside of the Canal
Zone by nuclear methods; (3)
development by the AEC of the
capacity to construct a nuclear
canal; and, (4) planning to con-
struct a sea-level canal in the
Canal Zone if plans are not made
to construct a sea-level canal by
nuclear methods by the early
1970's.
TABLE 2-1
SUMMARY OF SIGNIFICANT PREVIOUS ISTHMIAN CANAL INVESTIGATIONS (Cont'd)
Date
1957-1960
1962-1965
1963-1964
1967-1969
Title
(Principal Member)
Board of Consult-
ants, Isthmian
Canal Studies
(S.C. Hollister)
Technical Steer-
ing Committee (Col
M. Harrison: 1962-
1964; Lt. Col W.J.
Slazak: 1964-1965)
Isthmian Canal
Studies, 1964
(President of
the Panama Canal
Company)
Improvement
Program for the
Panama Canal -
1969 (A.T. Kearney
and Co.)
Purpose
To investigate short-
and long-range plans
for the operation,
improvement, and
other matters re-
lating to the adequacy
of the Panama Canal.
To establish guide-
lines of future
studies.
To update traffic pro-
jections and plans to
meet them and to sum-
marize information ona
sea-level canal const-
ructed by nuclear
methods,
To develop and test
improvement plans to
increase capacity of
the present canal.
Authority
Appointed by
the Committee
on Merchant
Marine and
Fisheries, House
of Representa-
tives (House
Resolution
147, 27
February 1957).
Secretary of
the Army.
Directed by the
Board of Direc-
tors of the Pan-
ama Canal
Company
Directed by the
Board of Direc-
tors of the Pan-
ama Canal
Company.
V-15
Results
Recommended: (1) continued
studies of new methods of con-
ventional construction; (2)
further development of nuclear
excavation; (3) no sea-level
canal construction “in the near
future’; and, (4) another review
of the situation by 1970.
Prepared Plan for Study used for
the 1965-1970 study. Updated
1947 cost estimates, and prepared
nuclear excavation report for the
1964 studies.â€
Updated previous studies for a sea-
level canal, particularly one to be
constructed by nuclear means,
and presented detailed analyses of
plans to improve the existing lock
canal, including a third locks
plan.
Development of a plan which
could increase yearly traffic to
26,800 transits.1®
Army LCM unloading supplies at the Curiche Beach Base Road cut through the jungle from the base camp on
Camp on Route 25, Colombia. Smaller vessels of this type Saskatupu Island to the weather station established on a
were used to distribute supplies on the rivers along Route nearby mountain.
17.
Aerial view of Curiche Beach Base Camp. Note LCM Aerial view of the Alto-Curiche weather station estab-
unloading supplies. The beach was also used as an airstrip lished on a jungle hill top on the Pacific side of Route 25.
for fixed wing aircraft.
Since areas under study were very isolated, base camps had to be established at each end of the routes. All supplies were
brought in from the Canal Zone.
V-16
CHAPTER 3
SELECTION OF ROUTES
The Commission’s early efforts were directed to selecting a relatively small number of
potential routes for detailed investigation. In the interest of economy and to accomplish its
work in a reasonable period of time, the number of routes investigated in detail had to be
held to a minimum; yet, no potentially feasible route could be overlooked.
Consideration of routes: At the Commission’s first meeting in May 1965, the Secretary
of the Army and representatives of the Office of the Chief of Engineers presented
recommendations on the preliminary Plan for Study of Engineering Feasibility,* the
organization required for its accomplishment, and the routes to be studied. These
recommendations had been prepared by the Technical Steering Committee* organized in
October 1962 by the Under Secretary of the Army in response to a Presidential directive
that preliminary planning begin for the comprehensive investigation of alternatives to the
existing lock canal. This Committee was responsible for developing plans and cost estimates
for onsite surveys and engineering studies of sea-level canal routes. It coordinated the
participation of the Panama Canal Company, the Corps of Engineers, and the Atomic
Energy Commission in the preparation of Annex III} to the 1964 study. That annex
identified Routes 17 and 25 as being the most promising for nuclear excavation. The
Technical Steering Committee began its work by reviewing recommendations included in
the Isthmian Canal Studies - 1947, in the 1960 reports of the Board of Directors of the
Panama Canal Company, and of the Board of Consultants on Isthmian Canal Studies. Then,
between November 1962 and June 1964, the Committee developed a detailed plan for
onsite surveys, data evaluation, and engineering analysis of the routes recommended for
further study by the 1947 and 1960 reports. These routes were selected from among the
thirty presented in the 1947 report, shown on the accompanying map (Figure 3-1) and
listed in Table 3-1.
Actions by the Commission: The Plan for Study was presented to the Commission on
17 September 1965. As subsequently approved, the plan contemplated investigation of the
following alternatives:
— Route 14—The present lock canal alinement in the Canal Zone converted to a
sea-level canal by conventional excavation methods and straightened to eliminate
turns greater than 35 degrees.
*Membership of the Committee included representatives of the Corps of Engineers, Atomic Energy Commission, and
Panama Canal Company.
fT Construction of an Isthmian Sea-Level Canal by Nuclear Methods — 1964.
V-17
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i Sts
INTEROCEANIC CANAL ROUTES
EL SALVADOR
V-18 FIGURE 3
TABLE 3-1
CANAL ROUTES CONSIDERED
BY THE TECHNICAL STEERING COMMITTEE*
MEXICO
AND COSTA
RICA
ALTERNATIVE
PANAMA SEA-LEVEL
ROUTES
CANAL ZONE
AND VICINITY
CALEDONIA
BAY ROUTES
PANAMA TUIRA
AND RIVER
COLOMBIA ROUTES
ATRATO
COLOMBIA RIVER
ROUTES
VIA
LAKE
VIA MANAGUA
LAKE
NICARAGUA} | NICARAGUA
*Route numbering based on the 1947 Study.
V-19
1 Tehuantepec
2 San Juan del Norte—Fonseca Bay
3 San Juan del Norte—Realejo
4 San Juan del Norte—Tamarindo
5 San Juan del Norte—Brito
6 San Juan del Norte—San Juan del Sur
7 San Juan del Norte—Salinas Bay
8 San Juan del Norte—Salinas Bay
9 Chiriqui
10 Chorrera—Lagarto
11 Chorrera—Limon Bay
12 Chorrera—Gatun
13 Panama Parallel
14 Panama Sea-Level Conversion
15 Panama Canal
16 San Blas
17 Sasarda—Morti
18 Aglaseniqua—Asnati
19 Caledonia—Surcurti
20 Tupisa—T iati—Acanti
21 Arquia—Paya—Tuira
22 Tanela—Pucro—Tuira
23 Atrato—Cacarica—Tuira
24 Atrato—Peranchita—T uira
25 Atrato—T ruando
26 Atrato—Napipi
27 Atrato—Napipi—Doguado
28 Atrato—Bojaya
29 Atrato—Baudo
30 Atrato—San Juan
— Route 17—A sea-level canal through the Darien Province of eastern Panama to be
constructed primarily by nuclear excavation methods.
— Route 25—A sea-level canal through northwestern Colombia to be constructed by a
combination of nuclear and conventional excavation methods.
— Route 8—A sea-level canal along the Nicaragua-Costa Rica border to be constructed
primarily by nuclear excavation methods.*
Initially, funds were sought and approved for field surveys of Routes 17 and 25 only.?
Data available from previous studies were considered adequate for evaluation of Routes 8
and 14. In 1966 the Commission directed the Engineering Agent to review and update
previous cost estimates for improving the existing lock canal (Route 15) and for
constructing a new lock canal in Nicaragua (Route 5). These estimates were to provide a
base against which the several sea-level canal options could be measured in terms of their
capacities and their costs of construction, operation, and maintenance.
The Commission’s preliminary evaluation indicated that a sea-level canal in the vicinity
of the existing lock canal, which would not interfere with its operation, might be preferable
to Route 14. Consequently, in June 1966, Route 10 was added to the conventionally
excavated alternatives and Congress subsequently provided additional funds for its
investigation.
In 1969 the Government of Colombia suggested that the United States, Colombia, and
Panama investigate Route 23 jointly. The Commission advised Colombian representatives
that, although it no longer had the capability to conduct detailed investigations in the field,
an analysis of this route, based on available data, would be included in the present report.
Thus, the Commission identified eight potentially feasible routes requiring investigation
and evaluation. They are listed below and shown in Figure 3-2.
Route Type of canal/
number Route name Country excavation method
5 San Juan del Norte- Nicaragua and Lock/conventional
Brito Costa Rica
8 San Juan del Norte- Nicaragua and _ Sea-level/conventional or
Salinas Bay Costa Rica nuclear
10 Chorrera-Lagarto Panama and Sea-level/conventional
Canal Zone
14 Panama Sea-level Canal Zone Sea-level/conventional
Conversion
15 Panama Canal Canal Zone Lock/conventional
17 Sasardi-Morti Panama Sea-level/conventional —
nuclear combination
23 Atrato-Cacarica- Panama and Sea-level/conventional or
Tuira Colombia sea-level/conventional —
nuclear combination
25 Atrato-Truando Colombia Sea-level/conventional —
nuclear combination
*The Plan for Study recommended only a conceptual study of Route 8, to determine whether additional investigation of
this alternative was warranted.
V-20
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V-21
FIGURE 3-2
Since Routes 8*, 14,f and 23 each have two options, 11 basic alternatives were
considered in the Study of Engineering Feasibility. These alternatives included two lock
canals and nine sea-level canals, four of which would involve nuclear excavation. The
principal considerations in their selection are shown in Table 3-2.
*Route 8 Conventional, which follows an angular course to take advantage of low elevations, and Route 8 Nuclear, which
is fairly direct.
{Referred to in this study as Route 14 Combined, which cuts through the Continental Divide generally coincident with the
present canal; and Route 14 Separate, which cuts through the divide approximately 1 mile southwest of the present canal
to minimize the effects of unstable slope conditions on traffic during construction.
V-22
TABLE 3-2
INITIAL SCREENING OF PREVIOUSLY IDENTIFIED
INTEROCEANIC SEA-LEVEL CANAL ROUTES
Reasons for Selection/Rejection for Further Study
Length Divide Sea-Level Canal
Route (Statute Elevation Conventional Sea-Level Canal
Number Route Name Country Miles) (Feet) Excavation Nuclear Excavation
Tehuantepec Mexico Mexico not receptive; Mexico not receptive; area
excessive excavation moderately populated.
(estimated 6 billion
cubic yards)°.
San Juan del Nicaragua Longer than Route 8; Longer than Route 8; requires
Norte-Fonseca Bay and Costa requires draining of draining of Lake Nicaragua.
Rica Lake Nicaragua.
San Juan del Nicaragua Longer than Route 8; Longer than Route 8; requires
Norte-Realejo and Costa requires draining of draining of Lake Nicaragua.
Rica Lake Nicaragua.
4 San Juan del Nicaragua 250 200 Longer than Route 8; Longer than Route 8; requires
Norte-Tamarindo and Costa requires draining of draining of Lake Nicaragua.
Rica Lake Nicaragua.
5 San Juan del Nicaragua 177° 153 Requires draining of | Requires draining of Lake
Norte-Brito and Costa Lake Nicaragua. Nicaragua.
Rica Selected as a lock
canal for comparative
purposes.
6 San Juan del Nicaragua 162 605 Requires draining of | Requires draining of Lake
Norte-San Juan and Costa Lake Nicaragua. Nicaragua.
del Sur Rica
7 San Juan del Nicaragua 167 760 Requires draining of Requires draining of Lake
Norte-Salinas and Costa Lake Nicaragua. Nicaragua.
Bay (via Lake Rica
Nicaragua)
8 San Juan del Nicaragua 176° 760° Selected for further Selected for further study as the
Norte-Salinas and Costa 140° 1000° study as the most favor-most favorable in the Nicaragua-
Bay Rica able in the Nicaragua- Costa Rica area.
Costa Rica area.
9 Chiriqui Panama 55 5000 Excessive excavation Excessive divide height.
(estimated 69 billion
cubic yards)*.
91947 values, except where noted; length includes ocean approaches.
Dyalues from 1970 studies.
c
Nuclear route.
V-23
TABLE 3-2
INITIAL SCREENING OF PREVIOUSLY IDENTIFIED
INTEROCEANIC SEA-LEVEL CANAL ROUTES (Cont'd)
Reasons for Selection/Rejection for Further Study
Route
1
mber Route Name
0 Chorrera-Lagarto
Chorrera-Limon
Bay
Chorrera-Gatun
Panama Parallel
Panama Sea-Level
Conversion
Panama Canal
(Lock canal only)
San Blas
Sasardi-Morti
Aglaseniqua-
Asnati
Caledonia-
Surcurti
Length Divide
STE Excavation
Miles)
Sea-Level Canal
Conventional
(Feet)? Excavation
Selected for further
study as comparable
in cost to Route 14.
More expensive than
Route 10 by $0.5
billion®.
Less favorable than
Route 14.
Much more expensive
than Route 14°.
Selected for further
study as least costly
routeâ€
Existing
channel
Selected as |ock canal
for comparative
purposes.
Twice as much excava-
tion as for Route 14
because of high divide.
About twice as much
excavation as Route
14.
More excavation and
poorer alinement
than Route 17.
More excavation
and poorer alinement
than Route 17.
91947 values, except where noted; length includes ocean approaches.
b
Values from 1970 studies.
V-24
Sea-Level Canal
Nuclear Excavation
Too close to population centers.
Too close to population centers.
Too close to population centers.
Too close to population centers.
Too close to population centers.
Too close to population centers.
Too close to population centers.
Selected for further study as most
favorable nuclear route in Panama.
Poorer alinement than Route.17.
Poorer alinement than Route 17.
Route
Number
Route Name
Tupisa-T iati-
Acanti
Arquia-Paya-
Tuira
Tanela-Pucro-
Tuira
Atrato-Cacarica-
Tuira
Atrato-Peranchita-
Tuira
Atrato-Truando
Atrato-Napipi
Atrato-Napipi-
Doguado
Atrato-Bojaya
Atrato-Baudo
Atrato-San Juan
TABLE 3-2
INITIAL SCREENING OF PREVIOUSLY IDENTIFIED
INTEROCEANIC SEA-LEVEL CANAL ROUTES (Cont'd)
Length
(Statute Elevation
a
Country Miles)
Panamaand 95
Colombia
Panama and 135
Colombia
Panama and 130
Colombia
b
Panama and 146
Colombia
Panama and
Colombia
Colombia
Colombia
Colombia
Colombia
Colombia
Colombia
Reasons for Selection/Rejection for Further Study
Divide Sea-Level Canal,
Conventional
(Feet) Excavation
Almost three times
the excavation re-
quired on Route 14.
Excessive excavation
because of length
and high divide.
Excessive excavation
because of length and
high divide.
Selected for limited
study at the request
of Colombia.
About twice the ex-
cavation required on
Route 14; poor
alinement.@
About twice as much
excavation as Route
14.
About twice as much
excavation as Route
14.
Greater excavation
than Route 26.
Greater excavation
than Route 27.
Greater excavation
than Route 28.
Greater excavation
than Route 29.
91947 values, except where noted; length includes ocean approaches.
Values from 1970 studies.
V-25
Sea- Level Canal,
Nuclear Excavation
Longer than Route 17.
Length and divide elevation
excessive.
Length and divide elevation
excessive.
Selected for limited study at
the request of Colombia.
Less attractive than Route 17
because of length and cost.
Selected as the most favorable
Atrato River route.
Less favorable than Route 25.
Less favorable than Route 25.
Less favorable than Route 25.
Less favorable than Route 25.
Less favorable than Route 25.
Radar equipment for the meteorology program, shown A subsurface drilling rig in the jungle on Route 25. Drill
here atop Pidiaque Hill in Panama, was shipped in from sites were hacked out of the jungle and their equipment
the United States. Supplies for the station’s operation brought in by helicopter. Supplies were flown in and the
were delivered by helicopter. core samples were flown out.
Generators such as this supplied the power necessary for The U.S. Air Force provided helicopter support when
the radar stations. All fuel and supplies came through the possible. Helicopter is preparing to deliver a load of
Canal Zone. equipment to a jungle drilling site.
The jungle areas investigated imposed unusual problems of transportation and supply.
V-26
CHAPTER 4
CHARACTERISTICS OF THE REGIONS UNDER STUDY
The canal routes evaluated in this study traverse four regions, each of which has
distinctive physical characteristics:
— Nicaragua-Costa Rica Border (Routes 5 and 8).
— Panamanian Isthmus (Routes 10, 14 and 15).
— Darien Isthmus (Routes 17 and 23).
— Atrato-Truando (Routes 23 and 25).
The NicaraguaCosta Rica border region (Routes 5 and 8): The dominant terrain
feature of this area is Lake Nicaragua, whose surface elevation is approximately 105 feet
above sea level. It is about 100 miles long, and nearly 45 miles across at its widest point; its
maximum depth is over 200 feet. Lake Nicaragua is fed by the Tipitapa River, the outlet of
Lake Managua, and drained by the San Juan River which discharges into the Atlantic Ocean,
some 80 miles away. The distance between the Atlantic and Pacific Oceans depends upon
the route, varying from approximately 125 to 170 miles.
The Continental Divide between Lake Nicaragua and the Pacific Ocean is a low, narrow
ridge with a minimum elevation of about 150 feet, the divide’s lowest point in Central
America. East of Lake Nicaragua other ridges separate the lake’s drainage basin from the
Caribbean. This so-called East Divide, which is generally higher than 400 feet, is broken by
the San Juan River which passes through it below elevation 100 feet.
Both the eastern and western ridges consist mainly of extrusive igneous rocks with some
sedimentary bedrock, underlying a thin layer of overburden. The delta of the San Juan
River is composed of alluvial deposits reaching depths of 100 to 200 feet or more. The
region contains a number of active volcanoes. Upland soils are predominantly lateritic.
Vegetation includes both evergreen and deciduous trees, and is classified as tropical moist
forest.
The climate of the Nicaragua-Costa Rica region is tropical. Temperatures seldom exceed
95°F or fall below 70°F. Rainfall averages about 250 inches a year on the Atlantic coast,
decreasing to about 60 inches on the Pacific. There is a dry season from November to May
on the Pacific side; on the east coast seasonal changes are less distinct. East of the lake
humidity remains high throughout the year; to the west it falls off considerably during the
dry season. Prevailing surface winds are 10 to 15 miles per hour from the northeast. Pacific
tides are semidiurnal with an average range of 6.2 feet and a maximum of 9.7 feet. Tides on
the Atlantic coast are irregular, having an average range of 0.7 feet and a maximum of 2.6
feet.
V-27
AREA OF
COVERAGE
CARIBBEAN SEA
LOCATION MAP
SCALE IN MILES
0 100
CORINTO 85 Mi.
LAKE NICARAGUA
BRITO
‘2 ~
SAN JUAN *\
VOLCAN CONCEPCION
ISLA DE OMETEPE
=
DEL SUR \
RIO GRANDE
SALINAS IGOR.
PACIFIC
OCEAN
NICARAGUA-COSTA RICA BORDER AREA
SCALE IN MILES
V-28 10-0) ees eel FIGURE 41
DEPTH IN FATHOMS
2
The Caribbean coast, looking
north, at the site of the Atlantic
terminus of Route 8. The town of
San Juan del Norte is at the right
of the picture.
The confluence of the San Carlos
(left) and San Juan (right) Rivers.
The Pacific shoreline, looking
north, in the vicinity of Route 5.
THE NICARAGUA-COSTA RICA BORDER AREA
FIGURE 4-2
V-29
The southeastern shore of Lake Nicaragua at the headwaters of the San Juan River.
The cloud shrouded volcano Concepcion as seen from the Pan American Highway.
NICARAGUA-COSTA RICA BORDER AREA
FIGURE 43
V-30
The mouth of the Sapoa River on the south shore of Lake Nicaragua.
Railcar on a pier at Granada on Lake Nicaragua.
NICARAGUA-COSTA RICA BORDER AREA
FIGURE 4-3
V-31
Sy ~-
as
East of Lake Nicaragua the area traversed by the canal alinements is largely
undeveloped. It is covered by thick jungle with only a few small clearings devoted to crops
and grazing. Population density in this area is about five inhabitants per square mile. The
divide, its immediate western slopes, and the shores of Lake Nicaragua are more heavily
populated and developed, averaging about 25 inhabitants per square mile. The principal
industries and population centers of both Nicaragua and Costa Rica lie approximately 100
miles away from the proposed canal routes. Most of Costa Rica’s 1.7 million people are
located in the region near San Jose, while three-quarters of Nicaragua’s population of 1.9
million live near the shores of Lake Nicaragua and Managua.
The population in the area that would be affected by canal excavation is primarily
mestizo, with small percentages of Caucasians, Negroes and Indians. The literacy rate is low
and health and sanitation standards are poor. Construction would not adversely affect
primitive cultures having anthropological value.
Most archeological finds in the area of southern Nicaragua and western Costa Rica have
been on the Pacific slopes adjacent to Lake Nicaragua. Numerous stone statues up to four
meters in height have been noted on the shores and islands of the lake.!? Northwestern
Costa Rica also appears archeologically rich; however, the most spectacular artifacts, such as
jade and gold objects, come from looted and undocumented sites. Since a canal would
generally follow natural drainage systems, it would cross areas of high archeological
potential, which are most often found clustered along rivers and other natural sources of
water. To date, nevertheless, there have been no major archeological finds in the immediate
areas of the proposed routes.
Existing shipping facilities capable of serving a canal are extremely limited. On the
Pacific side, deep water lies between % and 3 miles from the coast. On the Atlantic, cargo
vessels are unable to approach closer than about 3 miles from shore in the vicinity of the
routes. The principal Pacific ports are Corinto, Nicaragua, and Puntarenas, Costa Rica. Both
of these ports could accommodate modern cargo vessels; however, they are too far from the
routes to serve as supply bases. Only the shallow draft* harbors at Bluefields, Nicaragua, and
Puerto Limon, Costa Rica, are available on the Atlantic side.
The Panamanian Isthmus (Routes 10, 14, and 15): In this area the American Isthmus is
both narrow and low. The distance between oceans here is approximately 30 to 60 miles,
depending on the alinement. For Routes 14 and 15 the valley of the Chagres River, now
largely submerged beneath Gatun Lake, offers an easy approach from the Atlantic Ocean to
the Continental Divide through which there are passes at elevations of approximately 300
feet.
The geology of the area is complex and characterized by abrupt transitions from
competent rock to materials of very low strength. The terrain on the Pacific side, which
includes the Continental Divide, is dominated by conical hills, capped by basalt or
agglomerate and surrounded and underlain by weak sedimentary and pyroclastic rocks.
*These harbors are capable of handling vessels at 12-foot draft or less.
yLimited small boat facilities exist at the Nicaraguan towns of San Juan del Sur on the Pacific and San Juan del Norte on
the Atlantic
CARIBBEAN
; SEA
AREA OF ,
COVERAGE
CLANR TOR BAR SAG SE LA
LOCATION MAP
SCALE IN MILES
100
\ 4
‘ LG ‘
Sh CRISTOBAL
/GATUN DAM XZ GATUN LOCK
s oy) GATU
af :
[es
/ z es SH ~
\ TIGER ISLANDS >
mcoBAL\ // OL) gf
f \ NG
s A YN oF \%
*LAGARTO
PAN AMER;
> aaa SEICAN Hy
\
ee
DIVIDE CUT ;
ieee
TABOGA ISLA i) | <7 Tasocullia ISLAND oe
\ pees Re) ae
hes —
) me ee
oP AC Rien E A N -
= Py x
THE CANAL ZONE AND VICINITY
: SCATE IN mires V-33
a
DEPTH IN FATHOMS
Bice 4-4
The Caimito River and Pacific coastline, looking southeast from the proposed Route 10 terminus.
Looking northeast along the Pan American Highway from the vicinity of the alinement. The bridge in the foreground
crosses the Caimito River.
ROUTE 10 AREA
FIGURE 4-5
V-34
The alinement immediately north of the Continental Divide, looking northeast.
ROUTE 10 AREA
FIGURE 4-5
V-35
Materials in the central sector of this area vary from weak clay shales and soft altered
volcanics to relatively stronger sandstones and basalts. The ridges along the Atlantic coast
consist of medium hard sandstones.
Soils in this portion of the Isthmus are predominantly lateritic. The scattered cleared
areas exhibit the developmental pattern typical of shifting subsistence agriculture. Most of
the ground is covered by a tropical moist forest with a multi-storied canopy. Small areas of
savanna are found in the southern portion and premontane evergreen forest* occupies the
upland and divide areas.
The climate is tropical with temperatures averaging 83°F and ranging between 65°F and
95°F. Mean relative humidity is 80 percent. A distinct rainy season extends from mid-April
to mid-December. Annual rainfall varies from 130 inches on the Atlantic coast to 70 inches
on the Pacific. Occasionally winds on the Atlantic side cause hazardous seas.
Tides in the Atlantic are irregular, with an average range of 0.7 feet and a maximum of
2.6 feet. Pacific tides are semidiurnal, having an average range of 12.7 feet and a maximum
recorded range of 21.7 feet.
The urban centers, Panama City (population 415,000) and Colon (population 85,000),
are situated at the ends of the Panama Canal and are linked by a railroad and two-lane
highway. Both cities are close to excellent harbor facilities operated by the Panama Canal
Company—Cristobal on the Atlantic side and Balboa Harbor on the Pacific. Essential ship
services, such as repair and bunkering, are available.
The area lying west of the Canal Zone along Route 10 has undergone moderate
development. The rolling hills on the Pacific side of the Continental Divide have been cleared
of the tropical jungle which once covered the entire Isthmus. This region and the Caribbean
coastal area are used for farming and grazing. Further inland the area is covered with jungle
growth, broken only by a few clearings given over to slash-and-burn cultivation. Most of the
land along the alinement is publicly owned. La Chorrera (population 38,000) on the Pan
American Highway is the only significant town in the vicinity of Route 10.
Two-thirds of Panama’s population are mestizos. The rest is made up of Indians,
Negroes, Caucasians and Asiatics. The predominant cultural heritage is Spanish. The area
within and immediately surrounding the Canal Zone contains remains which span much of
American prehistory, the earliest local manifestations of which appear in the “fishtailâ€
fluted projectile points from Madden Lake.?° These may be part of the general Paleo-Indian
horizon of the Americas, dated from remains found elsewhere to around 7000 B.C. and
earlier. A recent project has revealed at Panama Viejo a culture based largely on fishing and
shellfish gathering—a “rather widespread group of related tribes....distributed over the Canal
Zone, and Pearl Islands, and adjacent territory to the east.â€*’ The relationship of this
culture to others from western Panama—the Venado Beach culture (tentatively dated as
about 1000 years old) and the Cocle manifestation of late prehistory—is not yet known.
Undoubtedly, other sites lie within the area under consideration.
The Route 10 alinement is readily accessible from the Canal Zone. Roads exist between
Panama City and La Chorrera, and between Colon and Lagarto. Gatun Lake offers a good
means of access to the hinterland. Apart from the Panama Canal terminals, coastal harbor
facilities are extremely limited.
*This is a low dense evergreen forest with abundant epiphytes (parasitic moss, lichens, orchids, etc.).
V-36
The Darien Isthmus of Panama (Routes 17 and 23): Very little information on this area
was available prior to the present study. Some topographic and geologic data were obtained
from the Isthmian Canal Commission Studies of 1899-1901, from geological reconnaissance
in 1946-47 and from recent aerial photography; however, they were not adequate to permit
evaluation of the feasibility of constructing a canal. Consequently, the Commission
undertook a program of field surveys in the vicinity of the Route 17 alinement. The results
obtained from this program, conducted in the period 1966-1969, are summarized in Table
4-1. These data apply only indirectly to Route 23.
TABLE 4-1
DATA COLLECTION PROGRAM IN THE DARIEN REGION, 1966-1969
Hydrology
Meteorology
Medico-Ecology
Bioenvironment
Acoustic waves
Ground motion
A 57-mile baseline survey was made. More than 200 miles of cross
section were surveyed.
Geologic reconnaissance included surveys of an area of more than 290
square miles. Subsurface exploration consisted of 20 holes, totaling
about 12,000 feet of core drilling. Material was tested in place by
geophysical methods and borehole photography. More than 450
samples were subjected to laboratory testing for paleontologic, petro-
graphic, chemical, and physical characteristics.
Fourteen rainfall, 5 stream, 2 sediment and 2 tide gages were installed,
and records were obtained from November 1966 to October 1968.
Two weather stations were established, one near each end of Route 17;
surface and upper air observations were made from July 1966 to De-
cember 1967.
Insect and animal specimens were collected and identified from this
study area and the Atrato-Truando region of northwestern Columbia
in 1967; blood of specimens was analyzed to determine vectors
and reservoirs of human disease.
Native populations were studied to determine living habits and ag-
ricultural systems. Plants and animals, both marine and terrestrial,
were studied to determine their relation to human food chains.
Atmospheric conditions were measured up to 200,000 feet, with
wind speed, direction and temperature being measured by an average of
5 instrumented rockets per week launched from Battery McKenzie in
the Canal Zone. Windowpane surveys were made.
A network of 10 seismographs was installed (2 in Panama, 8 in Columbia)
and operated from June 1967 to March 1969. Structural surveys were
made in major population centers.
V-37
View, looking northwest, across Limon Bay from Colon, Panama. The Atlantic entrance to Route 14 would be through
Limon Bay.
The Route 14 alinement, looking northwest, Cerro Gordo is the left background; the Panama Canal is on the right.
ROUTE 14 AREA
FIGURE 4-6
V-38
View of the proposed Pacific entrance of Route 14, looking south from Balboa toward the Thatcher Ferry Bridge. The
bridge is a major link in the Pan American Highway.
=
View across Miraflores Lake, looking northwest. Miraflores Locks, shown in the foreground, raise and lower ships 54 feet
in 2 steps. The Pedro Miguel Locks are in the background.
ROUTE 14 AREA
FIGURE 4-6
V-39
The battleship New Jersey passing through the Pedro Miguel
Locks enroute to Vietnam in 1968. The New Jersey is one of
the largest naval vessels to transit the canal. Most modem
aircraft carriers are too large to use the canal.
PANAMA CANAL
FIGURE 4-7
V-40
Almost a mile long, the Gatun
Locks permit ships to be
raised or lowered approxi-
mately 85 feet in three steps.
Here two ships are being
locked up into Gatun Lake.
The dredged channel in the
background leads to the Carib-
bean Sea.
AR
Approximately 8 miles long,
Gaillard Cut produced most of
the major problems encoun-
tered during the construction
of the Panama Canal. The cut
widening shown in this view,
looking southwest along the
canal, is now complete.
The Darien region’s remoteness from major population centers, its narrow width and
relatively low elevations along the Continental Divide make it attractive for the employment
of nuclear excavation techniques. Indeed, it was these features of Route 17 that brought
about the present study.
The Continental Divide lies about 10 miles west of Caledonia Bay. Most of the low
passes in this area are too narrow to accommodate a sea-level canal; however, Sasardi Pass at
an elevation of about 1,000 feet appears suitable for nuclear excavation. In the central
sector the Chucunaque River, its tributaries and the Sabana River flow southeasterly
through a valley about 20 miles wide, with an average elevation of about 200 feet. This
valley is separated from the Gulf of San Miguel on the west coast by the Pacific Hills,
through which the best canal alinement would pass at an elevation of 750 feet.
The Continental Divide consists largely of basaltic flows with pyroclastic interbeds,
while material in the Chucunaque Valley is mainly weak clay shales. The Pacific Hills, a series
of anticlinal ridges and fault blocks, are formed of basic volcanic rocks and calcareous tuffs.
Along the eastern edge of the Darien region, coinciding with the Panama-Colombia
border, the Continental Divide crosses from the Atlantic to the Pacific side of the Isthmus.
Relatively low divide elevations can be found between the headwaters of the Tuira River,
flowing northwesterly to the Gulf of San Miguel, and the Cacarica River, flowing easterly to
the Atrato River. Although surveys of this area have been very limited, it is generally
believed that the lowest divide elevations here are between 400 and 500 feet.
Data available from previous investigations and a geological reconnaissance conducted
in support of this study, indicate that the divide in this sector is composed of tuffs,
limestone, and interbedded sandstone and shales. Except for a short reach of Pacific tuffs
near La Palma, the lower Tuira River flows mostly through sedimentary formations, overlain
near the coast by marine swamp deposits.
The Darien’s climate is essentially the same as that of the Canal Zone. Annual rainfall
averages about 100 inches at the Atlantic coast, 120 inches along the Continental Divide and
80 inches at the Pacific.
The area is generally covered by heavy tropical jungle. There are four major types of
forest in Panama and all may be found in the Darien Isthmus. The predominant cover is
tropical moist forest typified by a tall deciduous canopy over a stratum of evergreens and
palms. Bordering the marshy areas of the Gulf of San Miguel are mangrove forests. River
valley flood plains support hardwood forests, principally of cativo. In the area of the
Continental Divide and other scattered uplands the vegetative cover is classed as premontane
wet forest.
Soils in the vicinity of Route 17 are primarily lateritic, except in the Chucunaque River
Valley where the soils are generally alluvial. The Caribbean coastline is bordered by a
narrow strip of beach sands while the Pacific side of the isthmus consists of marsh-type soils.
Atlantic tides are irregular, with a mean range of 1.0 foot and a maximum of 2.7 feet.
Approaches to the Atlantic shore are exposed to storms and there are no natural harbors or
port facilities, although some local protection is provided by the irregular coastline and the
islands in Caledonia Bay. Deep water lies about 2 miles offshore.
The Pacific términus is within the Gulf of San Miguel. La Palma provides some port
facilities, as well as navigable depths for shallow draft shipping. Although there is deep water
V-41
CARTBBEAWN SEA
AREAOF
COVERAGE
LOCATION MAP
SCALE IN MILES
es ey OLOMBIE
GULF OF
SAN MIGUEL
I | Fi
o
PACIFIC OCEAN &
‘SZ /-TERESITA «
yr
:
SALTO.
HIGHLANDS
S
Tp ROURE 25
RIO CURICHE
HUMBOLDT BAY
LEGEND
ee a EXCAVATION
SN CONVENTIONAL EXCAVATION
XN
XS
XS
PANAMA-COLOMBIA BORDER AREA
SCALE IN MILES
V-42 B05 1015) 205 300 35 FIGURE 48
DEPTHS IN FATHOMS )
within % mile of the shoreline, there are many shallow areas which would have to be
dredged for an approach channel. Tides there are semidiurnal, with a mean range of 14.3
feet and an estimated maximum range of 23.0 feet.
Inhabitants of the Darien region include several ethnic groups. La Palma, the capital of
Darien Province, is a coastal town of about 1,500 people of mixed origin. Inland, on the
Pacific side, primitive Choco Indians live in family units. Isolated Cuna Indian villages dot
the interior river valleys on the Atlantic side. The Cunas also inhabit many of the San Blas
Islands along the Atlantic coast, traveling to the mainland to farm, hunt, and obtain fresh
water.
The Panamanian government has a special agency to deal with the San Blas Cunas,
whose culture has been thoroughly studied. The interior Cunas avoid strangers and relatively
little is known about their culture and tribal organization. Hostility to the white man has
been passed from generation to generation since the time of the conquistadores. Both the
San Blas and interior Cunas could be expected to resist any efforts to move them in order to
permit canal construction. The Choco Indians might be more amenable to such a shift.
Little is known of the archeology of the Darien Isthmus. The area appears to have been
thickly settled and prosperous at the time of the conquest;'? however, there have not yet
been any major archeological finds in the immediate areas of the proposed routes.
The Atrato-Truando region of northwestern Colombia (Routes 23 and 25): The 1947
Isthmian Canal Studies made it apparent that more information on the Colombian routes
was needed. Consequently, the Special Canal Study - 1949 was conducted to collect data on
topography, geology, and climatic conditions.'’ This effort, together with a number of
independent reports, provided background material for planning the present study. To
permit evaluationof Route 25, field surveys were made, similar to those along Route 17.
This work was performed during the period 1967-1969. Its results are summarized in Table
4-2.
The American Isthmus in the Atrato-Truando region of the Choco Province of
northwestern Colombia is characterized by high, rugged terrain within sight of vast estuarine
marshes. Because of its remote location and the relative ease and low cost of dredging
lowland swamp areas, it holds promise for the application of a combination of nuclear and
conventional construction techniques. Here the distance between the Atlantic and Pacific is
approximately 100 miles. The dominant terrain feature is the Atrato River which flows
through the northern half of the region from its confluence with the Truando River to the
Gulf of Uraba on the Atlantic. The Continental Divide lies on the Pacific side, in
mountainous terrain nearly 20 miles wide, through which there are passes at elevations
between 900 and 1,000 feet. The Curiche River has its headwaters in the divide highlands
and flows westward for about 20 miles before emptying into Humboldt Bay on the Pacific.
Soils in the upper Tuira River Valley and along the Continental Divide separating
Panama and Colombia are primarily lateritic. The Atrato Valley is a broad plain composed
of marsh-type soils. The Choco Highlands, which form the Continental Divide in this region,
are high, narrow ridges formed by the uplifting of Choco volcanic rocks. Soils are lateritic
and tend to be shallow.
The upland areas of the divide and the extensions of the Choco Highlands are primarily
covered with dense, low evergreens intermixed with abundant epiphytes and woody vines.
V-43
Typical view of the Pacific coastline, looking west, near the proposed Pacific entrance to Route 17.
View along the Continental Divide, looking south.
ROUTE 17 AREA
FIGURE 4-9
V-44
Chucunaque Valley centerline trail from Santa Fe built for the data collection program.
Typical Cuna village in remote jungle near the Route 17 alinement.
ROUTE 17 AREA
FIGURE 4-9
V-45
TABLE 4-2
DATA COLLECTION PROGRAM IN THE ATRATO RIVER REGION
Topography A 78-mile baseline survey was made from the Pacific to the Atrato River.
About 160 miles of cross sections were surveyed.
Geology Aerial mapping of surface geology included geophysical surveys of an
area of about 540 square miles. Sub-surface exploration consisted of 22
holes with an aggregate footage of about 9,000 feet. Material was ex-
amined in place by downhole geophysical methods and borehole photo-
graphy. More than 300 samples were tested to determine paleontologic,
petrographic, chemical, and physical characteristics.
Hydrology Eighteen rainfall gages, 8 stream gages, and a tide gage (on the Pacific)
were installed and records obtained from July 1967 to December 1968.
Six combination stream and rain gages were operated until May 1969.
Meteorology Two weather stations — one near each terminus of the route — were
established. Surface and upper air observations were made from July
1967 through June 1969.
Medico-Ecology, Field data collected and discussed previously in relation to the Darien
Bioenvironment, Isthmus of Panama are also applicable to this study area.
Acoustic waves,
Ground motion
The principal remaining forests are located on rolling hills between the Atrato flood plain
and uplands and consist of multi-storied hardwoods. The flood plain itself is covered with
tall grasses, cane-like palms and brush-type plants that form impenetrable thickets.
The tropical climate is generally similar to that of the other routes. Average annual
rainfall varies from 80 inches at the Gulf of Uraba to 200 inches on the Pacific side.
Atlantic tides are irregular, with a mean range of 1.1 feet and a maximum of 2.9 feet.
Pacific tides are regular, having a mean range of 8.4 feet and an estimated maximum of 14.0
feet.
This region is even less developed than the Darien Isthmus of Panama. Within the area
which would be affected by a sea-level canal, the Atrato Swamp is generally uninhabited; an
exception is the village of Rio Sucio. Near the Continental Divide are occasional clearings
along the streams where Choco Indians have settled. Selective lumbering for mahogany is
carried on in this region.
The only harbor facilities on the Atlantic side are at the Caribbean port of Turbo,
Colombia. The channel there is maintained at 12 feet, with 10-foot depths available along
harbor piers. Deep water lies about 4 miles away from the port. Navigation on the Atrato
River is presently restricted to shallow-draft vessels. On the Pacific, Humboldt Bay provides
V-46
a natural roadstead. Deep water is found within 1% miles of the coast. The Pacific beach
slopes gently and during low tides can be used as a landing strip for helicopters and small
fixed-wing aircraft.
Most inhabitants of the areas affected by the proposed canal are either mestizo or
Negro. The two major Indian groups, Choco and Cuna, are siowly being assimilated by these
relative newcomers or are moving toward the mountains of Panama. Canal construction
could be expected to make a drastic change in the Indian way of life.
Little is known of the archeology of this region. To date, no significant finds have been
made; however, if a canal were built, it would probably follow natural drainage patterns
where such finds are most likely to occur.
Summary table: Characteristics of these four regions are summarized in Table 43.
V-47
Â¥,
8s, yy ta
The Teresita base camp on the banks of the Truando River, used for data collection,
ROUTE 25 AREA
FIGURE 4-10
V-48
Loma Teguerre weather station located near the Atlantic end of Route 25. Station was built on one of the few high points
of land in the Atrato low lands.
Continental Divide area looking east from Alto Curiche weather station. The light spot at left center is smoke from burning
off a site for subsurface geologic investigations during data collecting activities.
ROUTE 25 AREA
FIGURE 4-10
V-49
Width:
Terrain:
Geology:
Tide range
(avg/peak)
Coasts:
TABLE 4-3
SUMMARY OF REGIONAL CHARACTERISTICS
Nicaragua-Costa
Rica Border Region
125-170 miles.
The lowest pass on the Con-
tinental Divide is at about
elevation 150 feet. Lake
Nicaragua, 100 miles long
and 45 miles wide, averages
105 feet. Mountain ranges
east of the lake are broken
by passes at about 400 feet
and the San Juan Valley at
about 120 feet. Dense jungle
exists throughout except for
cleared areas near the lake
and in the vicinity of the
divide.
Mainly volcanic tuff; assumed
favorable for canal con-
struction; subsurface
geology is not well
known.
Pacific 6.2 ft/9.7 ft;
Atlantic 0.7 ft/2.6 ft.
Pacific deep water available
within 1/2 mile, and pro-
tected harbor sites exist.
Atlantic deep water is as far
as 3 miles offshore with no
good natural harbor sites
available.
Panamanian
Isthmus
30-60 miles.
The lowest pass on
the Continental
Divide is at about
elevation 300 feet.
Gatun Lake on the
Atlantic side
of the
divide averages 85
feet. Jungle g
covers inland
the rolling hil
rowth
areas;
Isin
coastal areas are
partially cleared.
Varies from weak
shales and sand-
stones to hard
basalt and ag-
glomerates.
Pacific 12.7 ft/
21.7 ft; Atlantic
0.7 ft/2.6 ft.
Deep water is
close
in on the Atlantic
side, 15 miles
out
on the Pacific side.
The Atlantic side
offers little natural
protection, the
Pacific offers
protection.
fair
V-50
Darien
Isthmus
50-80 miles.
The lowest suitable
Pass in the divide is at
about elevation 1,000
feet. The Continential
Divide lies about 10
miles south of the
Atlantic coast. The
centrally located
Chucunaque Valley
runs in a southeasterly
direction to join the
Tuira Valley. The
Pacific Hills at average
elevation of 1,000
feet and the Gulf of
San Miguel are the
principal features of
the west coast. There
is heavy tropical
jungle throughout.
Pyroclastic and
volcanic rocks of
basaltic composi-
tion, sedimentary
rocks and weak shales.
Pacific 14.3 ft/
23.0 ft; Atlantic
1.0 ft/2.7 ft.
The Pacific has deep
water within 1/2 mile
and the Gulf of San
Miguel provides a large
natural anchorage site.
The Atlantic side 10-
fathom contour is 2
miles offshore. Off-
shore islands provide
limited protection.
Atrato-Truando
Region
90-110 miles.
Passes exist through the
divide at elevations of about
1,000 feet (about 450 feet on
Route 23). The Atrato Valley
swamp is the most significant
feature with elevations from
sea level to 10 feet. The Con-
tinental Divide forms the
western boundary of the region
as it cuts across the isthmus.
Its 20-mile width separates the
Atrato Valley from the Pacific
Ocean. Thick tropical jungle
or lush marshland cover the
region.
Varies from unconsolidated
sediments to sedimentary
rocks and competent volcanic
rocks.
Pacific 8.4 ft/14.0 ft;
Atlantic 1.1 ft/2.9 ft.
The Pacific has deep water
within 1% miles and some
natural protection. The
Atlantic side 10-fathom
contour is 2 miles offshore. The
Gulf of Uraba, Candelaria Bay
and Colombia Bay provide fair
to good protection.
TABLE 4-3
SUMMARY OF REGIONAL CHARACTERISTICS (Cont'd)
Nicaragua-Costa
Rica Border Region
Panamanian
Isthmus
Atrato-Truando
Region
Darien
Isthmus
Harbors:
Communi-
cations:
Labor
supply:
Rainfall
average:
Local
develop-
ment:
Nearest Pacific coast
ports are Corinto and
Puntarenas. On the Atlantic
shallow draft harbors exist
at Bluefields and Puerto
Limon. All are more than
80 miles from prospective
routes.
San Juan River and Lake
Nicaragua allow water
access to the interior. No
transisthmian highway or
railroad exists. The Pan
American Highway crosses the all-weather highway exist.
area within 10 miles of the
Pacific coast. There is no
road along the Atlantic
coast or all-weather airfield.
Labor may be available
from the Nicaraguan m
metropolitan region across
Lake Nicaragua; also from
Costa Rica and Nicaragua
along Pan American
Highway. Local inhabitants
are unskilled.
Atlantic side 250’;
Pacific side 60’’.
Subsistence farming,
lumbering, fishing and
ranching.
Best of areas considered.
The Canal Zone has ex-
cellent port facilities av-
ailable at both ends of
the canal for ships with
drafts up to 40 feet.
The existing canal and
Gatun Lake offer easy
water access to the
region. A transisthmian
railroad and a two-lane
All-weather roads’
generally parallel both
coasts. Jet airfields exist.
Sources exist in centers
of population of the
area. The number of
inhabitants skilled in
heavy construction is
limited.
Atlantic side 130â€;
Pacific side 70â€.
Farming and ranching,
light industry and
commerce.
V-51
No harbors exist on
the Atlantic coast. On
the Pacific coast La
Palma provides min-
imum port facili-
ties for shallow
draft vessels with
room for expansion.
Colombian port of Turbo
on the Atlantic coast has
a depth of 12 feet with
10-foot depths available
i along harbor piers. No
harbors exist on the
Pacific coast, although
Humboldt Bay affords
some natural protection
The Chucunaque and_ The Atrato River provides
the Tuira Rivers allow excellent access for
access to the interior shallow draft vessels.
in small boats. No No railroads or all-weather
roads, railroads, or weather airfields exist.
all-weather airfields Pan American Highway
exist. Pan American — survey has been in
Highway survey has progress for several years.
been in progress for
several years.
Labor is not readily
available. The area is
remote from major
population areas.
Local inhabitants are
unskilled.
Labor is not readily
available. The area is
undeveloped. Local
inhabitants are unskilled.
Atlantic side 100’;
Pacific side 80’.
Atlantic side 80â€;
Pacific side 200â€.
Subsistence farming,
lumbering, ranching,
and fishing.
Selective lumbering and
subsistence farming.
A technician examines a box of specimens for identifica- Technicians identify insects for possible disease carrying
tion. capabilities.
A technician examines an animal for possible disease. Animal collectors with some of the specimens they
collected for examination.
The study required the identification of all possible sources and avenues of transmission of human disease in the areas
under consideration. To accomplish this thousands of specimens were collected and examined to determine if they could
act as reservoirs or vectors of human diseases.
V-52
CHAPTER 5
CONVENTIONAL EXCAVATION TECHNOLOGY
Nearly three-quarters of the cost of constructing a sea-level canal by conventional
means is associated with excavation. Therefore, wherever conventional excavating tech-
niques might be employed, particular attention has been given to alining routes so as to
minimize the volume of excavated material.
The present lock canal in Panama stands as a monument to the ingenuity and
organizational skill of American earthmovers. They succeeded on a grand scale where others
had failed. The magnitude of their achievement can be realized by comparing it with other
large excavation works, as shown below:
Cubic yards
Project/Dates?? »?3 excavated Significant dimensions
Suez Canal; 1859-1870 97,000,000 100 miles long; 150 ft wide by 26 ft
deep; surface elevations up to 100 feet.
French Canal, Panama; 78,000,000 48 miles long; 75 ft wide by 30 ft
1881-1898 deep; surface elevations up to 112
feet; excavation 70% completed when
abandoned.
Panama Canal; 1904-1914 280,000,000 48 miles long; 300 ft wide by 42 ft
deep; surface elevations up to 155 feet.
Panama Canal; 1915-1970 190,000,000 About 150 million cubic yards of
maintenance dredging and about 40
million cubic yards removed in
widening Gaillard Cut to 500 feet.
Mahoning Iron Mine, 700,000,000 3.3 miles by 0.7 miles; maximum
Hibbing, Minn.; depth 535 feet.
1895-present
Kennecott Copper Mine, 1,000,000,000 Two mile diameter; maximum depth
Bingham, Utah; 1700 feet.
1904-present
Morenci Copper Mine, 500,000,000 1.5 mile diameter; maximum depth
Morenci, Ariz.; 700 feet.
1937-present
V-53
The construction of an isthmian sea-level canal would require an effort surpassing all
previous projects in both extent and rate of excavation. At the very least, it would involve
the removal of nearly 1.5 billion cubic yards of material. Larger channels would require the
excavation of even greater quantities, as shown in Figure 5-1.
90
a ~ ©
oO o o
CHANNEL DEPTH, FEET
o
So
40
400 500 600 700 800 900 1000
CHANNEL BOTTOM WIDTH, FEET
Approximate excavation quantities on the Route 10 alinement
for various channel dimensions.
FIGURE 5-1.
Excavation systems: Many of the techniques and much of the equipment available for
this work today were developed during construction of the Panama Canal. In the intervening
years, capabilities have been increased and adapted to specific needs of the coal, iron, and
copper mining industries, as well as those of large public works projects. In the same period,
substantial improvements have been made in hydraulic dredges, while whole new families of
tracked and wheeled vehicles have entered the field of earth moving.
Good construction practice requires a balanced system for excavating, hauling, and
disposing of spoil. Hauling would be the critical factor in building a canal since, in general,
the capacities of available haul equipment are less than those of large excavating machinery.
Consequently, a balanced excavation system might contain excavation equipment smaller
than the largest available. Thus, although 180-cubic yard shovels exist today, only those
with 15 to 25 cubic yards capacity would be used for land-based canal excavation because
V-54
they are best suited to the largest trucks and rail gondolas now in use. In a water-based
operation, however, barge-mounted stripping shovels of about 140 cubic yards capacity
could be used efficiently to fill the large (3,000 cubic yard) scows that would carry away
the spoil.
t By far the greatest volumes of material excavated for a sea-level canal would be
removed from the Continental Divide reaches. Three general systems might be employed in
\ this work:
— Shovel excavation with truck haul;
— Open-pit mining with rail haul; and,
— Dipper dredge excavation with scow haul.
The first of these systems would use 15- to 25-cubic yard shovels and 100-ton dump
trucks for reducing isolated high points to elevations where either of the other systems
normally would be employed. The dump trucks, with their high mobility and ability to
traverse steep grades, could handle relatively small work packages effectively, making it
possible to operate several sites concurrently without significant increases in cost. They
would have an economic haul range of about 3 miles; however, when loaded they would
subject roads and bridges to severe stresses. Haul roads with 2-foot thick wearing surfaces of
hard rock would have to be built and maintained continuously to withstand the adverse
i climatic conditions of the region.
The second system, open-pit mining with rail haul, would employ 15- to 25-cubic yard
shovels to fill 110-ton gondolas in 20-car trains. Rail haul would be more economical than
truck haul for moving large volumes of excavated material over relatively long distances.
i Recent innovations in rail equipment, such as remote-control trains with small crews and
fast-acting automatic rotary car unloaders, make rail haul even more attractive under such
conditions. Figure 5-2 shows schematically how the open-pit mining/rail haul concept
| might be applied to the construction of a canal. This system would be economical where
haul distances are greater than 2 miles and adverse grades for loaded gondolas do not exceed
3 percent. Large volumes would have to be moved to offset the high cost of railbed
preparation and laying track. Criteria for track layout would constrain the location and
configuration of spoil areas.
The third excavation system would use large, barge-mounted shovels loading into
bottom-dump scows, each of which would hold as much material as an entire train of
railroad gondolas. This system, being completely waterborne, could operate from existing
lake or ocean levels, provided there is adequate depth for flotation in the excavation, haul,
and disposal areas. It could be extended on a limited basis to dry land excavation. To the
extent of its capabilities, it would provide the least expensive means of excavation. Its
economy might be offset by adverse effects of dumping large amounts of material into
Marine environments. In unsheltered areas, high seas might force an occasional halt to
operations.
All three systems would incorporate draglines as well as shovels, to be used in
excavating material well below the equipment’s level. In areas requiring wet excavation,
draglines could be mounted on barges.
Mud, silt, sand, gravel, and soft rock would be removed from sheltered approach
channels and low-lying reaches by hydraulic pipeline dredges. Their use would require that
suitable disposal areas be available within pumping distance of the canal. A 2-mile limit
V-55
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FIGURE 5-2
V-56
would be preferable, although booster pumps are capable of transporting spoil as far as 3 to 5
railes. Hydraulic dredges could be built to excavate material down to the maximum depths
required to meet channel criteria.
Figure 5-3 shows how these excavation systems might be employed in crossing the
Continental Divide on Route 14 Separate. Rail haul is maximized in this case. Estimates for
this route are based upon the systems shown in the figure.
Figure 5-4 shows some items of currently available excavating and hauling equipment
which might be employed to construct a sea-level canal, and Table 5-1 indicates how
excavating and hauling equipment have been balanced for the estimates included in this
study.
TABLE 5-1
CAPABILITIES OF EQUIPMENT SYSTEMS UNDER SEA-LEVEL CANAL
CONDITIONS BASED ON THE OUTPUT OF A SINGLE EXCAVATOR
Major Excavating Equipment Hauling Equipment Considered
Number of
Units Per Excavator®
Single Unit Production Level Haul Distances
Capacity Cu. Yd./Hr. 2 miles 5 miles
Shovel, 15-cu. yd. 560-780° 100-ton dump trucks?
110-ton rail cars
Shovel, 25-cu. yd. 610-1,210° 100-ton dump trucks?
110-ton rail cars
Dipper dredge
35-cu. yd. 630-1,230° 3,000-cu. yd. scow
Dipper dredge
140-cu. yd. 2,400-5,000° 3,000-cu. yd. scow
Dragline (barge-mounted)
35-cu. yd. 420-1,000° 3,000-cu. yd. scow
Hydraulic dredge, 27†1,000-2,000% Booster pumps
Hydraulic dredge, 48†2,400-5,000° Booster pumps
Rates vary from hard rock to overburden.
DE x perience with 200-ton dump trucks was considered insufficient for use in developing estimates for this study.
“The number of units would vary with the site conditions and the system layout. The combination of several excavators
and haul units would appreciably affect loss time of the system and alter the number of units required per excavator.
asoft materials.
Drilling and blasting: The varied geology of the American Isthmus would make it
necessary to use many different drilling and blasting techniques for breaking up material
V-57
ELEVATION — FEET
500
400
300
200
100 iN eee PACIFIC
26 28 30 32 34 36 38 48
DISTANCE — MILES
SHOVEL EXCAVATION — TRUCK HAUL
SHOVEL EXCAVATION — RAIL HAUL
\\ DIPPER DREDGE EXCAVATION—SCOW HAUL
ees
HOPPER DREDGE EXCAVATION
MY
LL.
BARGE-MOUNTED DRAGLINE EXCAVATION—SCOW HAUL
PROFILE—DIVIDE REACH—ROUTE 14 SEPARATE
FIGURE 5-3
V-58
————
A 180-cubic-yard stripping shovel.
A 15-cubic-yard dragline.
CONVENTIONAL EXCAVATION EQUIPMENT
FIGURE 5-4
V-59
A 15-cubic-yard dipper dredge.
CONVENTIONAL EXCAVATION EQUIPMENT
FIGURE 5-4
V-60
A 15-cubic-yard front-end loader.
oP:
A 100-ton bottom-dump semi-trailer.
CONVENTIONAL EXCAVATION EQUIPMENT
FIGURE 5-4
V-61
250
(Source: Engineering
x< as News Record)
Ww
a
z=
f=
o
© 150 EXCAVATION COST
(Source: Bureau of
Reclamation)
100
1949 54 1959 64 1969
DATE
Trends in general construction costs and excavation costs.
FIGURE 5-5.
prior to loading. The drills considered most suitable for this project are self-propelled rotary
drills, track-mounted for dry excavation and barge-mounted for wet excavation. Explosives
that would be appropriate for the conventional canal project fall into three general
categories: dynamite, ammonium nitrate-fuel oil, and slurries. Of these, ammonium
nitrate-fuel oil was used for estimates in most cases because of its low cost and relative
insensitivity.
Disposal methods: A portion of the excavated material would be used for embank-
ments, dikes, dams, and flood control levees. Selected material would also be utilized for
railroad ballast, haul road surfacing, and bank protection. The majority of the spoil,
however would not be used for construction, but would be placed in valleys along the
alinement. Ocean areas would be used where practicable. On Routes 10, 14, and 15, parts of
Gatun Lake would be used for disposal. Despite the general adequacy of spoil areas,
environmental considerations dictate that they be carefully selected. This is discussed more
fully in Chapter 10.
Excavation cost trends: Historically, unit costs of excavation have not risen as fast as
costs in the construction industry as a whole. The reasons for this are twofold:
— The principal cause of increases in construction costs is the constantly rising cost of
labor. (Large scale excavation is less labor-intensive than the remainder of the
industry; hence, it is less sensitive to changes in labor costs.)
V-62
— There has been steady improvement in the efficiency of excavating machinery and
systems.
In recent years, however, excavation costs have begun to rise at a rate approaching that of
the entire construction industry. (See Figure 5-5.) As excavation technology improves, new
concepts of earth moving might offer means of reducing costs. Methods which appear to
hold promise, if major product improvements can be achieved, include conveyor belts,
continuous excavators, monitors and sluicing, nuclear-powered dredges and excavation by
either chemical or nuclear explosives. There is no doubt that some or all of these
improvements will be made. However, since their application lies in the future and their full
extent cannot be foreseen, conventional excavation estimates in this study are based on the
use of existing equipment and proven methods for which reliable costs factors are available.
V-63
Choco Indians gather to inspect a helicopter that landed Native labor was utilized in the construction of work
near their village. Helicopter was delivering supplies to camps along the routes. This bohio is similar to most huts
one of the hydrology stations. constructed for these camps.
U.S. Army medical teams also furnished medical attention Natives aided in the collection of animal specimens such
to the local natives whenever they visited the work camps. as this. Specimens were studied as possible reservoirs or
vectors of human disease.
The local inhabitants of the areas investigated were very curious about the personnel of the survey parties and their
equipment.
V-64
CHAPTER 6
NUCLEAR EXCAVATION TECHNOLOGY
The economies that may be realized from applying nuclear excavation techniques to the
construction of a sea-level canal stem from three sources:
— The force of the explosion not only fractures material but moves it out of the cut.
— Economies of scale are inherent in large nuclear explosions—the higher the yield,
the lower the unit cost of energy produced.
— Nuclear explosives are small and compact compared to chemical explosives of
comparable yields; they can be emplaced quickly and cheaply.
Such potential advantages make nuclear explosives an attractive means for constructing deep
cuts that would be prohibitively expensive if excavated conventionally. Associated with
these economies, however, are certain effects which must be assessed fully before any
decision to adopt nuclear excavation techniques is made. For this assessment, an
understanding of the nuclear cratering process and its effects is essential.
The nuclear cratering process: (Figure 6-1.) A nuclear explosion releases an extremely
large amount of energy from a concentrated source in less than one-millionth of a second.
This sudden release generates a shock wave which radiates from the point of explosion,
transmitting energy to the surrounding material (Figure 6-1(a)). This energy is sufficient to
vaporize everything in the immediate vicinity of the explosion. As the shock wave expands
beyond the vaporized region, its intensity diminishes. It creates successive zones of melted,
crushed, and fractured rock, beyond which only elastic deformations occur. When the shock
wave reaches the ground surface (Figure 6-1(b)), a tensile wave is reflected, which causes
spalling at the surface and fractures the underlying rock as it travels downward (Figure
6-1(c)).
Generation of the shock wave is followed immediately by the expansion of a cavity
containing vaporized rock and other gaseous products of the explosion. The cavity grows
spherically until it meets the downward-moving tensile wave which relieves the stresses on
its upper surfaces. This causes the cavity to expand preferentially toward the ground
surface, further accelerating the material already set in motion by the shock wave.
As the cavity continues to expand upwards, the ground surface above begins to rise. A
mound forms (Figure 6-1(d)) and grows until it breaks up (Figure 6-1(e)) and the underlying
material, accelerated by expanding gases, is thrown upward and outward in ballistic
trajectory. Some of this material (fallback) drops into the cavity, while the remainder
(ejecta) falls outside (Figures 6-1(f) and 6-1(g)).
Nuclear crater properties: (Figure 6-2.) The true crater produced by the explosion is
partially filled by fallback. This material varies in size and forms concave slopes, producing
V-65
x N
(a) The explosive detonates,
generating a shock wave
which vaporizes and melts
the immediately surrounding
material.
(d) A mound grows and then
begins to dissociate, allowing
vapor to filter through the
broken material.
(b) The shock wave reaches
and is reflected from the
surface, causing it to spall, as
the cavity grows spherically.
(e) The mound reaches its
maximum development as
major venting occurs; crater
sides begin to slump.
EJECTA
FALLBACK
(c) The reflected tensile wave
reaches the cavity, causing
accelerated growth toward
the surface.
(f) The mound completely
dissociates into fallback and
ejecta, which are deposited to
form the apparent crater and
its lip.
(g) Final configuration of a typical row
charge excavation.
NUCLEAR CRATER FORMATION
FIGURE 6-1
V-66
ORIGINAL
EJECTA GROUND APPARENT CRATER
SURFACE BOUNDARY
Ze ee $~ RUPTURE ZONE
<
a
= me Z i
TRUE CRATER BOUNDAR Ss BSS Ee
s oF 4 AY POINT OF DETONATION
=
v N
Apparent Crater - That portion of the visible crater which is below the original ground surface.
True Crater - The entire void initially created by the explosion including both the apparent crater
and the broken and disarranged fallback material.
Fallback - Material thrown into the air by the explosion, which does not have sufficient horizontal
velocity to escape the crater area and thus falls back into the void initially created by the explosion
(true crater).
Ejecta - Material thrown into the air by the explosion with sufficient horizontal velocity to escape
the crater area. Ejecta landing just outside the void created by the explosion forms part of the crater
lip.
Rupture Zone - The region bounding the true crater in which material has been sufficiently stressed
to cause fracturing, crushing, and some slight local displacement.
CROSS SECTION OF A ROW CRATER
FIGURE 6-2
V-67
an excavation called the apparent crater which is approximately hyperbolic in cross
section.* The average slope angle of the fallback, measured from the horizontal, ranges
between 25 and 40 degrees depending upon the type of material. Because of the dynamic
manner in which it has been deposited, this material stands at a slope angle somewhat flatter
than its natural angle of repose. The crater lip is formed by uplifting of the ground surface
adjacent to the crater and by deposition of ejecta.
In excavating a canal, a number of explosives buried in a row would be detonated to
produce a row crater. In a row crater the height of the side lips above the original ground
surface is about two-thirds the depth of the apparent crater. The lips slope gradually to the
undisturbed ground as they extend outward.
The dimensions of a row crater depend on the type of material being excavated and its
moisture content, the yield and burial depth of the explosives, and their spacing within the
row. Navigation channels are usually considered to be rectangular in cross section; the cross
section of a nuclear crater is hyperbolic. Therefore, to produce a channel having at least the
required rectangular dimensions, a nuclear explosion must create an oversized excavation.
Figure 6-3a shows a conventionally dug channel through a surface elevation of about 300
feet. Figure 6-3b shows a nuclear-excavated channel through an elevation of approximately
1,000 feet. A major advantage of the large nuclear channel would lie in its ability to
accommodate sedimentation or surficial slope adjustments without restricting navigation or
requiring remedial excavation. Equally important, its great depth would make it relatively
invulnerable to traffic interruptions caused by disabled ships.
The simultaneous detonation of a row of explosives produces a linear crater with a
larger cross section than a single crater produced by any one of the explosives. This
enlargement occurs because the explosives effects of adjacent charges interact to impart
greater energy to the surrounding material. Thus, a larger true crater is formed and the
broken material is thrown farther. The resulting increase in crater dimensions is called
enhancement. Enhancement factors used in this study range from 1 to 1.25.
As the required width and depth of the cut become greater, larger yields would be
employed but the number of explosives would diminish. Since the cost of nuclear
excavation is far more sensitive to number than to size of explosives, cuts with large cross
sections would cost little more than small ones. Safety considerations, however, normally
would dictate that the explosives used should be no larger than necessary to excavate the
required cut.
Canal excavation concept: From an operational viewpoint, the simplest method of
accomplishing nuclear excavation would be to detonate all explosives simultaneously, thus
opening the entire nuclear channel at one time. However, the enormous amount of energy
released by such a procedure would create unacceptable levels of airblast and ground motion
for hundreds of miles from the canal alinement. To avoid this, the design concept calls for
dividing the nuclear portion of the alinement into short sections excavated by separate
detonations of several explosives in a row. The length of each row crater would be chosen to
insure that ground motion and airblast would be within acceptable, conservatively selected
*Except where noted, the discussion refers to a crater formed by an explosive detonated at its optimum depth of burst, the
depth that produces the apparent crater having the maximum volume attainable for the yield of explosive used.
V-68
FIGURE 6-3a
Ship passing through a single-lane conventionally dug canal, showing the navigation prism. (Maximum ground elevation
shown is 300 feet. The navigation prism is 550 by 75 feet)
FIGURE 6-3b
Ship passing through a two-lane canal excavated by nuclear means, showing the navigation prism. (Maximum ground
elevation shown is 1000 feet. The navigation prism is 1000 by 75 feet)
V-69
limits. The complete sequence of detonations would excavate a series of interconnected row
craters to form the desired channel. The schedule would call for sequential excavation of
alternate, rather than adjoining, sections to avoid the collapse by ground shock of
immediately adjacent explosive.emplacement holes and damage to explosives pre-emplaced
for succeeding detonations. Thus, the channel would be excavated by two passes of
detonations, each pass comprising a series of alternate sections of the channel. First pass
operations would include drilling the pre-selected emplacement holes, loading the explosives
and firing. This would take several months and would result in excavation of alternate
sections of the channel amounting to about half of the total channel length. After a short
delay for decay of radioactivity in the immediate area, identical operations for the second
pass would be performed. Second pass detonations would remove the alternate sections left
unexcavated by the first pass, providing a continuous channel. The row crater connections
would not be completely smooth and some fallback material might even impinge on the
required navigation channel. This material could be removed by barge-mounted draglines
and bottom dump scows for disposal in nearby sections where the excavation provided
considerable channel overdepth. Cost totals in this study include estimates for this remedial
work.
The two-pass excavation concept described above provides a method for safe and
efficient execution of channel excavation while keeping undesirable side effects to
acceptable levels. Figures 6-4a and 6-4b show a channel at Fort Peck, Montana, formed by
sequential detonations of three interconnected rows of high explosives in an experiment
demonstrating the feasibility of creating a navigation channel by explosive means
Associated effects of nuclear explosions: Nuclear cratering explosions produce three
unwanted effects: ground motion, airblast and radioactivity. Ground motion and airblast are
common to all explosions; however, the great quantities of released energy in large nuclear
explosions make their effects potentially hazardous over long distances. Radioactivity is
unique to nuclear explosions and requires strict controls to avoid hazards and to alleviate
psychological and sociological concerns.
The close-in hazards presented by these effects can be avoided by evacuating the
inhabitants of affected areas. In the present study, the distances to which possibly harmful
levels of ground motion, airblast, and radioactivity would extend were estimated for each
detonation. These estimates were used to delineate the boundaries of areas that should be
evacuated. The lateral (crosswind) limits of exclusion areas would extend 30 to 50 miles
from the nearest detonation. Downwind they would extend to the coast, and that part of the
ocean included in their extension would have to be kept clear of ships on detonation days.
At any given point the magnitude of ground motion and its effects depend on the yield
of the explosive, its depth of burst, the materials through which the seismic pulse travels and
the distance of the point from the explosion. In those cases where subsurface geologic
conditions are known, the magnitude of ground motion can be predicted with a fair degree
of confidence. Predictions of resultant effects, however, are more difficult because the
response of structures cannot readily be determined. This is particularly true in areas where
there are no building codes, where codes have not been strictly enforced, or where
structures have undergone differential settlement or have deteriorated. Therefore, buildings
that might be damaged would be evacuated to prevent personal injury. In a few cities
V-70
FIGURE 6-4a
Channel at Fort Peck Reservior, Montana, created in an experiment demonstrating the feasibility of creating a navigation
channel by explosive means. This channel was excavated with 18 chemical explosive charges ranging from 5 to 40 tons. It is
1,300 feet long, 130 feet wide, and has an average depth of 17 feet.
FIGURE 6-4b
Tugboat in Fort Peck channel. (Tugboat length 47 feet: beam 11 feet: draft 5 feet 7 inches.)
V-71
outside the exclusion area, a small number of high-rise buildings might have to be evacuated
on days of very high-yield detonations.
Airblast, another likely source of concern caused by nuclear explosions, consists of air
pressure waves which, under certain high-altitude meteorological conditions, could be
focused on locations as far as 300 miles from the point of detonation. In such cases the
principal adverse effects would be window breakage and possible attendant personal injury.
Long-range airblast damage can be prevented or minimized by scheduling detonations to
coincide with favorable meteorological conditions. Injuries from close-in airblast can be
avoided by evacuating the immediate area of detonation.
As is the case with ground shock and airblast, the production and dispersal of
radioactivity from a nuclear explosion and its effects on the environment and on man are
reasonably well understood. Nuclear cratering detonations release only small amounts of
radioactivity which, like all radioactive material, continually decay. These materials are both
concentrated and dispersed by natural processes, such as rainstorms, runoff and flow of
water, and biological assimilation in food chains, increasing the difficulties of tracing
released radioactive materials. Therefore, prior to any nuclear explosion, the surrounding
area would have to be studied carefully to determine pathways through which radioactivity
might reach man. Any unusual features of the environment affecting transport through
these pathways would be identified and closely monitored for some time following
detonations. Certain areas would have to be evacuated during construction to minimize the
risk of exposing the population to levels of external radiation beyond appropriate guides. In
addition, shipping would have to be excluded from limited seaward areas for periods of 24
to 48 hours following each detonation in order to avoid radioactive fallout.
The evacuated area beyond the crater lips probably could be reoccupied by permanent
residents within a few months after the final nuclear detonation. Resettlement of the
exclusion area would be contingent on the results of detailed and continuous radiological
surveys made to assure that no one would be exposed to levels of internal or external
radiation beyond allowable limits. Further, the evacuation area would continue to be
monitored to keep track of the remaining radioactivity and its effect on the local ecology.
Radioactivity would be concentrated most heavily in the craters, crater lips and ejecta, a
factor which must be taken into consideration throughout project planning and provided for
in nuclear safety operations during construction. By the time the canal is opened to traffic,
however, radioactivity levels would be sufficiently low so that no special precautions would
be required for ships passing through the canal.
Residual radioactivity would have some deleterious effects on plant and animal life. The
amount of radioactivity released prob: bly would not do irreparable harm to any species as a
whole; however, a few individual plants and animals would be expected to suffer some
radiation damage.
Development of cratering technology: The assessment of nuclear excavation feasibility
in this report is based on current cratering technology which has been developed jointly by
the Atomic Energy Commission and the Corps of Engineers. The objectives of their research
and development program have been:
— To acquire knowledge of cratering mechanisms and the ability to predict crater
dimensions;
V-72
— To minimize the radioactivity released by thermonuclear explosives;
— To predict and control the effects of radioactivity, airblast, and ground motion on
man and the environment; and,
— To understand the engineering characteristics of nuclear craters.
In support of this joint effort, as a part of its Plowshare* program, the Atomic Energy
Commission planned a series of experiments aimed at extending the knowledge of cratering
phenomena which had been derived from a small number of nuclear weapons effects tests,
nuclear cratering experiments, and from large-scale high explosive experiments. When the
Atlantic-Pacific Interoceanic Canal Study Commission was established, the Atomic Energy
Commission reoriented its proposed experimental program to emphasize those tests which
would assist investigations of sea-level canal routes, while meeting the more general
objectives of Plowshare. The nuclear cratering experiments which originally were intended
to provide data for this joint program are listed in Table 6-1. Those experiments which have
been performed, including those accomplished before the establishment of the Canal Study
Commission, are summarized in Table 6-2. Several craters achieved by these experiments are
shown in Figure 6-5.
TABLE 6-1
EXPERIMENTS CONSIDERED NECESSARY IN 1965 TO
DETERMINE FEASIBILITY OF NUCLEAR EXCAVATION
Material Type of Experiment
About 10 kt Hard rock
About 100 kt
About 1 kt
per charge
1 to 10 kt per
charge
About 10 to
100 kt per
charge
Hard rock
Hard rock
Hard rock
Hard rock
Point charge
(single crater)
Point charge
(single crater)
Multiple point
charges (row
crater)
Multiple point
charges (row
crater)
Multiple point
charges (row
crater)
To provide datum point
for scaling crater parameters
and explosion effects.
To provide datum point
for scaling crater parameters
and explosion effects.
To verify concepts of row
excavation in flat terrain
as determined by chemical
explosives.
To verify row excavation
design concepts through
terrain with varying
elevations.
To execute a practical
demonstration project
which would incorporate
the knowledge gained from
the experimental program.
*The Atomic Energy Commission’s program to develop the peaceful uses of nuclear explosives.
V-73
TABLE 6-2
COMPLETED NUCLEAR CRATERING EXPERIMENTS
Material/
Depth of
Burst
Danny Boy
Mar 1962
0.42 kt.
Sedan
Jul 1962
100 ft
Desert
alluvium
635 ft.
Sulky
Dec 1964
0.085 kt
Palanquin
Apr 1965
4.3kt.
Rhyolite
280 ft.
Determine cratering capabili-
ties of nuclear explosives in
hard, dry noncarbonate
medium; determine amount,
distribution and decay of
radioactivity by a nuclear
explosive detonated near
optimum depth of burst
in a hard rock medium.
Extend knowledge of cratering
effect to the 100 kt range of
yields; provide data on the
general nature of the safety
problems to be encountered
by nuclear cratering detona-
tions.
Investigate the nature of the
cratering curve at greater
than optimum depth of
burst; determine distribution
of radioactivity; determine
concentrations of certain
radionuclides airborne at
various distances;
gain crater mechanics infor-
mation at deeper than
optimum depth of burst.
Provide information on abili-
ty to reduce radioactivity
released to atmosphere;
determine the dispersion of
radioactivity released;
produce a mound for
further study of quarry
applications.
V-74
Apparent crater radius:
107 ft.
Apparent crater depth:
62 ft.
Apparent crater radius:
608 ft.
Apparent crater depth:
323 ft. Nuclear ex-
plosions in the region
of optimum depth of
burst result in craters
with radii about 10-20%
smaller than equivalent-
yield chemical explosives
and with depths about the
same.
No crater; produced a
mound of rubble.
Apparent crater radius:
119 ft. Apparent crater
depth: 79 ft. Incon-
clusive results due to
stemming failure.
Significance
First nuclear crater in
dry hard rock. Valuable
information obtained
on cratering mechanics.
First Plowshare nuclear
cratering detonation.
Demonstrated that
nuclear explosive
effects cannot be
scaled directly from
chemical explosions.
First nuclear cratering
detonation under
terms of the Limited
Test Ban Treaty.
Predicted rubble
mound but a crater
developed as a con-
sequence of stemming
failure. Valuable infor-
mation relating to
stemming obtained.
TABLE 6-2
COMPLETED NUCLEAR CRATERING EXPERIMENTS (Cont'd)
Material/
Depth of
Burst
Cabriolet Dry
Jan 1968 layered
2.3 kt rhyolite
170 ft.
Buggy Multi-
Mar 1968 layered
5@ 1.1 kt basalt
125 ft.
Schooner Layered
Dec 1968 tuff
31 kt 355 ft.
Provide data on basic crater-
ing effect from a nuclear
explosion occurring at what
appears to be the best depth
in hard rock; verify recently
developed computer codes
and calculation techniques;
study distribution of radio-
activity.
Obtain basic data on row
cratering phenomenology
through level terrain in
a dry rock and on radio-
activity release
Examination of physical and
chemical parameters which
affect cratering at low
intermediate yields.
V-75
Results
Apparent crater radius:
179 ft. Apparent
crater depth:
116 ft. Relatively small
amount of radio-
activity released.
Apparent crater width:
254 ft. Apparent crater
depth: 60 ft. Apparent
crater length: 857 ft.
Apparent crater radius:
426 ft. Apparent crater
depth: 208 ft.
Significance
First in series of excava-
tion experiments to
support Atlantic-
Pacific Interoceanic
Canal Study Com-
mission. Scaled
dimensions larger
than Danny Boy ob-
tained at a shallower
depth of burst.
Advanced the technical
knowledge required
for nuclear excava-
tion of a sea-level
canal. Confirmed
basic concepts of
channel excavation
derived from high-
explosive experi-
ments at very low
yields; supported
value of theoretical
cratering calcula-
tions in predicting
effects of nuclear
detonation in an un-
tested environment.
Extended hard rock
nuclear cratering
data collected from
Cabriolet to that of a
nuclear experiment of
a higher yield.
Ce eRe
Depth = 116 ft.
REPRESENTATIVE NUCLEAR CRATERS OF THE PLOWSHARE EXCAVATION PROGRAM
FIGURE 6-5
V-76
IBtclollUls
Depth
SCHOONER
Sie hem
REPRESENTATIVE NUCLEAR CRATERS OF THE PLOWSHARE EXCAVATION PROGRAM
FIGURE 6-5
V-77
The first objective of this program has been twofold: to understand the cratering
mechanism and to predict its results. To date, both of these goals have been met only in
part. The Atomic Energy Commission has developed a method for computing cratering
phenomena in terms of basic laws of physics. This technique was used to predict the
dimensions of the Schooner crater and the cratering characteristics of the complex basalt
flows in which the Buggy experiment was performed. Applying the knowledge thus
acquired, a better understanding of the Sedan experiment has been reached, including the
effects caused by the moisture content of the cratered material. Because of its complexity,
this analytical approach becomes more difficult to apply as yields increase. Calculations
have been completed at the l-megaton level, using the measured strength characteristics of
rocks found along proposed nuclear excavated canal routes, and curves showing expected
crater dimensions have been developed for the divide rock by calculating crater dimensions
at several depths of burst. Computer calculations tend to predict crater dimensions in canal
rock somewhat greater than those predicted by scaling up in yield from the nuclear craters
produced to date. Nuclear excavation designs for this study rely mainly on scaled crater
dimensions; this is considered the more conservative approach. Verification of the validity
of these calculations can be obtained only by large-scale experiments.
Existing computer programs for cratering are two-dimensional and cannot be applied
directly to row cratering experiments such as Buggy, which would require a three-
dimensional program. The current understanding of the interaction between charges in a
row needs to be refined by additional experiments. Chemical explosives are partially suitable
for this purpose. Buggy demonstrated the feasibility of nuclear row charge excavation at low
yields and established that relatively wide spacings can produce uniform channels free from
severe irregularities, even in complex geologic formations. Still to be investigated with
nuclear explosives are the concepts of row crater enhancement and techniques for
connecting one row crater to another smoothly.
Verification is needed of the predictions underlying the nuclear excavation designs
incorporated into this study. Such verification can be obtained only by large-scale tests in
appropriate media. Cratering experiments considered necessary to verify current cratering
theory are outlined in Table 6-3.
The second objective of the joint experimental program called for a reduction in the
radioactivity released by nuclear excavation detonations. Considerable progress has been
made toward achieving this objective through improved design of thermonuclear explosives
to decrease fission products, special emplacement techniques and extensive neutron
shielding.* Figure 6-6 indicates the degree of success achieved to date. Further substantial
improvement is expected, which should result in a significant reduction in the size of
exclusion areas shown in this study and in the number of people who would require
evacuation.
*Neutron absorbing material is placed around the explosive to reduce the number of neutrons which might interact with
the surrounding material to produce radioactive isotopes.
V-78
TABLE 6-3
ADDITIONAL EXPERIMENTS NOW CONSIDERED NECESSARY TO ESTABLISH
FEASIBILITY OF NUCLEAR EXCAVATION FOR A SEA-LEVEL CANAL
Type of Experiment Purpose
Point charge (single To verify the predicted cratering behavior of
crater) saturated rocks; to obtain data on crater dim-
ensions and explosion effects at yields com-
parable to those required for canal excavation.
5 to 7 charges Multiple point charges To verify concepts of the enhancement of row
@ 100 kt (row crater) crater dimensions.
5 to 7 charges Multiple point charges To verify techniques of connecting row
@ 100 kt (row crater) excavations smoothly.
5 to 7 charges Multiple point charges To demonstrate the techniques of nuclear ex-
@100ktto1mt (row crater) cavation in a practical project away from the
Nevada Test Site.
The third objective entailed predicting intensities and ranges of other effects—airblast
and ground motion—caused by nuclear explosions. Each experiment supporting this study
has provided an opportunity to examine mechanisms by which these effects are generated
and propagated and to estimate how people, animals, and structures would respond to them.
Results obtained have led to improvements in predicting intensities at which these effects
may become hazardous. Recent tests have shown that under certain meteorological
conditions, airblast effects would have a greater range than previously expected. Conversely,
the predicted extent of objectionable ground motion effects has been reduced moderately.
These phenomena require evaluation under prototype conditions before they can be
defined precisely. Until such time, predictions must continue to be based on highly
conservative assumptions which are reflected in the estimated costs for the planned nuclear
safety program included in this study.
The fourth objective was to increase knowledge of the engineering characteristics of
nuclear craters in terms of their long-range stability, not only as it relates to maintaining a
navigation channel, but as it affects such structures as tidal gates and drop inlets. The
stability of nuclear crater slopes has been demonstrated in desert alluvium and in a variety
of rocks by experiments of up to 100 kilotons in yield. Possible stability problems of larger
craters are discussed in the next section. Post-detonation investigation of the lips and
fallback of craters has provided valuable information on techniques for constructing
facilities in and around nuclear excavations.
V-79
100 MI.
Et INFINITE DOSE IN ROENTGENS (R)
50M a — §
O1R 50 MI
25 MI. ——— Or Nile
0.5R
\ 1R
@ 100 R 3R
1962 TECHNOLOGY (SEDAN) PRESENT TECHNOLOGY
Relative size of fallout patterns from Sedan, a 100-kiloton explosive detonated in 1962, and a
theoretical 100-kiloton explosive of 1970 design.
COMPARATIVE FALLOUT PATTERNS 1962 — PRESENT
FIGURE 6-6
V-80
The ability to plan use of craters for navigation purposes depends on correct predictions
of crater size and shape. Most craters have exhibited the general hyperbolic shape* on which
the conceptual canal designs in this study have been based. The Technical Associates have
suggested, however, that at substantially greater explosive yields than have been detonated
to date, a phenomenon called air liquefaction might affect the crater formation process.
This phenomenon has been observed occasionally in large naturally-occurring slides of
broken rock where the permeability of the mass was sufficiently low to entrap air which
supported the sliding material, causing it to flow as a liquid.y If this were to occur in a large
nuclear excavation, the crater shape might be altered to leave a flat, shallow excavation
whose depth might be insufficient for a navigable channel. A megaton-range experiment is
required to determine whether the typical hyperbolic crater cross section would be
preserved at high yields and whether modifications would need to be made in detonation
plans to account for this. Such an experiment also would produce slopes with heights very
close to those needed for a nuclear excavated canal and should, therefore, demonstrate the
degree of their stability.
Status of nuclear excavation technology: The potential economic advantage of nuclear
explosives for large-scale excavation projects is substantial. They should make possible the
excavation of cuts of unprecedented size. Although the technology is based on what appears
to be sound theory, this theory has been demonstrated by only a limited number of
experiments at yield levels much smaller than would be needed for canal construction. The
state-of-the-art allows predictions of results to be expected from excavation under
conditions and at yields different from experience; however, these predictions do not carry
the degree of confidence which must exist in an engineering feasibility study on which
nationally significant decisions are to be based. The attainment of such confidence awaits
the execution of at least those experiments outlined in Table 6-3. Under present constraints,
it appears that accomplishment of this experimental program may take as long as 10 years.
The Soviet Union also has shown considerable interest in the use of nuclear explosives
for peaceful construction purposes. Information on the full extent of the Russian
experimental program is not yet in the public domain. However, the Soviet Union has held
discussions on this subject with the United States and has released a series of technical
papers which confirm that a vigorous program of research and experiment is underway. In
general, the experience reported by the Soviets seems to confirm knowledge gained from the
United States Plowshare program.
Of particular interest to this study is a well-formulated Russian proposal to employ a
combination of nuclear and conventional excavation techniques in constructing the
proposed Pechora-Volga Canal.?* This project would divert the northward-flowing waters of
the Pechora River to flow down the Volga to offset the lowering of the Caspian Sea. The
Pechora-Volga Canal would be 70 miles long, 40 miles of which would be excavated by 250
nuclear explosives. Up to 20 explosives, with a maximum aggregate yield of 3 megatons,
would be detonated simultaneously. This and other similar Soviet projects indicate that the
Russians are moving ahead rapidly to develop and apply nuclear excavation technology.
*Schooner was an exception. See Figure 6-5.
{The high velocity of the landslides caused by the Peruvian earthquake in May 1970 strongly suggest that air liquefaction
was involved.
V-81
Excavation in the Panama Canal was first tried on very Model of 250,000 dwt ship undergoing tests to determine
steep slopes. The weak materials of the area would not its handling characteristics in confined waters. Since there
stand on these slopes, resulting in slides such as the one was only limited information available on this subject the
shown in the lower center of this picture. Commission was forced to research the question.
One of the slides that closed the canal in 1915 is shown High compression tests such as this provided information
here. Slides were caused by too steep an excavation in on the slope stability of materials found on the routes
weak clay shale materials. studied.
The Commission’s studies considered some factors about which little was known. The slope stability of clay shale materials
and the handling of large ships in restricted channels were two areas in which the Commission sponsored special studies to
obtain information needed for their report.
V-82
CHAPTER 7
SLOPE STABILITY
The cross section of a canal must be designed not only to meet navigational criteria but
to minimize the likelihood of slope failures large enough to impede traffic. For estimating
purposes slope criteria must be selected so as to be both conservative and economically
attainable. This is a matter of engineering judgment. Factors bearing on the exercise of that
judgment are discussed in this chapter.
Excavated slope experience: The general slope design criteria used in preparing
estimates of excavation quantities for this study have been extrapolated from data
contained in previous studies ??°?* and from experience gained in the construction and
operation of open-pit mines, quarries, road cuts, dam structures, and particularly the
Panama Canal. Excavations, as deep as 2,280 feet and having various slope angles, were
studied. They provided a guide to the slopes required along the proposed conventionally-
excavated canal routes, which would attain a maximum height of about 600 feet. There is
only limited applicable experience, however, because no previous project has ever faced the
combined problems of slope height, soft rock, and tropical weathering conditions existing at
the canal routes under consideration here.
Probably the best basis for stability predictions is found in the history of the Panama
Canal. Surficial slides occurred there from 1884 to 1889 during construction by the first
French company.° The second French company did little excavation in areas where weak
materials had been encountered; consequently, the old slides were relatively inactive during
the next 15 years. When the United States renewed canal excavation in 1905, surficial, or
“mudflow†slides recurred. In 1907, when the depth of excavation exceeded 100 feet,
massive slides began in the Gaillard Cut (Figure 7-1). Between 1908 and 1912 sliding
continued and grew through progressive slumping, causing slopes to be cut back much
flatter than the originally planned three vertical on two horizontal. More slides occurred
between 1913 and 1916 when excavation was being completed through the divide. Water
was admitted to the cut in October 1913, and in August 1914 the canal was opened to
traffic, but landslides continued until gross movements of the East Culebra and West
Culebra Slides eventually closed the canal from September 1915 to April 1916. Subsequent
movements of the East Culebra Slide occurred, leading to other brief closings in 1917 and
1931; still another closure was caused in 1920 by movement of the Cucaracha Slide which
first developed in 1913 south of the East Culebra Slide.** Since then, although the old slides
have continued to show activity and new slides have developed, the canal has not been
closed. The most recent significant movement occurred at Hodges Hill in 1968, immediately
V-83
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V-84 FIGURE 7-
north of the West Culebra Slide. This movement now appears to have been arrested by
improved surface and subsurface drainage.
Criteria for excavated slopes were developed for the Third Locks Project in 1939,?°
based on empirical data accumulated during construction of the Panama Canal. These
criteria were modified during work on the project and again during the Isthmian Canal
Studies of 1945-1947. The modified criteria were based partly on empirical data and partly
on newly-learned principles of slope stability analysis. These modifications called for flatter
slopes in the Cucaracha formation.
Between 1947 and the start of the present study in 1965, knowledge of slope stability
was increased by experience gained in widening the Gaillard Cut and from the design and
construction of earth embankments and dam excavations in the United States and Canada.
Of particular interest were those projects involving clay shales, for it is in this type of material
that the most significant slides on the Panama Canal have occurred. Thus, out of the
problems of the canal, there has emerged better understandings of the loss of strength in
excavated slopes resulting from unloading during excavation and of the progressive
weakening of the slopes with time.??
The objective of the present study, as it pertains to slope stability along the proposed
routes, has been to develop criteria for excavated slopes that would lead to excavation and
cost estimates suitable for determining the feasibility of constructing a sea-level canal. To
accomplish this, it was necessary to:
— Determine general geologic structures;
— Identify the types of materials, and their distribution;
— Determine the engineering properties of the materials, and their changes with time;
and,
— Analyze experience gained from construction and operation of the Panama Canal in
the light of current knowledge.
Investigations* made to attain these objectives have included:
— Surface geological reconnaissance;
— Drilling to obtain subsurface information and to recover disturbed and undisturbed
samples for testing;
— A limited number of geophysical tests and paleontological analyses to aid in
correlating strata;
— Laboratory testing to identify and determine the engineering properties of rock and
soil materials;
— A review of slope stability experience in constructing and operating the Panama
Canal; f and,
— Studies of steep slopes in other parts of the world.
*Investigations for Routes 5, 8 and 23 were limited to reviews of information developed in previous studies, supported by
a brief reconnaissance of each route.
{This has included limited field instrumentation in the Gaillard Cut and re-analysis of slopes that have failed. The areas
studied were the East Culebra Slide, the West Culebra Slide, and the adjacent Model Slope. Studies of clay shale slopes in
the United States and Canada also have been undertaken.
V-85
These objectives have been met to a degree that confirms the feasibility of excavating a
sea-level canal by conventional means.
On the basis of laboratory tests and visual identification, materials encountered along
the various routes have been placed in five general categories, corresponding with those used
in previous studies:
— High quality rock (strong unaltered volcanic rock: basalts, agglomerates and tuffs);
— Intermediate quality rock (strong sedimentary limestones and sandstones and some
slightly altered volcanic rocks);
— Low quality rock (silty and sandy claystones and altered tuffs);
— Soft rock (clay shales and soft altered volcanic rocks); and,
— Unconsolidated sediments (soft soils including Atlantic and Pacific mucks).
The distribution of the various materiais was determined by correlating boring data and
geologic mapping information. Drilling programs supplementing previous studies of Routes
10 and 14 aided in identifying materials along these alinements. Even with this additional
information, correlation proved difficult because of the extensive faulting, volcanic activity,
and alteration that have occurred in these areas. Analysis of slope stability along these
routes was complicated by the presence of soft altered volcanic rocks and clay shales.
In addition to the usual effects of adverse geologic structure, the Panama Canal slides
are attributable largely to the presence of clay shales. Consequently, special attention was
given to investigating the nature of clay shales.2†Comprehensive tests to identify and index
clay shale properties were performed. These tests permitted correlation of materials found
on the proposed routes with those existing on the Panama Canal and other projects. This, in
turn, allowed the extrapolation of previous construction experience to the routes under
consideration. Current testing methods show that very flat slopes would be required for
long-term stability in clay shale. However, it is not yet possible in all cases to distinguish the
geologic conditions under which these flat slopes would be required and those under which
steeper slopes might stand safely throughout the project’s life.
Recent field investigations on the present canal disclosed one significant feature that
was not recognized previously: negative pore water pressure still exists in the clay shale
masses of the East and West Culebra Slide areas. This condition suggests that the material
may not have become fully stabilized since its loading was reduced by excavation, and that
continuing movement may be expected until pore water pressures reach stable levels. For
this reason, and because of jointing and faulting defects, prevalent in the formations under
consideration, conservative criteria were adopted for slopes in clay shales. Additional study
of slopes in the Gaillard Cut is required to improve current assessments of their long-term
stability.
An empirical study of high clay shale slopes in the Missouri River Valley also was
conducted as a part of the investigations of the feasibility of nuclear cratering.2* The
investigative procedures employed, including surface mapping, drilling, sampling, and testing,
were coordinated with procedures used in investigating the canal routes. Although
conducted primarily to provide a basis for assessing the stability of high slopes created by
nuclear cratering in clay shale, this work contributed data which have proved useful in
evaluating conventionally excavated slopes. 22,23,25
V-86
Conventional excavation slope criteria: The slope criteria used in this study were
recommended by the Technical Associates on Geology, Slope Stability, and Foundations.
Cross sections used for feasibility determination and cost estimating purposes are shown in
Figures 7-2 and 7-3. Except for soft rock, these criteria are identical to those recommended
by the 1947 report.'* For slopes in soft rocks, previous criteria have been modified, as
shown in Figure 7-3, for those routes which are located so close to the present canal that
they involve relatively high risks of slides that might interfere with the Panama Canal.
On routes remote from the existing canal, an appropriate and economical method of
providing stable slopes in soft rock might be to flatten’slopes progressively, utilizing an
observational approach.* However, slopes on Route 14 must be excavated initially with a
sufficient margin of safety to ensure a high probability of no interruptions to traffic from
slides into the Panama Canal, or loss of Panama Canal water from slides into the new cut.
Nuclear excavated slopes: Nuclear excavation produces an apparent crater which is
approximately hyperbolic in cross section and is bounded by fragmented material
comprising the fallback zone. This material is deposited within the true crater at an angle
somewhat flatter than its natural angle of repose. In the rupture zone the original geologic
structure is disrupted, the medium permanently displaced, and many new fractures created.
An explosively excavated cut is a very complex structure and crater slope stability
predictions must be made indirectly or empirically by comparison with similar man-made
and natural slopes and by observation of existing craters.*° >»?!
Except in soft materials, the fallback and rupture zones of explosive cuts are
significantly more permeable than the surrounding undisturbed material and their
resistance to groundwater flow is substantially less than that of mechanically excavated
slopes. Therefore, cratered slopes in hard rock tend initially to be free draining, a condition
which reduces their susceptibility to the adverse effects of seepage pressures.
Crater slopes possess a number of features which are generally desirable in terms of
stability
— The slopes are buttressed by deposits of broken material which have significant
margins of safety against deep-seated sliding;
— Many pre-existing major planes of weakness have been disrupted; and,
— The materials within and behind the slopes should be initially free draining and
might remain so for the life of the canal.
Studies of craters produced to date suggest that explosive excavations in hard rock will
remain stable over the life of most excavation projects. However, all existing nuclear craters
in rock are in a desert environment and none is deeper than 250 feet.t In contrast, the
slopes of an Isthmian sea-level canal would be exposed to a tropical environment and their
*The observational approach would be applied by designing the steepest slopes that could be developed in accordance with
the knowledge available at that time. The stability of the slopes would be observed closely during construction. The
results of earlier excavation would be used as a guide to the design and construction of the remainder of the excavated
slopes. This was the approach used in constructing the Panama Canal. The objective of this approach would be to reduce
the excavation volumes from those shown in this report.
{Total depth from top of lip to bottom of apparent crater for Schooner. See Table 6-2.
V-87
ELEVATION-FEET
ELEVATION-FEET
|
t CANAL
400
300
N
o
°o
°
°
|
€ CANAL
|
200
150
100
50
Oo
1
¢ CANAL
400 |
1
‘i OVERBURDEN
oo ee, ae eT S00 VARIABLE ——â€
w
VARIABLE z
2 200
&
NOTE: 7 S
ALL SLOPES 12†on 144 ‘100 NOTE:
EXCEPT AS SHOWN w ALL SLOPES 12†ON
o 14 EXCEPT AS SHOWN
2 2
HIGH QUALITY ROCK INTERMEDIATE QUALITY ROCK
o
COTANGENT OF SLOPE
oO 50 100 150 200 250 300 350
DEPTH OF CUT (FEET)
LOW QUALITY ROCK
© CANAL
150
100
50
0 10
1
2.5
ELEVATION-FEET
UNCONSOLIDATED SEDIMENTS
EXCAVATED SLOPE CRITERIA FOR HIGH, INTERMEDIATE, AND
LOW QUALITY ROCK AND UNCONSOLIDATED SEDIMENTS?°
FIGURE 7-2
V-88
15
| a La =
lw
12 | (| Pe a
€ CANAL ee || a Lf
bE l a) (a ae A
te | 5 vee
|
200 Site
6 150 2
eae ce <3
=, 2 S
pee CON ss oe | | i |
0 100 200 300 400 500 600
DEPTH OF CUT (FEET)
e=—— 1947 ISTHMIAN CANAL STUDIES
o= “= 1970 APICSC EXTENSIONS
Curve A—For locations where the canal would be remote from the existing canal. (The existing
canal would be available for use during a proving period.)
Curve B—For locations where the canal would be separate from the existing canal but in close
proximity. (Excavation would be performed in the dry and gradual drainage would be possible
during construction. An observational period would be available during construction, prior to the
canal becoming operational.)
Curve C—For locations where the canal would be adjacent to the existing canal in an area with a
history of slides. (The area would have undergone long term creep, and the slopes would be
subject to rapid drawdown. The continued maintenance of traffic on the Panama Canal during
construction is required.)
EXCAVATED SLOPE CRITERIA FOR SOFT ROCK?®
FIGURE 7-3
maximum excavation might be as deep as 1,900 feet, i.e., a 1,200-foot apparent crater depth
plus a lip height of 700 feet. Because of these differences, extrapolation of cratering
experience to the analysis of slope stability for a nuclear excavated canal is tenuous and
uncertain. Significant differences between experience to date and potential canal excavation
requirements are:
— Heights of slopes for the canal would be more than five times as great as those in
the largest existing nuclear crater;
— Weathering of crater slope materials in the isthmian tropical environment would be
much more severe and rapid than at the Nevada Test Site; and,
— Groundwater is abundant and generally close to the surface in the Isthmus, whereas
in Nevada it is well below the existing craters.
There are indications that with increasing explosive yields, fallback would be denser
than that observed to date. As yields increase, fallback impacts from greater heights and acts
more effectively as a buttressing agent. On the other hand, this denser material may have
reduced permeability which could inhibit groundwater flow and increase seepage pressures.
V-89
As discussed previously, it has been suggested that, with increasing yields, air
liquefaction of the fallback might occur. This would tend to produce flatter and broader
craters than those predicted for this study. The effect of this phenomenon on slope stability
could be favorable, in that initially flatter slopes would be more stable; or it could be
unfavorable because of reduced buttressing of the rupture zone.
Natural rubble slopes were examined?†to determine indications of expected long-term
crater slope performance. Talus deposits* were found to be the natural rubble materials
most closely resembling crater fallback; however, crater slopes with more homogenous
mixtures of fragment sizes, are expected to have flatter inclinations and greater initial
stability than talus slopes. Long-term adjustments of crater slopes might be experienced as a
result of settlement, surficial erosion, and downward migration of fine grained materials.
Data on talus deposits in tropical regions are limited.
Geological samples from Routes 17 and 25 were subjected to slaking tests to ascertain
their susceptibility to weathering.*? Many of them slaked, indicating that weathering of
fallback would occur; however, the rate at which weathering would take place cannot be
predicted. Crater slope adjustments are expected to occur as a series of gradual ravelling or
surficial adjustments rather than through deep-seated slides. This, coupled with the excess
channel depths produced by nuclear excavation, suggests that weathering of fallback slopes
would not constitute a serious problem.
The influence of groundwater on crater slope stability can be evaluated only
qualitatively at this time. The increased permeability of the fallback and rupture zones tends
to minimize the likelihood of excessive hydrostatic pressures in the crater slopes; however,
there are no experimental data on which to base estimates of the rates of groundwater flow
through either the fallback or rupture zone. Cratering experiments in saturated, permeable
rocks are needed to obtain the data necessary for quantitative analysis of groundwater
inflow to crater slopes.
Over a long period of time clay shale slopes tend to reach the angle of residual internal
friction of the clay shale, which may be as low as 6 to 10 degrees. Excavations in this
material would require flatter slopes than would be produced by normal cratering
techniques. Small-scale experiments with chemical explosives suggest that explosive
excavation by multiple-row arrays could produce flat-sided cuts, but the outlook is poor for
approaching 6 to 10 degree slopes in deep cuts with nuclear explosives. Therefore, in this
study it was assumed that all clay shale materials would be excavated by conventional
means.
Appraisals were made of stability of nuclear excavated slopes along Routes 17 and
25.33 These appraisals were based on data acquired at the sites and on predictions of
expected slope height and cratering characteristics. Each route was subdivided into segments
having similar properties, and the slope stability of each segment was estimated. These
appraisals identified intervals of soft rock along each route where significant slope
adjustments might occur during the life of the canal. Special attention must be given to
these areas during the pre-construction investigation and design phases of canal construction.
Not enough data are available to justify any confidence in estimates of slope stability
along Routes 8 and 23.
*A sloping pile of rock fragments at the foot of a cliff.
V-90
CHAPTER 8
CHANNEL DESIGN AND TRANSIT CAPACITIES
General criteria for channels were derived from traffic projections developed in Annex
IV, Study of Interoceanic and Intercoastal Shipping.** They were accepted by the
Commission as a basis for conceptual design. In essence, these criteria established the
following requirements:
— Ship size: The canal must be capable of transiting ships up to 150,000 dwt*
routinely under all conditions, and occasional ships up to 250,000 dwt without
major expenditures for additional construction. Underwater structures built during
initial construction must be adequate for 250,000-dwt ships.+
— Transiting requirements: Initially, the canal must be capable of transiting
approximately 35,000 ships per year. Expansion must be possible to accommodate
60,000 annual transits by the year 2040, and an ultimate traffic volume of about
100,000 annual transits.
Customarily, channel widths are designed in accordance with empirically-derived
criteria expressed in terms of the maximum beam of transiting ships and the desired traffic
patterns. Under these criteria, channel bottom widths vary between about 3 beams for a
canal carrying one-way traffic to 7.6 beams for 2 lanes of traffic traveling simultaneously in
opposite directions.3* Channel depths often are designed at 110 percent of maximum ship
draft.
As will be discussed later, recent studies show that a sea-level canal should be 550 feet
wide with a parabolic bottom 75 feet deep at its edges and 85 feet deep along its centerline
in order to meet the Commissions’s criteria on ship size. (See Figure 8-1.) This single-lane
channel is referred to as the “design channel.’’ Based on current projections of shipping for
the year 2000, a canal having these dimensions would be large enough to pass about 95
percent of the world tanker fleet, an even greater portion of the bulk carriers, and all
*Deadweight tons (dwt). The deadweight tonnage of a ship is its fully loaded capacity in long tons (2,240 pounds), includ-
ing cargo, fuel, and stores, but not including the weight of the ship itself.
yApproximate dimensions for 150,000- and 250,000-dwt ships are:
Deadweight tons Length Beam Draft
(dwt) (ft) (ft) (ft)
150,000 970 148 55
250,000 1110 175 67
The 150,000-dwt ship with dimensions as shown has been designated the ‘‘design ship.â€
V-91
Mean Sea Level
= CENTER LINE
The design channel at mean tide, showing a 150,000 dwt ship. Channel side slopes
vary, depending on the slope stability criteria. At extreme low low tide, the water
level at the Pacific entrance of a canal could be 10 feet lower.
FIGURE 8-1
freighters.** The approximate size distribution* of ships expected to use an isthmian
sea-level canal at that time is shown below:
Ship Size Group Percentage of Ships
1000 dwt Using Canal in the Year 2000
in each Size Group
aga 5
10- 25 53
25- 50 11
50-100 6
100 - 150 1
150 - 250 1
100
A suitable channel excavated by nuclear means would have a width of at least 1,000
feet at a depth of 75 feet, and a hyperbolic cross section considerably deeper at mid-channel
than a conventionally excavated section of equal width. Such a channel would impose fewer
restrictions on navigation than the design channel. For that reason, unless otherwise
indicated, the following discussion relates to the conventionally excavated design channel,
through which ships would move in convoy.
A rectangular 1400- by 85-foot channel has been selected for the canal’s ocean
approaches. These dimensions would permit large ships to pass one another at reasonable
speeds, would give added maneuver room in open waters, and would be relatively
inexpensive to excavate. A small portion of the initial construction cost might be deferred
by constructing the approaches to a 1,000-foot width which should be adequate during the
early years of sea-level canal service.
*This distribution was developed from data presented in Annex IV, Study of Interoceanic and Intercoastal Shipping, using
the assumption that 46 percent of the cargo passing through the canal would be carried in freighters.
V-92
Maximum transit capacity could be obtained in a canal wide enough throughout its
entire length to accommodate two opposing lanes of traffic; however, the costs of
constructing this configuration by conventional means appear prohibitive and the canal’s
transiting capacity would far exceed foreseeable demands. Two smaller, less costly
configurations have been found satisfactory for most of the routes considered; these are the
single-lane canal (the one-way configuration) and the single-lane canal with two separated
one-way passing sections (the bypass configuration). Both configurations include two-lane
ocean approach sections which later could be extended inland from either ocean to increase
capacity by shortening the one-way sections. The choice of configuration depends upon the
capacity desired, the route’s length, the topography and geology, and the current velocities
considered acceptable.
Ship maneuverability in confined waters: To ensure positive steering at slow speeds, a
ship’s propeller must maintain an adequate flow of water past the rudder. Generally, ships
smaller than 50,000 dwt under their own power must proceed at speeds of at least 4 knots
while larger vessels must maintain at least 5 knots.
A ship moving through confined waters encounters greater hull resistance than one
operating in unconfined waters. In the design channel a combination of this phenomenon
with the loss of propulsive efficiency which occurs in confined waters would reduce the
maximum attainable speed of a 150,000-dwt ship, capable of 16 knots on the open sea, by
almost 6 knots; and the speed of a 250,000-dwt ship of similar capability by 8 knots.
Smaller ships would be less affected. (See Figure 8-2.)
If a vessel shorter than the canal width were to run aground, it could swing parallel to
the bank and avoid blocking traffic. However, most ships would be longer than the width of
the canal and might come to rest across the canal after grounding, blocking it completely.
To minimize the likelihood of such an occurrence, ships longer than the canal’s width*
would be accompanied by one or more tugs.
Tug assistance also would be needed to stop heavier vessels in an emergency because
water resistance alone would not be sufficient and the application of reverse power in
narrow channels is hazardous. When reverse power is applied, flow past the rudderis greatly
reduced and the pilot loses much of his ability to steer the ship. In addition, almost all ships,
including the large tankers and bulkers which are the most difficult to stop in a canal, have
only a single screw. Application of reverse power to such a ship causes its stern to move
laterally. A tug astern could be used to oppose this lateral force, permitting a part of the
ship’s reverse power to be used in stopping.
Stern anchors have been considered as a source of stopping force. They are effective at
land speeds of two knots or less; at greater speeds, either the anchor will drag, or its chain
will run out completely and be lost overboard. In view of the limitations of this stopping
technique and because some ships do not have stern anchors, stopping distances used in this
study depend on the use of tugs — not on anchors.+
*The canal width would be measured at the depth of the ship’s keel since the sloping banks of the canal would allow a
greater effective width for a shallow draft ship than for a deep draft one.
{Stern anchors might be employed effectively when the ship’s land speed has been reduced to 2 knots and the windlass
brake can exert a measured pull on the anchor chain as it pays out. They might be made a requirement for passage of
large ships, or could be provided on the tug which normally would ride astern of the ship it accompanies.
V-93
Tugs also would be used to hold back large ships in following currents. Without
increasing land speed, this would permit more propeller revolutions, increasing flow past the
rudder and improving the ship’s steering.
Tugs used in a sea-level canal should be highly maneuverable and able to exert full
thrust in all directions. Such tugs (See Figure 8-3.) might employ a steerable right angle
drive with a fixed shroud around the propeller to increase thrust (a Kort nozzle). Small tugs
of this type are now in use and the development of larger tugs to be employed in the canal
should not require a significant development effort. To ensure that adequate tugs would be
available when a sea-level canal is opened to traffic, their design and construction should be
undertaken at an early date. Prototypes could be tested in the Panama Canal and further
improvements made before the required tug fleet is procured.
Tidal currents: The transiting capacity of a canal depends on the ships’ speed relative to
the land. This speed is directly dependent on the speed which the ships can safely attain in
the canal and on the velocity of canal currents.
Full Power
16 ~
Open ocean
3/4 power
Full power
SHIP SPEED BY THE WATER, KNOTS
3/4 power
0 50 100 150 200 250
SHIP SIZE (THOUSANDS DWT)
Estimated maximum attainable speed of a ship on the centerline of the design channel for ships
capable of 16 knots in open seas.
FIGURE 8-2
V-94
2 stern propellers rotatable 360°
about their vertical axes, each
driven by a 1500-2500 horsepower
engine.
Conceptual design of a sea-level canal tug.
FIGURE 8-3
V-95
Because an isthmian sea-level canal would form an open waterway connecting the
Atlantic and Pacific Oceans, any difference between the levels of these two bodies would
induce currents in the canal. Measurements made over an extended period in the vicinity of
the Panama Canal show that the average level of the Pacific is above that of the Atlantic 55
percent of the time, and that mean sea level (msl) at the Pacific terminus is approximately
0.75 feet higher than that on the Atlantic.*® Tides along the Atlantic Coast of the
Panamanian Isthmus range up to 1.3 feet above and below msl, while on the Pacific Coast
they vary between about 5 feet above and below msl to about 10 feet above and below
msl.* These tides would generate periodically reversing currents through a sea-level canal,
with a net flow from the Pacific to the Atlantic caused in part by the average higher level of
the Pacific Ocean. (A freely floating object would take about two and one-half days to
transit an open sea-level canal at the location of the Panama Canal.)
Figure 8-4 shows tidal stages recorded during a typical week at the entrance of the
Panama Canal.
Currents in a sea-level canal, like the tides, would be cyclic with a 12.4-hour period. At
all points along the canal, they would change direction approximately every 6.2 hours, with
their velocities depending on the height and phasing of the tides, the size and variation of
the cross section, the length of the channel, and the roughness of the canal banks and
bottom. Figure 8-5(a) shows the 24-hour trace of an extreme Pacific Ocean tide. Figure
8-5(b) shows the variations in currents which this tide would cause in a 36-mile-long canal
along Route 10 with the design channel section. The dashed diagonal line AB in the figures
shows the progress and the speed in the water of a ship transiting this canal at a constant
land speed of 7 knots.
Channel design: The design of a sea-level canal must consider:
— Speed of the ship through the water. This varies with the power applied to the
propeller and governs safe navigating conditions.
— Speed of the ship by land. This is the algebraic sum of the ship’s speed through the
water and the tidal current. It governs transiting capacity.
In the opinion of Panama Canal Company pilots, a 7-knot land speed t would be
reasonable for all ships using a sea-level canal with tugs used where appropriate. A faster
land speed might be satisfactory with adequate safety precautions. Seven-knot land speed is
compatible with speeds maintained in other major confined waterways. A ship with a 7-knot
land speed would travel at 7 knots in slack water, 11 knots by water against a 4-knot head
current, but only 3 knots by water in a 4knot following current. +
*Greater tidal ranges occur 5 or 6 times each year. The maximum recorded tidal range at the Pacific entrance of the
Panama Canal is 21.7 feet.
+Land speeds of 6 to 8 knots were prescribed in the Gaillard Cut when it was 300 feet wide. The larger ships were required
to travel at lower speeds. Considerations other than ship safety restricted the speed of small ships to 8 knots in the narrow
cut. The cut has since been widened to 500 feet.
i Although the Panama Canal is usually considered to be without current, surges up to 1.5 knots occurred in the
300-foot-wide Gaillard Cut when the culverts were opened to fill the Pedro Miguel locks. Since the cut was widened to
500 feet, the surges have been reduced. Tides cause currents of up to 2 knots in the Pacific approach.
V-96
STAGE IN FEET PRECISE LEVEL DATUM
sas
ON
CHO NON AB @ ©
=
ATLANTIC TIDE (CRISTOBAL)
- DD Oo
(Ss) 6s) @) dS WS) o&} W
1
YY
22 23
SEPTEMBER 1957
PACIFIC TIDE (BALBOA)
Pacific and Atlantic tide traces
(from Panama Canal Company records)
FIGURE 8-4
V-97
Ship speed
in water
10 LE =N Sf =
Pacific tide 5
g
2 5 =
= $
3 S
at ee 3
eS
2
yr a
-10
0600 1200 1800
(a)
PACIFIC A
0
24 O23 3 -2-10123 4 a2 1 0123 WTI
£
o
c
o
oO
oa
c
2
o
3
&S
2
ATLANTIC 0600 1200 1800
Time (hrs)
(b)
Top figure: Extreme Pacific tide height (a). Ship speed in the water required for a land speed of 7 knots is shown by the
dashed line A, B.
Bottom figure: Resulting currents in a 36-mile canal on Route 10, with design channel (b). Numbered lines show currents
in knots. Arrows denote current direction. Ship enters from Pacific (A) at 1100 hours in a 3-knot following current and
reaches the Atlantic (B) at 1530 hours in a 3-knot head current.
FIGURE 8-5
V-98
Friction losses and diminished propulsive efficiency would limit the maximum speed by
water attainable by a typical 150,000-dwt ship in the design channel to about 11 knots.
Thus, if a land speed of 7 knots is to be maintained, the maximum allowable head currents
cannot exceed 4 knots. Similarly, if unassisted large ships are to maintain steerage and, at
the same time, not exceed 7 knots by land, the maximum allowable following current would
be 2 knots; with tug assistance, following currents of 4 knots or more would be acceptable.
Therefore, the channel has been designed to permit ship speeds by land of 7 knots, with a
maximum allowable head current of 4 knots. Such a channel could accommodate ships
traveling at 7-knot land speed in 4-knot following currents, if assisted by one tug.
Selection of the design channel cross section was based on an extensive search of
pertinent technical literature, mathematical and hydraulic model studies performed for the
Commission by the Stevens Institute of Technology and the Naval Ship Research and
Development Center, and analyses of traffic experience in the 300-foot-wide portion of the
Gaillard Cut of the Panama Canal.* Panama Canal data were of particular importance
because they reflect implicitly such factors as pilot capability, accident experience, and the
effects of banks similar to those of a sea-level canal, thereby providing means for correlating
predictions with operating experience. The results of these investigations are summarized in
the design curves of Figure 8-6+ which show channel depth and width as functions of ship
size and safe operating speed in water.
Figure 8-6 can be used to estimate:
— Channel dimensions required to enable ships of the maximum sizes specified by the
Commission to maintain a particular speed in water safely; and
— Safe speeds in water for these ships through a range of channel dimensions.
Selection of the design channel was based on the relationships shown in Figure 8-6. The
75-foot channel edge depth would provide clearance below the bottom of a 250,000-dwt
ship, should it approach the edge of the channel for any reason during most tide levels.
Deepening the center of the channel by 10 feet would provide ample clearance below the
keel while the ship is on its usual centerline position.t The design width is 550 feet. The
resulting 550- by 75/85-foot channel would permit a 150,000-dwt ship to make 7 knots by
the land against 4-knot currents. A 250,000-dwt ship could travel safely only at speeds up to
9 knots in the water, restricting transit of such ships to periods of favorable currents.
Calculated safe speeds in water for various size ships moving through the design channel are
shown in Table 8-1.
The bottoms of navigation channels in tidal regimens usually are made parallel to the
water surface at low tide. Application of this practice to an isthmian sea-level canal would
result in a bottom elevation about 10 feet lower at the Pacific end than at the Atlantic end
because of the greater range of Pacific tides. Since the sloping bottom would lead to
*A 60,000-dwt ship in the 300-foot-wide reach of the Gaillard Cut provided, in effect, an approximate hydraulic model of
a 250,000-dwt ship in the design channel.
tT The relationships shown on Figure 8-6 have not been verified by full-scale tests.
The parabolic bottom used in conceptual designs and cost estimates presented in this report involves approximately 7
percent less excavation than a flat-bottomed channel 85 feet deep.
V-99
100
Denotes 150,000
90 \ dwt ship
\ =- Denotes 250,000
i dwt ship
Design
e depth’ ee \ eeeeese? 2. ‘ Ship just touche
7 \ knots rs channel bottom
80 .
3
= s
o ;
®
eT oe
® e
© e.
= e
= es
ead
Oo e
60
50
300 400 500 600 700 800 900 1000
Channel bottom width, feet
Curves showing combinations of channel dimensions providing equal navigability for tankers
traveling on the channel centerline at the indicated speeds through the water. The dashed line
shows the design channel which permits a 150,000 dwt ship to transit safely under all
conditions and a ship as large as 250,000 dwt to transit safely under selected conditions.
Channel design curves
FIGURE 8-6
stronger tidal currents and more excavation, it was not adopted for this study. Instead, a
bottom centerline 85 feet below and parallel to mean sea level was adopted. The water
depth at the Pacific terminus would fall periodically below 85 feet, precluding safe transit of
the largest ships at all times. Such conditions would last for a small portion of a tidal cycle
and would affect less than one percent of all transiting ships. The effects of this limitation
could be all but eliminated through careful scheduling of ship transits through the canal.
V-100
TABLE 8-1
ESTIMATED SAFE SPEEDS OF LARGE SHIPS
TRAVELING UNASSISTED IN THE DESIGN CHANNEL
Approximate Percent Minimum
of Ships Larger Than Safe Speed Maximum Safe Speed
Ship Size Indicated Size Using the in the Water in the Water
(dwt) Canal in Year 2000 (Knots) (Knots)
50,000 More than 11
100,000 More than 11
150,000
200,000 0.2
250,000 Less than 0.1
Mitigation of the effects of currents: Current velocities place three requirements on ship
navigation. Every vessel must be able to:
— Maintain controllability in both head and following currents;
— Maintain the required land speed in the strongest head currents; and,
— Stop safely in the strongest currents.
If only a few ships were unable to meet these requirements, these ships could be scheduled
to avoid strong currents; however, if substantial numbers were affected by these conditions,
other measures would have to be taken, such as reducing current velocities to an acceptable
level, or increasing ship controllability by employing tugs or other external means.
Earlier investigations and those made for this study indicate that large ships could be
navigated safely through the design channel in currents up to 4 knots. Conclusive evidence
to support this is lacking and accordingly, methods for reducing current velocities have been
sought. Possibilities include constructing retarding basins at the canal ends, increasing the
channel length, widening the reach in which high velocities would occur, increasing the
hydraulic roughness of the channel, installing locks, and employing tidal check gates. The
most promising solution to this problem appears to lie in the use of tidal gates which would
prevent unacceptably strong currents by limiting the length of canal open to Pacific Ocean
tidal action. The gates could remain open during tidal cycles producing relatively low
V-101
currents. Some possible gate configurations are illustrated in Figure 8-7. Until such time as
prototype experience verifies that large ships can operate safely in stronger currents, tidal
checks would be used to ensure acceptable conditions. This could be done at relatively
moderate cost.
Figures 8-8 and 8-9 illustrate how tidal checks would be incorporated into the two basic
canal layouts evolved for this study, i.e., the one-way configuration and the bypass
configuration. For each configuration, tidal checks would be provided in at least two
locations. The distance from the gate on the Atlantic side to the Pacific entrance would
determine maximum velocity at the Pacific entrance; the closer the Atlantic side gate to the
Pacific, the lower the velocity.* For the design channel on Route 10, for example, the gate
on the Atlantic side should be situated no more than 28 miles from the Pacific entrance in
order to limit currents to two knots.+ This gate has been planned for installation only 25
miles from the Pacific so as to permit the last ship in a convoy to clear the channel while the
first ship in the next convoy in the opposite direction approaches the gate as it opens on the
tidal cycle. A second gate would be placed as close to the Pacific end as practicable to allow
the longest possible convoys.
On short sea-level canal routes such as Route 10, currents without tidal checks would
be appreciable for a large part of the time, and if navigation were not possible in currents
stronger than two knots, transit capacity would approach zero. Tidal checks would be
required to achieve the design transit capacity under these circumstances.
Because of their great size and weight, the tidal checks could not be shifted to an open
position except when the water levels on both sides of the gate were approximately the
same. This condition would occur regularly every 6.2 hours when the Pacific is at the same
elevation as the Atlantic. The gates would therefore be shifted at intervals of multiples of
6.2 hours as indicated on Figures 8-8 and 8-9.
Figure 8-10 shows the currents in a one-way canal configuration on Route 10 with tidal
checks 25 miles apart. The effect of tidal checks can be seen by comparing the currents in
this figure with those shown in Figure 8-4. If a 3-knot limitation were placed on currents in
a one-way canal on Route 10, the gates could be situated at both ends of the canal, about
34 miles apart.
The need to operate the tidal checks at set intervals would require strict navigation rules
and convoys of limited length. From an operational standpoint, therefore, it would be
desirable to avoid using tidal checks during tidal cycles when current velocities would be
acceptably low without them. Although tidal checks are included in canal designs to ensure
that current velocities do not exceed 2 knots, navigation in stronger currents would be
advantageous.? If experience shows that most ships can navigate safely in 4-knot currents,
tidal check operation might be suspended. Smaller, more maneuverable ships would transit
*The velocities at the Atlantic end would be minimal because of the small tides there. This contrasts with the unchecked
sea-level canal in which maximum tidal currents would occur at the Atlantic end.
+Two knots has been used as the lower limit of acceptable maximum currents in which large ships can navigate safely. This
is based on experience at the Panama Canal where ships have demonstrated a capability to operate in currents up to 2
knots.
£To facilitate this, gate sills would be installed during initial construction at appropriate locations for 2-, 3-, and 4-knot
current limitations.
V-102
BALLAST TANK
CONCRETE
CURTAIN
CLOSED
/POSITION
GATE IN RECESS
TRIANGULAR ROTATING GATE
TRIANGULAR ROLLING GATE STRUCTURAL STEEL SHAPES
CONCRETE CURTAIN WITH FLOTATION SYSTEM
Closure made by rolling gate from gate recess or Location of pivots at ends of gate permit synchroniza-
bypass channel, if adjacent, along track installed in tion of closure with tidal currents. Closure is made by
gate sill. positioning gate over either gate sill and lowering by
reducing bouyancy.
MACHINERY
WICKET GATE
SYMMETRICAL
ABOUT ¢ OF PIER
INFLATABLE DAM GATE
TWO-WAY WICKET GATE
Dam is raised by inflating a flexible fabric gate with In closure, wicket dams are raised from bottom sill by
water from external pumps. hydraulic operation of movable support arms.
SCHEMATIC DIAGRAMS OF SOME TIDAL CHECK GATE CONFIGURATIONS
FIGURE 8-7
V-103
=
wi
2
og
ec
Qa
oO
2
BS
a
x
wO
oc
a
a
APPROACH
DESIGN CHANNEL
a} Ww
w) Zz
2) <
z| 4
tS
Ol
TWO LANE
SINGLE LANE
AM AM AM PM
=
S
ATLANTIC OCEAN
17 MILES
CONVOY 2
—MP sess eee eee eee
s
: i
o .
o es
8 Q ; :
2 2
ee) |r : 1
= z
Se ssitl" S : '
= I
SE =
= Qa ® I
Oo ke . I
> s
4 !
Oo y I
s
s A mo
eM >
e I Oo
s >
an Zz
o] oO
s
| = i |
=I
PACIFIC OCEAN =
0 rel
Step 1 Step 2 Step 3 Step 4 Step 5
Gates move at Convoy 1 has Gates move at Convoy 2 has Gates move at
mean tide as cleared one-way mean tide as con- cleared one-way mean tide as con-
convoy 1 is channel and con- voy 2 is between channel and con- voy 3 is between
between them and voy 2 is about to them and moving voy 3 is about to them and moving
moving toward enter it from the toward the enter it from toward the Atlantic.
the Atlantic. Atlantic. Pacific. the Pacific.
For control of tidal currents when entire convoy is between gates, tidal checks can be located at the ends of the
one-way channel section. The checks would be operated when the Atlantic and Pacific Oceans are at about the
same level. As illustrated alternative convoys would transit the design channel in the sequence of tidal check
operations presented above.
OPERATION OF TIDAL CHECK GATES AT THE ENDS OF A ONE-WAY RESTRICTED CUT
FIGURE 8-8
V-104
APPROACH
—
w
2
2
At
2S
a2
>o
2H
w
oS
NUCLEAR
APPROACH
CHANNELS
DESIGN CHANNEL
DESIGN CHANNE
Two lanes
Two lanes
Two lane
3 miles
2 miles
CONVOY 1A
(length to scale)
CONVOY 1B
Step1
Convoys 1A and 1B
are in the bypass
section about to
enter the one-lane
sections.
>
=
A
Step 2
Convoys 1A and 1B
are in the one-way
sections about to
enter the two-lane
sections at canal
ends.
xt
N
>
Oo
>
=]
oO
o
seseeeeees ee
ieee 2 = =
@e220200 © © op
CONVOY 2B
PACIFIC OCEAN
Step 3
Convoys 1A and 1B
are in the two-lane
end sections moving
seaward. Convoys
2A and 2B are in
the two-lane end
sections about to
enter the one-lane
section.
:
Step 4
Convoys 2A and 2B
are in the one-lane
section about to
enter the bypass
section.
PM
Step 5
Convoys 2A and 2B
are in the bypass
section about to
enter the one-way
sections.
A bypass in the one-way section expedites the movement of traffic. Tidal checks for control of current would be
constructed at the ends of the bypass. As in the design one-way configuration, the checks would be operated when
the water level in the Pacific is about the same as in the Atlantic. The sequence of traffic movements with tidal
check operation are illustrated above.
OPERATION OF TIDAL CHECK GATES AT THE ENDS OF A BYPASS SECTION
FIGURE 8-9
V-105
Tide height, feet
Distance along canal, miles
Ship speed in
water
Pacific tide
Pacific Tidal Check
Tidal check
closed
Tidal check Tidal check
closed B
as
Atlantic 0600 1200 B 1800
Time (hrs)
(b)
Extreme Pacific tide (a) Resulting currents in a 36-mile design channel on Route 10 with tidal checks (b). Numbered
lines show currents in knots, and arrows, direction. Tidal checks shown operating every 6.2 hours in example, but
can be operated in multiples of 6.2 hours. Ship enters from Pacific (A) at 1100 hrs in 1.1 kt head current, and
reaches Atlantic (B) at 1730 hrs in slack water. Ship speed in water required for a land speed of 7 kts is shown
by the dashed line in the top figure.
FIGURE 8-10
V-106
Ship speed in water, knots
without regard to current velocities, while larger ships would transit in favorable currents. *
Environmental considerations, however, might dictate continuous operation of the checks in
order to limit transfers of biota between the oceans. (See Chapter 10.)
Ship spacing: A minimum ship spacing of 4 ship lengths measured bow to bow, or 3
lengths clear space between ships, is generally used in confined waterways. In this study, a
bow-to-bow spacing of 4 ship lengths has been used for freighters, and 5 lengths for the
more massive tankers and bulkers. This results in an overall average spacing of 4.2 ship
lengths per ship, or about 2 ships per statute mile of convoy length. This spacing provides
sufficient distance for most ships, with the help of tugs, to avoid colliding with the
preceding ship should it stop suddenly. Table 8-2 shows that the clear space of 3 ship
lengths is adequate for stopping tug-assisted ships of up to about 150,000 dwt in 4-knot
following currents. Additional clear space for the occasional ships larger than 150,000 dwt
would be provided as required by the current velocities prevailing during transit. This added
spacing for very large ships would not significantly affect the average number of ships per
mile of convoy.
TABLE 8-2
SUMMARY OF SHIP STOPPING DISTANCES
FROM A SPEED OF SEVEN KNOTS
RELATIVE TO THE LAND
Assisted Stopping
Distance in 4-Knot
Ship Size Number of Tugs Following Current
(dwt) (3000 hp Each) (Ship Lengths)
25,000
50,000
100,000
150,000
200,000 3 3.6
250,000 3 4.2
* Experience indicates that while head currents reduce the stopping distance of ships, the greater speed in water required to
maintain constant land speed increases the difficulty of handling large ships in confined waters. Thus, some ships might
navigate more readily in a following current, others in a head current.
V-107
Canal capacity and operation: Canal capacity would be affected by a number of factors,
all of which must be evaluated for each particular canal alternative. These include
operational interferences such as bad weather, mechanical failures, dead tows and irregular
arrival of ships. Of these, irregular ship arrivals probably would have the greatest influence
upon capacity. To provide a basis for comparing the several routes, the average time in canal
waters (TICW)* has been limited to 20 hours at the canal’s rated capacity. As much as
possible, arriving ships would form convoys “on the fly†while still at sea to preclude delays
and avoid the difficulties of getting a large number of ships underway from anchorage. The
lead ship of each convoy would enter the one-way section of the canal shortly after the last
ship of the convoy in the opposite direction leaves it.
The average TICW is affected only slightly by increases in transits, until transits
approach about 90 percent of the canal’s capacity, when its TICW rises rapidly.+ The
20-hour average TICW selected for capacity comparison occurs at about 90 to 95 percent of
capacity for all but a few configurations. Figure 8-11 shows how the average and maximum
TICW for Route 10 change as the number of transits increases.
The maximum transit capacity which can be attained with a sea-level canal depends on
a balance among four factors: cycle time, + canal length, distance between tidal checks, and
convoy speed. The use of tidal checks, as previously described, requires that the cycle time
have a duration of multiples of 6.2 hours. A 6.2-hour cycle time cannot be used in a 34-mile
canal (Route 10), since a one-ship convoy in one direction followed by another in the
opposite direction would take about 9 hours just for transiting at a 7-knot land speed. A
12.4-hour cycle would allow 34,000 transits a year in such a canal. Of the 6.2 hours allotted
for the convoy to travel in one direction, 4.5 hours would be required by the last ship
entering to transit and clear the canal before an opposing convoy could enter it. The
remaining 1.7 hours allow a convoy only 13.7 statute miles long, which would not fully
utilize the 21 miles maximum allowable convoy length available in the 25 miles between
*TICW is the sum of waiting time and transit time. For purposes of this study, waiting time includes time lost by ships
which would have to slow down at sea to enter the canal with a convoy at scheduled times. Transit time includes only the
time required to pass through the one-way portion of a canal. Average TICW for the Panama Canal in 1969 during periods
when all lock lanes were operational was 18 hours.
+ Queuing theory was used to determine the effects of random ship arrival on waiting time.
Ei Cycle time is the interval between the entrance of successive convoys traveling in the same direction.
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TICW (hours)
100
80
60
: ce a ee a ee ee ei
20 oe Peery
sea ca (eae eae ae ser
40 60 80
Percent of Capacity at which Canal is Operating
Time in canal waters versus percent of capacity for a 36-mile one-way canal along Route 10. This is
based on continuous use of tidal checks, a 12.4 hour cycle time, seven knots average land speed and a
15 minute interval between the last ship of one convoy clearing the one-way channel entrance and the
entry of the lead ship of the next convoy.
FIGURE 8-11
V-109
100
tidal checks.* Convoys 21 miles long can, however, be used with a cycle time of 18.6 hours.
In this cycle the Pacific gate would be closed continuously for 12.4 hours after which it
would be open for 6.2 hours. The Atlantic gate would be closed during the 6.2 hours when
the Pacific gate is open. The increase in convoy length more than offsets the decrease in the
number of convoys possible, and capacity increases to 38,000 transits a year. A further
increase in cycle time serves only to decrease the number of convoys without a
corresponding increase in convoy length; it results in lower transit capacities. In the
configuration discussed above, a 7-knot land speed is compatible with the 25-mile tidal
check spacing selected to limit currents to less than two knots. This permits the last ship in
one convoy and the first ship in the second convoy to traverse the 25-mile distance, with
allowances for safe operation, in the 6.2-hour interval in which the tidal checks can be
moved without wasting available convoy space.
Variations in tide levels associated with the lunar cycle periodically cause conditions
during which currents may remain low enough to permit transiting without gates. At such
times, only the very largest transiting ships would be tied to tidal cycles, and the choice of
cycle time would become arbitrary. Transits could increase during these periods, with ship
arrivals scheduled well in advance to take maximum advantage of opportunities for
increasing the number of ships accommodated.
Lengthening the distance between tidal gates tends to provide an increase in transiting
capacity by allowing longer convoys, but this results in higher peak currents. A practical
limit on this distance is also imposed by the land speed of the ships, i.e., they must be able
to travel the appropriate distance in time to meet the schedule of gate movement.
In a bypass configuration, convoys entering opposite ends of the canal would be
scheduled to pass each other in the divided section (See Figure 8-9). When these convoys
have cleared the canal, the operation would be repeated. In a canal without tidal checks, the
main advantage of a bypass is that it permits a short cycle time at low traffic levels. Its
disadvantages lie in limitations it imposes on convoy lengths, the more rigid traffic control it
requires, and its inability to accommodate variations in cycle time under conditions of fixed
land speed. The effect of a bypass on transit capacity depends on the length of the canal and
the length and location of its bypass. At least one bypass would be necessary to obtain
35,000 annual transits in any single-lane canal longer than 50 miles. In shorter canals a
centrally located bypass would reduce TICW significantly until transit growth is constrained
by the short maximum length.T In this case, operating the canal without using the bypass
may allow more transits.t If tidal checks must be used, a bypass not only reduces TICW but
increases capacity also. Table 8-3 compares the effects of tidal checks on capacity of Route
10 in configurations with and without a bypass.
*This provides 2 miles clearance at either end of the convoy to allow time for shifting of the gates without stopping the
convoy.
+The convoy length would grow with increasing traffic. Its maximum length would approach the length of the bypass
section.
{A bypass also would provide a significant part of the canal length required for expansion to two one-way lanes should
that become necessary as a means of providing additional capacity.
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Automated traffic control: Even the largest ships are subject to so few restrictions while
at sea that no special operating procedures are required. Within the confines of a sea-level
canal, however, systematic automated control of both ships and canal operations would be
necessary. In addition to providing operational data on every ship, and on the changing tides
and weather conditions, such a system would assign vessels to their positions in convoys,
and schedule convoys several days in advance to ensure efficient operations. Similar
concepts are used in air traffic control and in controlling traffic on the St. Lawrence
Seaway. A measure of the need for automated control is apparent when it is realized that to
transit 60,000 ships per year without tidal checks would require the daily formation of two
convoys, each over 40 miles long and containing over 80 ships. Operation with tidal checks
would involve smaller convoys but more rigid control.
TABLE 8-3
TRANSIT CAPACITIES OF A SEA-LEVEL CANAL ALONG
ROUTE 10 WITH AND WITHOUT A 14-MILE CENTRALLY LOCATED
BYPASS AND WITH 20-HOUR AVERAGE TIME IN CANAL WATERS
Tidal Checks Located for Maximum Currents of
2 knots®@ 3 knots@ Allenoted
Without 38,000 (100%) 45 000 (90%) 66,000 (26%)
With 56,000 (100%) 56,000 (100%) 57,000 (78%)
Tidal check gates operate when necessary to maintain current velocities below this accep-
table value. Figures in parentheses show the percent of tidal cycles during which tidal
checks must be used to limit the canal currents to the values shown.
bThis indicates that if Operation in currents up to 4 knots is acceptable, there is no advantage
to a bypass on this route.
Other design factors: For the routes investigated in this study and the size of channels
involved, project cost is relatively insensitive to such criteria as minimum radius of canal
curves, minimum distance between curves, and maximum angle of turn. Accordingly, the
plans and estimates of this study are based upon criteria which are more favorable to
navigation than those of most of the world’s waterways.
A ship in motion generates a characteristic pattern of waves. This pattern changes when
the ship moves from deep to shallow water and into the confined reaches of a canal. Much
of the ship’s power is lost in making waves, thus reducing its attainable speed. Hydraulic
V-111
model tests of ships in canals, including those undertaken for the Commission, have
reproduced the wave systems generated by ships in confined waters. These tests showed that
while waves tend to reduce ship speed, they could be tolerated by adequately powered ships
operating in the design channel.
Waves caused by ships moving in restricted waters can cause damage to unprotected
shore installations and canal banks of soft materials. At the Suez Canal, for example,
considerable construction has been undertaken to protect the sandy banks from wave wash.
Bank protection would be provided for the isthmian sea-level canal in reaches where bank
materials are susceptible to erosion.
Increasing capacity at minimum cost: The canal designs proposed in this study were
based on conservative navigation criteria. It is likely that continued research and experience
would demonstrate that these criteria could be relaxed. This could lead to either a less
expensive canal or a greater throughput with the present design. Some of the measures
affecting navigation which should be considered in the final design and in the operational
phase are:
— Operating in faster currents. This would serve to increase capacity, particularly if
continuous operation of tidal checks were not necessary.
— Operating without tidal checks. This would permit much greater flexibility in
scheduling, thus reducing waiting time and increasing capacity, but it would only
be effective if operation in currents above 4 knots were shown to be practical.
— Operating at land speed above 7 knots. This would increase capacity with or
without tidal checks, if ship spacing did not have to increase commensurately.
— Constructing a small bypass. Expansion plans call for the bypass channel to be the
same size as the design channel. It could be constructed with a channel of about
450- by 50-feet, which would accommodate most of the ships desiring transit.
Large ships would use only the main channel; the smaller ships could use either leg.
(On Route 10 the cost difference between a bypass excavated to design channel
dimensions and one 450- by 50-feet is about $140 million.)
— Developing passing procedures so that smaller ships could transit the restricted
section in a two-way mode.
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CHAPTER 9
COST ELEMENTS
In general, throughout this study, construction cost estimates include the cost of all
work necessary for complete facilities, ready for operation and meeting all project
requirements. Operation and maintenance cost estimates, including plant replacement costs,
also have been developed and are shown separately. Interest and amortization are not
included in either of these cost categories; they are discussed in Annex III, Study of Canal
Finance.
Because of the project’s size, estimates included in this study are more fully developed
than those of most engineering feasibility studies. Excavation quantities have been estimated
from preliminary design drawings and maps reflecting the best available data and
information. Unit prices include allowances for minor items not estimated separately. Since
channel excavation would be the principal cost element, excavation systems have been
developed in detail and costed to include a breakdown of plant, labor, and other charges.
Contingencies and costs for engineering, design, supervision, and administration are included
as separate items. All costs are in terms of December 1970 dollars.* The Chief of Engineers
will maintain records for updating these cost estimates, if necessary.
Construction costs: Costs included in the estimates in this Annex have been limited to
those directly associated with the design and construction of an isthmian canal. Principal
cost elements are:
— Construction items such as clearing, relocation, excavation, evacuation of the
nuclear exclusion areas, flood control, harbors, highways, operating facilities,
health and sanitation, and support facilities for construction and transit operation.
— Contingency factors which are applied to the construction items’ cost to meet
unforeseen conditions. Contingency allowances normally used in engineering
feasibility studies range from 15 to 25 percent. Reflecting the degree of refinement
to which analyses of the several alternatives have been carried, allowances for
*In keeping with the usual government practice for water resources projects, no allowance has been made for inflation.
This policy stems from the belief that inflation affects both costs and benefits of projects to approximately the same
degree, and that the estimation of a reliable factor for inflation over the lifetime of a large construction project is
impractical.
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contingencies for each major feature considered by this study were made in
accordance with the following schedule:
Percent of
Type of construction itemized costs
Conventional excavation 10*+
Conventional construction, 20+
other than excavation
Nuclear construction, less 30t
supporting work
— Engineering and overhead costs involved in planning, managing and supervising the
construction effort. These are added to the base construction costs and include
such items as collection of topographic, meteorologic, hydrologic, and geologic
data; testing foundation material; preparation of engineering reports and design
memoranda; development of plans, specifications, and cost estimates; supervision
and inspection of construction; and overhead costs of managing and supervising the
project. For the purposes of the feasibility study, these costs were taken as 7
percent of the total estimated base construction costs, including contingencies.
Operation and maintenance costs: Operation and maintenance costs are those
continuing costs incurred in the operation and maintenance of the facilities directly involved
in the operation of the canal. Although the canal operating organization may engage in
other activities, no attempt has been made to estimate their extent.
*The Technical Associates have recommended that estimates of conventional excavation volumes be presented as ranges
based on available knowledge of geological conditions:
Ranges with respect to
computed volume
Routes remote from the Panama Canal +30 to -10 percent
Routes proximate to the Panama Canal +20 to- 5 percent
In their opinion, total quantities excavated would be within these ranges which provide for possible future changes in the
understanding of the site geology and slope stability. These ranges have been considered in estimating costs of the
conventional routes and in making comparisons between routes; however, for convenience and to conform with normal
procedures, only the base estimates are presented herein.?7
fInitial estimates for the routes showed that contingency costs for all conventional construction, including excavation,
averaged about 12% of the base cost of these items. Consequently, 12% was used as the contingency factor for all
construction costs except those for nuclear operations.
EThe AEC does not believe that a blanket contingency of 30 percent to nuclear construction is desirable, as the
uncertainties surrounding nuclear excavation do not lie in the cost of nuclear explosives or explosive related field
operations. Such uncertainties lie in the area of providing a useful channel without substantial modification by
conventional means. Consultants and advisors to the Engineering Agent, citing the lack of experience in multiple
cratering, recommended contingency factors in the range of 50 to 100 percent. In light of these considerations, the
Engineering Agent selected 30 percent as an appropriate contingency factor to be applied across-the-board to cost
estimates for nuclear construction in this study.
V-114
Operation and maintenance costs have been subdivided into those which vary only
slightly from year to year (fixed costs), and those which vary with the number of transits
(variable costs). Because many of the routes lie in undeveloped areas, the operating
organization would have to provide essential supporting services for project personnel, as
well as perform the normal functions of administration, waterway operation, and
maintenance. Supporting services for ships would include traffic control centers, aids-to-
navigation, communications, maintenance equipment, and the provision of marine pilots
and tugs. Maximum dependence would be placed on the private economic sector of the host
country to provide ancillary supporting services. A reliable adequate water supply would be
an important consideration in a lock canal. Some costs would be relatively constant over a
wide range of transit levels, while other costs, such as those for marine pilots, would vary
almost directly with the number of transits. The total operation and maintenance cost
would be the sum of the fixed costs, the variable costs, and the costs of major replacements.
Thus, as the number of transits increases and more ships share the fixed costs, the cost per
transit decreases. Operation and maintenance costs are strongly dependent upon the length
of the canal.
Real estate costs: Cost estimate totals shown in this study do not include land
acquisition costs, since royalties based on a rate per ton of transited cargo are expected to
constitute the entire reimbursement to the host country. However, the value of all real
estate required for the project has been estimated according to the following criteria:
— Fee title for the canal and adjacent land for permanent facilities;
— Permanent easements for access roads and for land that may be occasionally
inundated; and
— Temporary easements for spoil areas and other areas needed only during
construction.
Other costs: Not included in this study are first costs for defense facilities and support
facilities not related to transit operations; treaty costs including acquisition of land and
improvements, and resettlement other than evacuation; interest on capital investments, and
intangible costs for indirect effects and their economic impact.
V-115
Wooden huts, such as these at Curiche, were constructed
The barge shown here was used as a floating base camp on
at the main base camps.
the Atrato River since there was very little solid ground in
the area for establishing land-based camps.
Temporary camps, such as this one near Morti on Route
17, were set up to support data collection parties
operating out of the base camps,
Camp facilities were chosen to fit the local environment and the length of time they would be needed.
V-116
CHAPTER 10
ENVIRONMENTAL ASPECTS
Initially, emphasis was placed upon terrestrial and marine bioenvironmental investiga-
tions conducted to assess the possible transfer of radionuclides to man through various food
chains. Simulation techniques were developed to predict the canal’s modification of certain
environmental parameters, particularly the redistribution of radionuclides. As the study
progressed, emphasis shifted to the probable effects of biotic interchange between the
oceans. A tabulation of studies sponsored by the Commission and relevant to environmental
concerns is given in Table 10-1.
As a result of these studies and other pertinent investigations, certain general
evaluations of the major environmental effects of building a sea-level canal can be made in
terms of:
— Damage to living resources from various types of excavation;
— Dispersal and biological transfer of radionuclides from nuclear excavation;
— Potential physical and genetic damage to biota from radiation;
— Biotic interchange between the Pacific Ocean and the Caribbean Sea through a
sea-level canal;
— Ecological changes in Gatun Lake caused by increased salinity if the lockage water
is augmented by pumped seawater; and,
— Modification of the Atrato wetlands with resultant effects on the estuaries of
Candelaria and Colombia Bays.
The outcomes of such complex situations are not yet known. Nevertheless, the
Commission’s investigations have been carried to a point where preliminary judgments can
be made on the necessity and feasibility of countermeasures, the acceptability of risk that
might be involved, the possible penalties for accepting damages, and the need for additional
studies. 3839
Environmental effects of excavation and spoil disposal: Regardless of the method
employed for its excavation, construction of a sea-level canal would require the disposal of
immense quantities of spoil. It would be necessary, therefore, to place this material so as to
avoid adverse environmental consequences. Typical of problems of this nature that might be
encountered is the disposal of spoil in Gatun Lake. If material removed by conventional
cut-and-haul methods were placed there, it would alter the lake’s characteristics. As it
WALT
Subject Area
Terrestrial and
marine environ-
ment
Human ecology
in Panama
Human ecology
in Colombia
Agricultural
ecology
Terrestrial
ecology
Freshwater
ecology
Estuarine and
marine ecology
Marine
resources
Hydrologic
redistribution
of radionuclides
Radionuclide re-
distribution in
tropical rain-
forests
TABLE 10-1
PRINCIPAL ENVIRONMENTAL STUDIES
Investigating Agency
Battelle Memorial
Institute, Columbus,
Ohio
Dr. R. Torres de
Arauz, Panama, Re-
public of Panama
Ecuadorian Institute
of Anthropology and
Geography, Quito,
Ecuador
University of Florida,
Gainesville, Florida
University of Georgia,
Athens, Georgia
Battelle Memorial
Institute, Richland,
Washington
Puerto Rico Nuclear
Center, Mayaguez,
Puerto Rico
University of Miami,
Miami, Florida
Hazelton-Nuclear
Science Corp., Palo
Alto, Calif.
Puerto Rico Nuclear
Center, San Juan,
Puerto Rico
Research Results
Planned, managed, and reported on overall |
bioenvironmental investigations required for }
nuclear safety feasibility study. |
Obtained demographic data on human pop-
ulation groups in Darien Province, Panama.
Obtained demographic data on human pop-
ulation groups in Choco Province, Colombia.
Obtained data on the agriculture in the regions
around Routes 17 and 25, including elemental
analysis of samples.
Described and classified terrestrial ecosystems
in regions of Routes 17 and 25 and estimated
transfer of radionuclides among ecosystems.
Collected data; evaluated and predicted potential
radiation exposure through freshwater systems
in regions of Routes 17 and 25.
Collected data; evaluated and predicted potential
radiation exposure through marine food chains
in regions of Routes 17 and 25.
Reviewed and collated data on marine environ-
ment in Isthmian region, with emphasis on com-
mercial fisheries.
Prepared model for estimating hydrologic
redistribution of radionuclides in the vicinity
of Routes 17 and 25.
Determined behavior of radionuclides in ex-
perimental tropical forest to compare with forest
areas in the vicinity of Routes 17 and 25.
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TABLE 10-1
PRINCIPAL ENVIRONMENTAL STUDIES (Cont'd)
ubject Area
Radioactivity
dose estimation
Marine
organisms
Effects on
marine ecology
Medico-ecology
studies, Routes
10, 14, 17, and
25.
Numerical
computations of
tital currents in the
proposed sea-level
canal
Marine ecological
research program
Investigating Agency
Oak Ridge National
Laboratory, Oak
Ridge, Tennessee
University of Miami,
Miami, Florida
Battelle Memorial
Institute, Columbus,
Ohio
Office of the
Surgeon General,
U.S. Army
Massachusetts
Institute of
Technology, Cam-
bridge, Massachusetts
National Academy
of Sciences/National
Research Council
Research Results
Estimated doses to individuals or popula-
tion groups in vicinity of routes in-
vestigated for nuclear excavation.
Provided geographical distribution data on
marine organisms to assist in evaluating
effects of biota mixing.
Estimated possible effects of intermixing
marine biota from the Pacific Ocean and the
Caribbean Sea.
Compiled data on diseases, vectors, and
health conditions that would be encountered!
in construction on canal routes.
Estimated the currents and net flow of water
from the Pacific to the Atlantic for various
sea-level canals.
Proposed future program for ecological
research, emphasizing mixing of marine
biota.
became shallower, environmental changes inevitably would occur, followed by a change in
its ecological balance.
If spoil were placed in adjacent valleys or other low elevations, the vegetation and
animal life of that and adjoining areas would be affected. Construction of access roads and
other support facilities also would modify the ecology of the region. The rate of biotic
redevelopment, which generally is rapid in tropical environments, would depend on the
fertility and diversity of the spoil. Alluvium, muck, and weathered rock would be
particularly conducive to rapid regrowth. Igneous material from deep excavations would
weather slowly, requiring the passage of several years before plant communities could be
established upon it. Because of differences in geologic origin of spoil, as well as differences
in regional and internal drainage, parent material weathering history, and successional
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status,* the returning plant and animal communities might differ from the original
occupants of the area.
Most excavated material would be removed from depths at which tropical leaching
processes have not operated to deplete its fertility. Properly placed with adequate drainage,
this spoil soon should be suitable for farming, furthering governmental efforts to place more
people on the land. Comparable opportunities might be available from dredged materials.
Nuclear safety studies conducted for the Commission have shown that hazards to
human populations living near the nuclear alinements could be minimized by using
improved explosives and emplacement techniques and by temporarily evacuating residents
from specified exclusion areas. An area 15 to 20 miles wide and 20 to 25 miles long would
be subjected to substantial airblast and ground shock from each nuclear cratering
detonation. An even greater area would be subjected to radioactive fallout and resultant
potential biological damage. The possibility of genetic alteration of local members of plant
and animal species from canal excavation is difficult to assess. Although not considered
likely to be serious, changes of this type remain an area of concern, requiring continued
study.
Plant and animal populations of the area would be harmed by soil and rock ejected
from the cut, as well as by radiation. Ejecta would range in depth from several hundred
feet at the lips of the cut to a few inches at distances of several thousand feet from the
canal, killing most life forms in the area so covered.
Although the territory affected by spoil disposal, radioactivity, or ejecta deposition
would be extensive, it would be small compared to the entire region having similar biotic
composition. Lasting adverse environmental consequences of the excavation process are not
expected to be significant.
Ecological transfer of radionuclides: Detailed bioenvironmental studies were conducted
in the regions of Routes 17 and 25 as part of the overall nuclear safety investigations. These
studies were directed primarily at the evaluation of the potential exposure of people to
radiation. Should nuclear excavation be employed, some radionuclides would be introduced
into aquatic and terrestrial ecosystems, and ultimately would appear in fish, birds, and other
animals, including man. With proper precautions, human exposure to radionuclides
transmitted by food chains could be controlled effectively. A small possibility remains,
however, that biologic accumulations and concentrations of harmful radionuclides could
occur in areas remote from the construction site. Danger to humans from such a possibility
would be avoided by radiologic surveys of organisms in which radionuclides are likely to
concentrate. The studies that have been conducted to date lead to the belief that biologic
concentrations of radioactivity at levels that would endanger humans would not be likely to
result from nuclear excavation along any of the canal routes considered.
While primary attention was focused on cultivated crops, plants, and animals in food
chains leading to man, broader ecological studies also were made. Numerous biotic samples
were collected and analyzed to characterize general ecological systems, and to evaluate the
food chain transport of radionuclides. In addition to detailed studies of terrestrial and
*Relative developmental stage of plant and animal communities along semi-predictable lines of replacement tending toward
ecological stability.
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freshwater ecosystems, marine and estuarine physicochemical and ecological studies were
carried out at a number of stations along the Pacific and Caribbean coastlines. These field
investigations included chemical analyses of water and organisms, and diffusion studies at
various offshore locations to estimate potential movements of radionuclides.
Biotic interchange: An unobstructed sea-level canal across Central America would allow
relatively easy passage of marine organisms. Certain forms of marine life now pass through
the Panama Canal even though Gatun Lake provides a highly effective biotic barrier.
Barnacles and other immobile organisms are carried through on the hulls of ships, and some
small plants and animals survive in ballast water carried from one ocean to the other.
Linking the oceans with an unobstructed salt water channel would greatly facilitate the
movement of these and other organisms.
The net flow of water from Pacific to Atlantic would depend upon the size, length,
location, and configuration of the canal. This flow would average as much as 100,000 cubic
feet per second in a relatively short unrestricted canal (Route 17); on the other hand, a
freely floating object would take as long as ten days to move from the Pacific to the
Atlantic through a 100-mile unrestricted canal on Route 25. The use of tidal check gates
would reduce flows greatly. Proper timing of gate movements could reduce the net flow to
zero, although there would be some mixing through the open gates, similar to the mixing
and flushing action in any tidal estuary.
Pacific water, though slightly cooler than that of the Caribbean, has about the same
salinity. Periodic tidal flow in a salt-water connection would aid the movement of
free-swimming species and the passive transport of small organisms from one ocean to the
other. A canal would also provide transitional habitats where organisms could be harbored
pending their adaptation and dispersal. Conversely, the planned use of tidal gates and the
sedimentation, turbulence, and freshwater inflow of a sea-level canal would serve to restrict
the extent of any migrations.
Taxonomic studies indicate that the Atlantic and Pacific ocean species along the
Isthmus are closely related, even though few are identical. This similarity results from the
linking of the Atlantic and Pacific Oceans until recent geologic time, perhaps 3 million years
ago. When such closely related species are allowed to intermingle, several results may occur.
Concern has been expressed about three potentially undesirable biologic consequences of
such intermingling through a sea-level canal:
— Some invading organisms might be so highly successful in their new environment
that they could disrupt the previous ecological balance and become pests.
— Successful migrants through the canal could carry parasitic organisms for which
defense mechanisms do not exist in the new environment. Although such a
possibility cannot be dismissed entirely, experience in other similar areas leads to
the belief that it is unlikely to be a significant threat. In past geologic eras, marine
fauna of the isthmian region were free to interact. Their subsequent separation by
the isthmus, while permitting and creating different ecosystems in the two oceans,
probably has not significantly affected the internal environment of the host fauna
for the parasite. Thus, migrant parasites are expected to be less harmful than totally
alien organisms.
V-121
— Pairs from similar species might interbreed freely but produce infertile offspring.
Under certain possible, but extremely unlikely conditions, this could lead
ultimately to the extinction of both species. The few aquarium breeding
experiments carried out so far on related Atlantic and Pacific fish species are
inconclusive. Since many species pairs have not yet been tested, the possibility of
extinction of some species cannot be eliminated.
The situation most nearly comparable to an American Isthmian sea-level canal is the
biotic passage created a century ago when the Suez Canal was built, linking the Red Sea and
the Mediterranean. (Aquatic plants and animals around Suez are not so closely related as are
those of Panama; and the Mediterranean Sea has a less richly endowed biotic assemblage
than the Red Sea.) At least 150 species of plants and animals occurring in the eastern
Mediterranean have emigrated with the prevailing flow from the Red Sea through the Suez
Canal; only a very few have moved in the opposite direction. Of the 24 Red Sea fish species
that have moved into the Mediterranean, 11 are now commercially important. There is no
evidence of long-term adverse effects of this interchange.
The likelihood of the successful establishment of alien biota in the ecosystems of the
Caribbean or Pacific is a subject of debate not capable of being finally resolved within the
present state of knowledge. However, should future research indicate the need for a biotic
barrier across the canal in addition to tidal check gates, salinity or temperature barriers or
other bio-regulators could be installed. Such barriers were not included in conceptual
designs because the need for using them in addition to tidal checks has not been established.
As they are presently understood, these barriers appear to be technically feasible, although
their operating costs could be extremely high. Admitting fresh water into the canal between
the tidal checks has been proposed. It would come from streams which otherwise would be
diverted. Proposals also have been made for raising the water’s temperature, using waste heat
from power plants. The combination of heating and dilution should be more effective than
either acting alone. In any case, the success of any method adopted would depend on the
effectiveness of the tidal gates in restricting flows, since heating or diluting an unobstructed
interoceanic canal sufficiently to establish an effective biotic barrier appears economically
infeasible at this time. Other methods such as bubble screens, sonic barriers and electric and
magnetic fields have been suggested and may merit investigation in the future.
The ecological consequences of the movement of marine organisms are unknown at the
present time. Marine biologists are not in full agreement on this subject; their predictions
range from disaster to possibly beneficial results. All share the belief that further research is
needed. Because of this divergence of views, the Commission engaged Battelle Memorial
Institute to study the problem. A summary of its report?® is at Inclosure D. Its principal
findings were:
— No firm evidence has been found to support any predictions of massive migrations
from one ocean to another, followed by widespread competition and extinction of
large numbers of species.
— Differences in environmental conditions on the two sides of the isthmus and the
prior occupancy of similar niches by related or analagous species constitute
V-122
significant deterrents to the establishment of those species which may manage to
get through a canal.
— The Pacific species most likely to become established along the Caribbean shore are
those of estuarine and other shallow water habitats.
— Improvements in the precision and reliability of ecological predictions would
require a comprehensive long-term program of well-coordinated studies in physical
oceanography, marine ecology and basic biology in the seas and estuaries adjacent
to the isthmus.
Regardless of how the question of harm from biotic mixing may eventually be resolved,
there is general agreement that the estuaries at either end of a sea-level canal would be
altered considerably. There would be silting, diverted currents, and turbulence created by
ships. Breakwaters and jetties built to provide protection for ships and to reduce
maintenance dredging would also inhibit littoral drift. Near-shore biota would be affected
strongly by these changes and some might not adapt. The great length of shoreline available,
however, suggests that no species would be threatened with extinction. The greatest impact
would be felt in the Atrato estuary; yet even there, the vast extent of the estuary provides
assurance that its environmental values would not be destroyed by a canal.
It appears that, for the most part, the ecological impact of sea-level canal construction
on its local area would be minor in magnitude and extent. The great expanse of undeveloped
land, the abundance of tropical life, and the hot, humid climate would tend to overwhelm
terrestrial ecological disturbances in short order. A major possible exception is the effect of
opening up of a passageway which would allow marine life access between the oceans. The
possibility of dire consequences has been raised but not proven. Limited study indicates that
risks are small; however, many experts disagree. More study is required.
Gatun Lake: Lockage water supply limits the Panama Canal’s ultimate capacity. It is
possible to increase available supplies by pumping seawater into Gatun Lake. If this were
done, and lockage water could not be recycled, Gatun Lake would tend to become brackish
and some existing plant and animal species might disappear. Additionally, a variety of
estuarine organisms adapted to low salinities might become established. Ecological surveys
conducted for the Commission identified many species of fish occupying near-shore marine
habitats and extending their ranges up freshwater rivers. These and other organisms would
be candidates for establishment in the lake.
The Atrato lowlands: The construction of the canal, diversion channels and spoil
disposal in the Atrato flood plains in northwestern Colombia would be expected to produce
significant changes in the ecology of the flood plain and associated estuaries. Extensive
diversion channels on both sides of the canal would be excavated to accommodate the flows
of the Salaqui, Cacarica and Atrato Rivers. Spoil disposal in the area would be behind levees
and would raise periodically flooded areas several feet above sea level. The high organic
content of the hydraulic spoil would aid its rapid revegetation to brush and small trees or its
conversion to agricultural uses.
The extensive water diversions, flood control and filled land would alter the hydrologic
and physical characteristics of much of the Atrato estuary. Changes in the frequency, depth
V-123
and duration of flooding would alter (probably reduce) the nutrient and biotic contribution
of the wetlands to the coastal region. Flora and fauna dependent on these supplies would
be affected.
V-124
PART II — EVALUATION OF ROUTES
Salient features of eight potentially feasible routes were examined to select those
which, from an engineering standpoint, are the most promising. Conceptual designs and
detailed cost estimates for the routes thus selected are included in Part IV.
Cost estimates have been based on specified methods of excavation. The methods
chosen were considered to be the least costly for each route. The adoption of any particular
method does not imply that other methods would not be equally practicable.
Although the quality of data varies widely between routes, it is adequate to permit a
comparison of their feasibility and costs.
CHAPTER 11
ROUTE 15 — PANAMA CANAL ZONE LOCK CANAL
Route 15, an improved lock canal route along the alinement of the Panama Canal, was
considered for the sole purpose of establishing a standard against which the various sea-level
alternatives could be measured. Several lock canal plans which have been proposed for
modernizing and expanding the existing canal are described in this chapter. A detailed
discussion of these plans is presented in Appendix 9.
Accuracy of estimates: The data available for an engineering feasibility study of the
various Route 15 proposals are excellent. The climatic, hydrologic, and geologic records of
the Canal Zone area extend back nearly 100 years. Exploration and excavation done in
connection with maintenance and cut widening of the canal have resulted in detailed
geologic data along its most critical reaches. Cost estimates for the lock canal are considered
to be reliable.
Existing canal: (Figure 11-1.) The Panama Canal runs generally in a northwesterly
direction from Balboa on the Pacific coast to Cristobal on the Atlantic. The Miraflores
Locks, a double-lift twin-lock structure which raises vessels 54 feet from the level of the
Pacific Ocean to Miraflores Lake, are located about 6 miles inland from the Pacific. Pedro
Miguel Locks, a single-lift twin-lock structure at the other end of this 1-mile-long lake, raise
vessels to the level of Gatun Lake at elevation 85 feet.* From these locks the canal passes
directly into Gaillard Cut, which extends for 8 miles through the Continental Divide. For 23
*The lake’s elevation is regulated between elevations 82 and 87 feet. Its nominal elevation is 85 feet.
V-125
>
Fi
CARIBBEAN |
SEA @y
AREA OF
COVERAGE
C.ALUR.1.B BoE AN Sb. A
SE
(0 SN
LIMON.
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SCALE IN MILES
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PANAMA CANAL
THE CANAL ZONE AND VICINITY
SCALE IN MILES
0 5
or
DEPTH IN FATHOMS
V-126 FIGUR
miles from the cut’s north end near Gamboa, the canal follows an irregular course through
Gatun Lake to avoid islands and peninsulas. At the north end of the lake are the Gatun
Locks, triple-lift twin-locks which lower vessels to sea level about 2 miles inland from Limon
Bay. The total length of the Panama Canal, including approaches, is 48 miles.* The 12 lock
chambers are 1,000 feet long, 110 feet wide and have limiting depths of 40 feet over the
sills. The minimum navigation prism is 500 feet wide by 42 feet deep, with about 3
additional feet of overdepth. The existing facilities accommodate ships up to about 65,000
dwt. In Fiscal Year 1970 the Panama Canal transited 15,523 large ships. A program of
improvements by the Panama Canal Company is expected to increase the transit capacity to
26,800 ships per year when required.
Third Locks Plan: The 1938 Third Locks Plan,’ as subsequently modified, calls for
construction of one additional lane of 140- by 1,200- by 50-foot locks adjacent to each
existing set. The new locks would pass 105,000-dwt vessels and would increase the canal’s
annual transit capacity to about 35,000 ships. The existing locks would continue in use and
Gatun Lake would remain at an average elevation of 85 feet. Details of this plan are shown
in Figure 11-2. The 1964 Report estimated the cost of the Third Locks Plan to be $635
million ($800 million at 1970 price levels).
Terminal Lake Plan: The Terminal Lake Plan, considered first in the design of the
existing canal, was proposed again in 1943. As described in 1947, it calls for
abandoning Pedro Miguel Locks, raising Miraflores Locks, and constructing one lane of large
locks at both Miraflores and Gatun, capable of handling 110,000-dwt ships. Execution of
this plan would increase the annual transit capacity to about 35,000 ships. The added locks
would be 200- by 1,500- by 50-feet. Raising Miraflores Lake would provide an anchorage
area above the Miraflores locks, reducing navigation hazards at the Pacific end of the
Gaillard Cut. Operational efficiency would be increased by consolidating the Pacific locks.
The existing two-lane locks at Gatun and Miraflores would continue in operation, and Gatun
Lake would remain at its present level. Details of the plan are shown in Figure 11-3. The
1964 Report estimated the cost of this plan to be $946 million ($1.1 billion at 1970 price
levels).
Terminal Lake Plan variations: A number of variations in the Terminal Lake Plan have
been proposed†Typical of such proposals is that described in H.R. 3792 and S. 2228,
91st Congress, Second Session. These bills call for abandoning the Pedro Miguel Locks and
appear to require replacement of the locks at Gatun and Miraflores with two lanes of locks
140 feet wide and 1,200 feet long, having a minimum depth of 45 feet of water over the
sills. They would accommodate ships of 80,000 to 110,000 dwt, depending on the level of
*For larger vessels, present approaches would have to be extended, increasing the total length to 56 miles for 150,000 dwt
vessels.
{The bills as written are not specific on the number of lanes of locks to be provided. They include cost limitations which
indicate that there could not be more than two lanes; however, the figures on page 183 of House Document 474, 89th
Congress, 2d Session, which illustrate the plan from which these bills derive, show three lanes of locks. In view of the cost
limitation imposed by the language of the bills, discussion in this study of Terminal Lake Plan variations relates to 2 lanes
unless otherwise indicated.
V-127
CARIBBEAN |
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CAR PB BEA Nae A
AREA OF
| COVERAGE )
Ts
APPROACH CHANNEL
ve DEEPEN TO EL. —50.0
gS
18 ~~
Li WN
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LOCATION MAP COLOMBI
SCALE IN MILES
*LAGARTO a
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7 GATUN DAM cy GATUN LOCK
/ iy UM
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EXISTING’ 3
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NEW MIRAFLORES LOCKS
DP ACE TOE OC
y NOTE: New locks single lane 140’ x 1200' x 50’ @ min. Gatun Lake el 82"
THIRD LOCKS PLAN
THE CANAL ZONE AND VICINITY
V-128 5 as " i 10 FIGURE 11-2
Sees
DEPTH IN FATHOMS
=
CARIBBEAN
Cee) eRe ACN SORA pe
AREA OF
a ees
APPROACH CHANNEL
DEEPEN TO EL. —55.0
LI J
BA COLON Zi LOCATION MAP COLOMBIA
7 SCALE IN MILES
J. /
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TERMINAL LAKE PLAN
THE CANAL ZONE AND VICINITY
SCALE IN MILES
FIGURE 11-3 5 0 5 10 V-129
es
DEPTH IN FATHOMS
Gatun Lake. The lake, now maintained between elevations 82 and 87 feet, would be
regulated between 82 and 92 feet, requiring modification of the dam and spillway at Gatun.
A terminal lake at Gatun Lake level would be formed above the new Miraflores Locks,
improving conditions for navigation. Raising the level of the lakes would obviate the need
for major excavation. Details of these proposals are shown in Figure 11-4. Transit capacity
would be approximately equal to that of the existing canal after planned improvements. The
bills proposing these variations include $850 million for construction; however, if 3 lanes of
new locks were provided at each end to increase annual transits to about 35,000,
construction costs would be about $1.4 billion.
Deep Draft Lock Canal Plan: A plan* incorporating the most desirable features of
previously proposed lock canal plans was developed during the current studies. To meet
criteria applied in this study, the locks were designed to accommodate 150,000-dwt ships
and flatter excavation slopes were assumed than those of earlier lock canal plans. The new
plan calls for adding a lane of triple-lift locks to the existing 2 lanes at Gatun and
constructing a separate lane of triple-lift locks at Miraflores to raise 150,000-dwt ships into a
bypass around Pedro Miguel at the level of Gatun Lake. Details of the plan are shown in
Figure 11-5. It has the advantage of permitting continued operation of all existing locks
throughout their useful lives. It would accommodate 35,000 transits per year. Its initial cost
would be about $1.5 billion. Additional costs would be incurred when the existing locks
could no longer be used economically and would have to be replaced. Replacement would
be accomplished with some interference to traffic but would consolidate all three lifts on
the Pacific side at Miraflores, raising Miraflores Lake to the level of Gatun Lake.
Construction: Construction systems for plans other than that for the Deep Draft Lock
Canal Plan were not analyzed in detail; however, except for the Terminal Lake Plan
variations, they probably would be similar to the system contemplated for the Deep Draft
Lock Canal. In the Terminal Lake Plan variations, almost all channel excavation would be
avoided by raising the level of Gatun Lake.
Construction effort involved in the Deep Draft Lock Canal Plan would be about evenly
divided between lock construction and channel excavation. The new locks would take
advantage of the Third Locks excavations made in 1940-1942. Channel excavation would be
accomplished mainly by dipper dredges and spoil would be removed in scows. Construction
would take about 10 years.
Problem areas: The 160- by 1450- by 65-foot locks and their gates would be especially
large and massive, but their design and construction are within the capabilities of existing
technology. To achieve expected capacity, a high speed filling and emptying system would
be required for these locks.
All lock canals have the inherent handicap of needing extremely large quantities of
lockage water. On Route 15 this requirement can be met by pumping ocean water into Gatun
Lake, or possibly by recirculating fresh water. The first method would render Gatun Lake
brackish, thus changing some ecological characteristics of the area, while the second would
involve unusual engineering problems. Both methods would entail costly pumping operations.
V-130
— RIBBEAN
AREA OF ae
| COVERAGE
Pee! os Bh AUN. iS BA
DEEPEN CHANNEL
PACIFIC OCEAN
LOCATION MAP 7 COLOMBIA
SCALE IN MILES a
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NOTE: New locks double lane 140' x 1200' x 45’ @min. Gatun Lake el 82’
S. 2228 AND H.R. 3792 (91 st CONGRESS) PLAN
THE CANAL ZONE AND VICINITY
|FIGURE 11-4 Se ae MES V-131
C—O
| DEPTH IN FATHOMS
2
RICA
CARIBBEAN ||
oo SEA “|
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Wy, AREA OF
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3 SCALE IN MILES
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NOTE: New locks single lane 160' x 1450’ x 65' for 150,000 DWT design @ min. Gatun Lake el 82’
DEEP DRAFT LOCK CANAL
THE CANAL ZONE AND VICINITY
Tae SCALE IN MILES . FIGURE 118
EE
DEPTH IN FATHOMS
Construction of any of these options would interfere with traffic through the Gaillard
Cut, Miraflores Lake, and Pedro Miguel and Miraflores Locks. The Terminal Lake Plan, in
particular, would reduce transiting capacity significantly during construction.
Areas of weak rock where extensive slides occurred during construction of the Panama
Canal would have to be excavated in deepening and widening the channel. Extreme care
would be required during excavation to avoid massive slides which might block the canal.
Any further increase in the capacity of a lock canal after construction would be
difficult. Larger locks would have to be provided either in addition to, or as replacements
for, at least 1 complete lane of locks at each end of the canal; additional widening of the
Gaillard Cut would be necessary. It may be possible, however, to capitalize on the
demonstrated ability of small ships to pass in the Gaillard Cut. This may allow capacity to
increase up to 40,000 transits per year, the estimated capacity of 3 lanes of locks, without
additional channel widening.
Except for the Terminal Lake Plan variation, all plans make at least some use of the
present lock structures. These locks were built at a time when concrete technology was in its
infancy. They are nearly 60 years old and, while the concrete has been tested and appears
to be in good condition, the remaining useful life of the locks cannot be predicted
accurately. The estimated cost of replacement is $800,000,000.*
The Terminal Lake Plan variation would raise the level of Gatun Lake. This would make
replacement of the existing locks necessary and would require raising Gatun Dam and
making major modifications in the spillway. Fluctuation of the lake level over a 10-foot
range would cause greater environmental changes than any of the other lock canal plans.
Except for the Deep Draft Lock Canal Plan, none of these plans meets present forecasts
of traffic demands after the year 2000, with respect to both ship size and annual transits. As
now conceived, the Deep Draft Lock Canal Plan could not accommodate the larger attack
aircraft carriers of the U.S. Navy; the locks would be too narrow to hold angle decked ships.
This limitation could be overcome by providing a lane of locks with very low lifts, but such
an arrangement would add significantly to the transit time of all ships using that lane, and
would increase construction and operating costs. A preferable solution might be to provide
wider locks; however, this also would increase costs, especially those for lockage water
supply. Construction costs of a lock canal which would accommodate large carriers are
estimated to be approximately $2.3 billion. Annual operating costs for such a canal would
be about $78 million at 35,000 transits per year.
Summary data: The characteristics of the Deep Draft Lock Canal Plan are given in
Table 11-1.
*The date of replacement cannot be predicted, but the year 2000 is being used in Annex III, Study of Canal Finance, as
the earliest probable date.
V-133
TABLE 11-1
CHARACTERISTICS OF ROUTE 15
Deep Draft Lock Canal Plan
Canal dimensions 500 ft x 65 ft (centerline depth 75 ft.)
Lock dimensions 160 ft x 1450 ft x 65 ft
Length of land cut 36 miles
Length of approaches 20 miles
Design vessel 150,000 dwt
Capacity 35,000 transits/yr. (25 hrs average TICW)
Construction time 10 years
Excavation volume 560,000,000 cu. yd.
Cost of new locks®@ $550,000,000
Excavation cost $570,000,000
Other facilities $120,000,000
Contingencies $190,000,000
EDS&AP $100,000,000
TOTAL CONSTRUCTION COST $1,530,000,000
Operation and maintenance:°
Fixed costs $51,000,000/year
Variable costs $580/transit
8Cost for a Route 15 option with locks which would accommodate a modern attack aircraft
carrier is estimated at $2.3 billion.
bEngineering, design, supervision, and administration.
Cif the deep draft locks were operated as an adjunct to the Panama Canal Company, the
Company’s fixed operation and maintenance costs would be increased $13 million a year and
variable operation and maintenance would amount to $1,600 per transit for transits over
26,800 a year. Of the $1,600, $800 is for pumping locakge water.
V-134
Supporting
facilities
Existing harbor
facilities
Harbor
potential
Approaches/
coasts
Tidal
currents
Routes of
communication
Terrain
Geology
Flood control
and river
diversion
Local
development
TABLE 11-1
CHARACTERISTICS OF ROUTE 15 (Cont'd)
Favorable
Excellent facilities exist in the Canal
Zone and in the metropolitan area of
the Republic of Panama.
Excellent facilities exist in the Canal
Zone in Limon Bay and at Balboa.
Low-lying areas close to the ends
of the alinement could be dredged
to provide more anchorage.
Only very low currents exist in the
sea-level sections.
The Canal Zone and metropolitan
Panama provide excellent communi-
cations facilities; including a railroad,
transisthmian and coastwise roads,
airfields and water access through
the existing canal.
Construction could utilize the present
canal alinement and the Third Locks
excavations.
The geology is well documented.
No additional stream diversion
would be necessary.
The affected area already supports
interoceanic canal commerce, and
should accommodate construction
without any unusual stresses.
V-135
Unfavorable
Existing facilities are not deep
enough to accommodate vessels
of 150,000 dwt.
All protected areas available for
expansion require dredging.
Approaches are relatively long.
No choice available to transit
ships with following or against
breasting currents.
Known areas of weak rock would
require flat slopes and extreme
care to avoid risks of slides blocking
the canal during excavation.
Construction
features
Environmental
impact
Expansion
possibilities
Miscellaneous
TABLE 11-1
CHARACTERISTICS OF ROUTE 15 (Cont'd)
Favorable
Access is very easy. The common
labor supply is plentiful. A good
data base exists to support design.
Presence of locks presents a
substantial barrier to interoceanic
biota transfer. Overall environ-
mental impact would be the
least of all canal alinements con-
sidered.
Construction would be in territory
now under U.S. administration.
V-136
Unfavorable
There are risks of slides which
might block canal traffic. Tight
traffic control would be required
to minimize interference between
dumping scows and canal traffic.
Locks and gates would be massive
structures requiring special attention
If ocean water pumping is re-
quired, Gatun Lake would be-
come brackish and interoceanic
transfer of biota would increase.
Spoil disposal in Gatun Lake
may affect the ecology adversely.
Another lane of locks and widening
of the Gaillard Cut for two-lane
traffic would be required. Further
expansion on this alinement would
be very costly.
Lockage water for transits much over
15,000/year would have to be
provided by pumping sea water
or recirculating lake water.
Operation and maintenance costs
for a lock canal are inherently
higher than those of a sea-level
canal. Plans would not accom-
modate large attack aircraft
carriers. Capacity of the present
canal would be reduced during
several months of the construction
period.
CHAPTER 12
ROUTE 5 - NICARAGUA LOCK CANAL
Route 5 was considered only as a lock canal option. It was studied to determine
whether the best lock canal alternatives might lie along some other route than Route 15. A
more detailed discussion of Route 5 is presented in Appendix 11.
Accuracy of estimates: Analysis of Route 5 was based almost entirely on designs made
in connection with the canal studies of 1931 and 1947,8-'? topographic mapping
performed in 1966 by the Inter American Geodetic Survey and Army Map Service, and a
brief field reconnaissance made in 1969. Only a conceptual study was made of this
alternative and estimates of its costs are considerably less accurate than those for other
routes.
Route 5 trace: (See Figure 12-1.) The Pacific terminus of Route 5 is near the village of
Brito, 10 miles northwest of San Juan del Sur. The trace follows the Rio Grande Valley 5
miles inland to Miramar, where twin triple-lift locks would raise ships to the level of Lake
Nicaragua which would be maintained between elevations of 105 and 110 feet. The
alinement continues up the Rio Grande Valley, crosses the Continental Divide at an
elevation of about 200 feet, and enters Lake Nicaragua 15 miles inland from the Pacific
Ocean. After a 70-mile-long reach across the lake, the land cut would begin again at San
Carlos where Lake Nicaragua drains into the San Juan River. The trace generally follows this
river for about 55 miles to its confluence with the San Carlos River where it bends eastward
to pass through a series of low hills. These hills culminate in the so-called East Divide which
the trace traverses at a peak elevation of nearly 400 feet. On the Caribbean side of the East
Divide a second set of locks would provide the transition to sea level. From this location the
trace follows the valley of the Deseado River, continuing northeast for 14 miles through a
deltaic swamp to enter the Caribbean Sea about 4 miles north of San Juan del Norte
(Greytown). The Pacific approach is about 1 mile in length, that on the Atlantic about 3
miles. The total length of the route is 177 miles, including approaches. Except for Lake
Nicaragua and a narrow, highly-developed strip lying west of it, the region through which
the trace passes is covered by tropical forest in which the few inhabitants practice
slash-and-burn agriculture. A centerline profile of Route 5 is shown in Figure 12-2.
Construction: The most significant construction features of Route 5 would be
triple-lift, double-lane locks and extensive facilities to impound the San Juan River. The
locks, capable of carrying a 150,000-dwt tanker, would have dimensions of 160 by 1,450 by
65 feet. Although the height and width of the locks would require the use of large lock gates
V-137
NICARAGUA
AREA OF
COVERAGE
CARIBBEAN SEA |
LOCATION MAP
SCALE IN MILES
0 100
CORINTO 85 MI.
LAKE NICARAGUA
ee CONCEPCION
e 2 ISLA DE OMETEPE
PACIFIC
; mS os
"ROUTE 5 z
NICARAGUA-COSTA RICA BORDER AREA
;
SCALE IN MILES ;
V-138 ee ee FIGURE 12
DEPTHS IN FATHOMS
LAKE
NICARAGUA
DESEADO
SAN JUAN *
DEL NORTE «Sf
INTERNATIONAL
BOUNDARY
PACIFIC
COSTA RICA ee
EAST DIVIDE
OCEAN
PLAN LOCKS
800
EAST
ti 600 CONTINENTAL DIVIDE
Ww
u DIVIDE EAST DIVIDE
LOCKS (3 LIFTS)
ee MIRAMAR LOCKS
E SES) LAKE NICARAGUA
az 200 | PACIFIC EL. 110
— SIDE V.
Ww
4 ene TE pe ES
CHANNEL BOTTOM—~
-200
0 20 40 60 80 100 120 140 160 180
DISTANCE — MILES
PROFILE
14
23 MILES_|24 MILE 87 MILES 25 MILES_|MILES
(SINGLE |(2-LANE) (SINGLE LANE) (2-LANE) |(SINGLE
LANE) LANE)
MIRAMAR LOCKS EAST DIVIDE LOCKS
173 MILES
LAND CUT
1 MILE 3 MILE
APPROACH CHANNEL APPROACH CHANNEL
(2-LANE) (2-LANE)
CANAL CONFIGURATION
ROUTE 5
FIGURE 12-2
V-139
and machinery, their design and construction are within the capabilities of current
technology. A high-speed filling and emptying system would be needed to speed vessels
through the locks. Impoundment of the San Juan River would reduce excavation requirements
and possibly provide passing sections.
Since most streams in the area flow into Lake Nicaragua, requirements for river diversion
would be relatively small. It would not be difficult to regulate lake levels and the extensive
drainage area tributary to the lake would supply ample lockage water.
Because of the lack of development in this region, most facilities required for
constructing and operating the canal would have to be provided. These would include an
all-weather transisthmian highway; harbors; airfields; administrative, maintenance, and resi-
dential buildings; lateral roads, and highway bridges. The limited protection offered by both
coastlines and the poor foundation conditions on the Atlantic might dictate that harbor
facilities be located inland.
A lock canal on Route 5 would take about 12 years to build and would cost
approximately $6 billion. The nearly 2 billion cubic yards of excavation involved in the
project account for a large part of this cost.
Problem areas: The length of the canal prevents transits within the 20-hour average
TICW criteria. At rated capacity—25,000 annual transits—it is estimated that the average
TICW would be 36 hours. To achieve even these sub-standard conditions, two passing
sections must be installed—one immediately inland from the East Divide locks and the other
at the west end of Lake Nicaragua.
Provisions must also be made for potential seismic effects associated with the volcanic
nature of the region.
The dimensions of Route 5 would not accommodate a 250,000-dwt ship under any
conditions. The locks would not pass a modern attack aircraft carrier. To provide one lane
with locks big enough to carry these large ships would cost an additional $600 million.
Summary data: The characteristics of Route 5 are summarized in Table 12-1.
V-140
TABLE 12-1
CHARACTERISTICS OF ROUTE 5
Canal dimensions 500 ft x 65 ft? (centerline depth 75 ft)
Lock dimensions 160 ft x 1,450 ft x 65 ft
Length of land cut 173 miles
Length of approaches 4 miles
Design vessel 150,000 dwt
Capacity 25,000 transits/yr (36 hrs. average TICW)
Construction time 12 years
Excavation volume 1,700,000,000 cu. yd.
Cost of locks $1,200,000,000°
Excavation cost $2,200,000,000
Other facilities $1,300,000,000
Contingencies $ 600,000,000
EDS&Ad $ 406,000,000
TOTAL CONSTRUCTION COST $5 ,700,000,000
Operation and maintenance:
Fixed cost $7 1,000,000/year
Variable cost $1,240/transit
4)ncludes 49 miles of two-lane channel necessary to obtain capacity.
Di ength of canal prohibits operation within 20 hour TICW standard.
includes the Conchuda Dam on the San Juan River.
dEngineering, design, supervision, and administration.
Favorable Unfavorable
Supporting The small city of Granada at the No facilities exist with substantial
facilities north end of Lake Nicaragua could _ capability of supporting con-
provide limited support. struction and operation of an
interoceanic canal.
Harbors Limited small boat facilities exist No deep draft facilities exist in
at San Juan del Sur. the vicinity of the route.
Harbor Good potential exists at Salinas Potential sites on Atlantic are
potential Bay, 35 miles southeast of Brito. hampered by regular coastline
and marshy terrain.
V-141
Approaches/
coasts
Tidal
currents
Routes of
communication
Terrain
Geology
Flood control
and river
diversion
Construction
features
TABLE 12-1
CHARACTERISTICS OF ROUTE 5 (Cont'd)
Favorable
Deep water is close in on both
coasts. Salinas Bay offers protection
on the Pacific.
Locks would prevent currents from
interfering with navigation.
Waterborne traffic exists on Lake
Nicaragua and the San Juan River.
The Pan American Highway crosses
the alinement between Brito and
Lake Nicaragua.
Spoil disposal areas are readily
available. Maximum cut would
be only 400 feet above sea level.
Topography of the San Juan River
Valley is suitable for an extension
of the level of Lake Nicaragua
over 50 miles downstream by
construction of a dam.
Flood diversion problems would
be minimized by use of Lake
Nicaragua as a summit pool. Lake
provides adequate water for
operations.
Access would be relatively easy
by Lake Nicaragua and the San
Juan Valley.
V-142
Unfavorable
No protected areas exist along
this stretch of the Atlantic
coast.
No choice available to transit
ships with following or against
breasting currents.
No transisthmian road or rail-
road and no roads exist on the
Atlantic side; no interior roads
lead east from Lake Nicaragua.
Managua has the nearest all-
weather airfields.
There are two mountain ranges
to traverse. Much of the land cut
on the Atlantic side is heavily
forested. The Atlantic coastal
region is a swampy alluvial
plain. Only the divide region is
relatively cleared.
Very little is known of sub-
surface conditions. This is an
area of volcanic activity.
A large impounding dam would
be required to bring the San Juan
River up to summit pool eleva-
tion.
The locks and lock gates would
be massive structures requiring
special attention. The level of
Lake Nicaragua must be main-
tained.
Environmental
impact
Expansion
possibilities
Miscellaneous
TABLE 12-1
CHARACTERISTICS OF ROUTE 5 (Cont'd)
Favorable Unfavorable
A large choice of spoil disposal
areas exists. A small number of
inhabitants would be displaced.
Detrimental environmental im-
pact would be minimized.
No technical or construction The need for additional locks and
problems are foreseen that would bypasses would make expansion
be different from those encountered very expensive.
in the original construction.
The area east of Lake Nicaragua
is almost completely undeveloped.
There are scattered patches of sub-
sistence agriculture in the jungle.
Population density is about five
people per square mile.
Of the routes studied this is the To take advantage of the exist-
shortest lock canal route from ing San Juan River Valley, the
New York to San Francisco. route would be relatively angular.
V-143
WHGRND
One of the larger ships that use the Panama Canal. Note Large ships such as this require tugs to assist them in
the small clearance between the ship and the lock wall. passing through the Panama Canal.
The Gaillard being widened using a large pipeline dredge.
The Panama Canal Company is undertaking a program to increase the capacity of the canal. A major item, widening the
Gaillard Cut from 300 to 500 feet, was completed in 1970.
V-144
CHAPTER 13
ROUTE 8-NICARAGUA-COSTA RICA BORDER REGION SEA-LEVEL CANAL
Route 8 was considered for both all-conventionally excavated and all-nuclear excavated
sea-level options. Two different alinements were studied, permitting full realization of the
capabilities of each method of excavation. A more detailed discussion of this route is
included in Appendix 11.
Accuracy of estimates: Analysis of Route 8 was based largely on data assembled in
connection with previous studies,!°>!? supplemented by subsequent topographic surveys.
Geologic conditions along this route are poorly defined. Because of the lack of data on the
route, the analysis of alternatives for its construction, and their costs, were not refined to
the degree achieved for other routes.
Route 8 trace: (See Figure 13-1.) The nuclear route starts in Salinas Bay on the Pacific
Ocean near the Nicaragua-Costa Rica border. Its alinement runs northeastward 12 miles
across the Continental Divide and down the Sapoa River Valley. Five miles from Lake
Nicaragua it bends eastward, then southeastward, paralleling the southern shore of the lake
approximately 5 miles inland. It passes through the marshy lower edge (average elevation
110 feet) of the San Carlos Plains on the Costa Rican side of the international boundary.
Beyond the southern tip of the lake the route turns east, crossing the San Juan River south
of the village of El Castillo. Continuing eastward, it passes through a 30-mile reach of the
eastern cordillera before dropping into the Indio River delta on the Atlantic coast. The total
length of this alinement is 140 miles; the peak elevation at its western end is about 1,000
feet, while that on the East Divide is nearly 900 feet. Except in the Sapoa Valley, the region
through which the trace passes is undeveloped and heavily forested; its few inhabitants
practice subsistence agriculture.
The conventionally excavated canal alinement also starts in Salinas Bay but follows a
small valley up to the Continental Divide which is only 3 miles from the coast. After
crossing the divide, it turns abruptly northward to follow the Sapoa River toward Lake
Nicaragua. Two miles from the lake, the trace turns eastward about 120 degrees to parallel
the shoreline at an average distance of 2 miles. This portion of the route generally follows
the international boundary on the Nicaraguan side, intersecting the San Juan River 10 miles
downstream from the southeastern tip of Lake Nicaragua. From that point the trace follows
the San Juan River to a point about 5 miles above its confluence with the San Carlos River.
There it turns generally eastward in a 25-mile cut through the eastern cordillera. After
passing through a marshy coastal plain for 10 miles, the alinement enters the Caribbean
between the mouths of the Indio and the San Juan Rivers. Its total length is 176 miles,
V-145
NICARAGUA
AREA OF
COVERAGE
CARIBBEAN SEA |
LOCATION MAP
ue IN pe
CORINTO 85 MI
LAKE NICARAGUA
I ages: CONCEPCION
ad ISLA DE OMETEPE
SAN JUA
DEL SUR > \.
RIO GRANDE-\ 3
SALINAS
BAY
(
%
SAN CARLOS PLAINS
v1 =~ CONVENTIONAL 4
PACIFIC 5) 5 Ps j r
* : ee a wes j i ( i |
NN
ROUTE 8
NICARAGUA-COSTA RICA BORDER AREA
SCALE IN MILES
V-146 10 0 10 20 30 FIGURE 13-1
= ee ee
DEPTHS IN FATHOMS
including approaches. The peak elevation on the Continental Divide is approximately 750
feet; on the East Divide it is about 400 feet.
Profiles of both alinements, based on maps prepared by the Inter American Geodetic
Survey and the Army Map Service, are shown in Figures 13-2 and 13-3.
Construction: The nuclear alinement would take approximately 12 years to build and
would cost more than $5 billion. Its excavation would require about 740 separate nuclear
explosive charges with yields ranging from 200 kilotons to 3 megatons. These would be
detonated in groups; nearly 80 separate detonations would be required. The largest total
yield for a single detonation, the Continental Divide cut, would be 12.5 megatons.
Construction of the conventionally excavated sea-level canal, with a by-pass to provide
the required transit capacity, would take about 18 years and would cost approximately $11
billion. The principal element in this cost would be excavation, estimated to be about 7
billion cubic yards. Most of this would be accomplished by open-pit mining techniques using
rail haul of spoil to lateral disposal areas.
Both Route 8 options require regulation of the San Juan River. This would involve a
substantial engineering effort, including damming the river below San Carlos to regulate
Lake Nicaragua and providing appropriate inlet works with energy dissipation structures at
the junction of the canal and the river. Streams flowing northward across the San Carlos
Plains into Lake Nicaragua would be intercepted and their flows brought into the canal
through inlet structures.
Because of the lack of development in this area, all facilities required for building and
operating a canal would have to be provided. These would include an all-weather
transisthmian highway, port facilities, airfields, administrative and residential facilities,
lateral roads, and highway bridges.
Problem areas: Nuclear excavation would involve an extremely costly safety program.
The minimum exclusion area would cover more than 20,000 square miles, including about a
third of Costa Rica (see Figure 13-4). Nearly 675,000 people would have to be evacuated
during nuclear detonation periods. The large area specified for evacuation was dictated by
highly conservative airblast considerations. The area would be significantly smaller and
much less costly to evacuate if radioactivity and seismic effects were the controlling factors,
but the total number of people involved would still be much larger here than on any other
nuclear route considered in this study.
Route 8 Conventional is longer than any other route selected for this study, and it has
the greatest angularity, two features which would adversely affect operation of the
completed canal. Its length also would tend to increase the need for passing sections to
obtain additional transiting capacity.
The extensive river systems crossing these alinements and the need to maintain the
elevation of Lake Nicaragua present major problems. The drainage area of the lake covers
10,000 square miles, from which nearly all runoff flows down the San Juan River to the
Caribbean Sea. In periods of peak flow the San Juan River discharges 70,000 cfs, most of
which would have to be diverted from the canal. A 60-mile dike constructed from excavated
spoil might be required south of Lake Nicaragua to ensure separation of the lake waters
from the canal and to sustain the desired lake elevation.
V-147
NICARAGUA
LAKE
NICARAGUA op
>
ROUTE 8 NUCLEAR
SAN JUAN ———— ae ;
DEL SUR ae = RN Seg %\ DESEADO RIVER
SALINAS
BAY
eooeeeee®
oe SAN JUAN DEL
INTERNATIONAL
BOUNDARY
PACIFIC
OCEAN
COSTA RICA
PLAN
CONTINENTAL EAST
1000 DIVIDE DIVIDE
800
600
400
RIO SAN JUAN
ATLANTIC
SIDE
200 [ PACIFIC
SIDE
ELEVATION — FEET
CHANNEL BOTTOM
-200 ! sfisbs wee] 1 Te \ I
0 20 40 60 80 100 120 140
PROFILE
CONVENTIONAL
CONVENTIONAL EXCAVATION
EXCAVATION aN
| NUCLEAR EXCAVATION | |
133 Miles
er LAND CUT
4 Mile 3 Mile
APPROACH CHANNEL APPROACH CHANNEL
(2-Lane) (2-Lane)
CANAL CONFIGURATION
ROUTE 8 NUCLEAR
FIGURE 13-2
V-148
NICARAGUA
ROUTE 8 CONVENTIONAL
SAN JUAN
DEL SUR
DEL NORTE@
ee £3
INTERNATIONAL
BOUNDARY
PACIFIC COSTA RICA
OCEAN
PLAN oes
PACIFIC .
1000
SIDE ATLANTIC
SIDE
800 CONTINENTAL
DIVIDE
600
EAST
400 DIVIDE
zZ
>
>
zZ
=?
wn
2
oc
200
ELEVATION — FEET
CHANNEL BOTTOM
-200
0 20 40 60 80 100 120 140 160 180
DISTANCE — MILES
PROFILE
70 MILES 29 MILES 70 MILES
(SINGLE LANE) (BY PASS) (SINGLE LANE)
169 MILES
‘ LAND CUT
4 MILE 3 MILE
APPROACH CHANNEL APPROACH CHANNEL
(2-LANE) (2-LANE)
CANAL CONFIGURATION
ROUTE 8 CONVENTIONAL
FIGURE 13-3
V-149
Hl
LAKE MANAGUA
MANAGUA NICARAGUA
GRANADA ©
LEGEND
ROUTE 8 NUCLEAR EXCLUSION AREA
SCALE IN MILES
20 Oo 20 40
Sl
FIGURE 13-4
V-150
cS
BLUEFIELDS e
)
“SAN JOSE
ee ell
Knowledge of the geology at the canal cut depths is limited. The presence of volcanic
activity and the flat terrain south of Lake Nicaragua suggest that there may be weak
materials such as have been found on other routes where extensive subsurface investigations
have been made. If present, these materials would increase construction costs.
The terrain, which is almost completely covered by dense jungle and extensive marshy
areas, would hinder construction. Access to the route by means other than water is
extremely limited except at its western end. The canal would cut off the San Carlos Plains
from the lake. Access to construction sites might be complicated by political problems
growing out of the proximity of the trace to the international boundary in this reach.
Summary data: The characteristics of the nuclear alinement are summarized in Table
13-1; those of the conventionally constructed alinement are in Table 13-2.
V-151
TABLE 13-1
CHARACTERISTICS OF ROUTE 8 NUCLEAR?
Canal dimensions 1,000 x 75 feet (minimum)
Length of land cut 133 miles
Length of approaches 7 miles
Design vessel 250,000 dwt
Capacity 200,000 transits/yr (20 hrs average TICW)
Construction time 12 years
Excavation cost $ 850,000,000
Other facilities $3,350,000,000
Contingencies $ 630,000,000
EDS&AS $ 340,000,000
TOTAL CONSTRUCTION COST $5,170,000,000
Operation and maintenance:
Fixed costs $50,000,000/year
Variable costs $1,100/transit
4Based on nuclear excavation throughout the length of the route, except for the ocean
approaches which would be 1400 by 85 feet.
includes evacuation costs.
CEngineering, design, supervision and administration.
Favorable Unfavorable
The small city of Granada on the None exist capable of providing
north end of Lake Nicaragua could _— substantial support to construction
provide limited support. and operation of the interoceanic
canal.
Harbors Limited small boat facilities exist No deep draft facilities exist in
at San Juan del Sur. the vicinity of the route.
Harbor Good potential exists in Salinas Potential sites on the Atlantic are
potential Bay. limited by regular coastline and
marshy terrain.
Approaches/ Deep water lies close in on both No protected areas exist along
coasts coasts. Salinas Bay offers pro- this stretch of the Atlantic coast.
tection on the Pacific.
V-152
TABLE 13-1
CHARACTERISTICS OF ROUTE 8 NUCLEAR (Cont'd)
Favorable
Tidal Currents in the canal would reach
currents two knots only occasionally.
Routes Waterborne traffic operates on Lake
of communica- Nicaragua and the San Juan River.
tion The Pan American Highway runs
along the divide 5 miles from the
Pacific terminus.
Terrain
Geology Surface geology along the San Juan
River indicates conditions favorable
for nuclear excavation.
Flood control
and river diversion
Construction
features
Accessibility to the reach skirting
Lake Nicaragua is relatively easy.
Environmental
impact
V-153
Unfavorable
No transisthmian road or rail-
road exists. There are no roads
on the Atlantic side or in the
interior to the upper San Juan
Valley. No all-weather airfields
exist nearer than San Jose and
Managua.
The heavily jungled central plain
with extensive marshy areas and
the low-lying Atlantic coastal
plain may present problems.
Maximum elevation is 1,000
feet.
Knowledge of subsurface geology
is limited. The critical area south
of Lake Nicaragua is very un-
certain. This is an area of volcanic
activity.
Extensive flood control facilities
are required for the San Juan
River and streams flowing north
into Lake Nicaragua and the San
Juan River.
The level of Lake Nicaragua must
be maintained. This may be crit-
ical if the alluvial material south
of the lake does not remain stable
under ground motion from re-
peated nuclear explosions.
The large area of the San Carlos
Plains would be cut off from
access to the lake.
Exclusion
area
Expansion
possibilities
Local
development
TABLE 13-1
CHARACTERISTICS OF ROUTE 8 NUCLEAR (Cont'd)
Favorable Unfavorable
Airblast effects and close-in fallout
should be contained within ex-
clusion area.
Expansion is not considered
necessary.
The region is basically undeveloped.
Patches of subsistence agriculture
are scattered throughout the jungle
where the population density is
about five people per square mile.
This is a short route from New York
Airblast may cause damage in
San Jose and Managua, and the
adjacent metropolitan areas of
Costa Rica and Nicaragua.
Exclusion area is 150-200 miles
wide and covers an area of 21,000
sq. mi. in which 675,000 people
live.
Ranching is found on cleared land
in the divide area where the popu-
lation density is about 25 people
per square mile. A few small villages
are located in the area between
Salinas Bay and Lake Nicaragua.
Construction takes place in two
to San Francisco compared to others different countries.
considered.
V-154
Canal dimensions
Length of land cut
Length of gepiedeies
Design vessel
Capacity
Construction time
Excavation volume
Excavation cost
Other facilities
Contingencies
EDS&AS
TABLE 13-2
CHARACTERISTICS OF ROUTE 8 CONVENTIONAL?
550 x 75 ft (85 ft maximum depth)
169 miles
7 miles
150,000 dwt
35,000 transits/yr (30 hrs. average TICW)
18 years
7,000,000,000 cubic yards
$8,000,000,000
$1,200,000,000
$1,100,000,000
$ 700,000,000
TOTAL CONSTRUCTION COST $11,000,000,000
Operation and maintenance:
Fixed costs
Variable costs
$50,000,000/year
$1,200/transit
4Based on a design channel with a 29-mile bypass and 1400- by 85-foot ocean approaches.
ba 250,000-dwt ship could transit under all expected currents.
CEngineering, design, supervision and administration.
Supporting
facilities
Harbors
Harbor
potential
Approaches/
coasts
Tidal
currents
Favorable
The small city of Granada on the
north end of Lake Nicaragua could
provide limited support.
Limited small boat facilities exist
at San Juan del Sur.
Good potential exists in Salinas
Bay.
Deep water lies close in on both
coasts. Salinas Bay offers protection
on the Pacific.
No currents over 1% knots would
occur in the canal.
V-155
Unfavorable
None exist capable of providing
substantial support to construc-
tion and operation of an inter-
oceanic canal.
No deep draft facilities exist
in the vicinity of the route.
Potential sites on the Atlantic are
limited by regular coastline and
marshy terrain.
No protected areas exist along
this stretch of the Atlantic coast.
TABLE 13-2
CHARACTERISTICS OF ROUTE 8 CONVENTIONAL (Cont'd)
Favorable Unfavorable
Routes of Waterborne traffic operates on Lake No transisthmian road or rail-
communication Nicaragua and the San Juan River. road exists. There are no roads
The Pan American Highway runs on the Atlantic side or in the
along the divide 5 miles from the interior to the upper San Juan
Pacific terminus. Valley. No all-weather airfields
exist nearer than San Jose and
Managua.
Two mountain ranges cut across
the alinement. A heavily jungled
central plain with extensive
marshy areas inhibits access.
The Atlantic coastal plain is
marshy and heavily forested.
Maximum elevation is 750 feet.
Spoil disposal areas are available.
Geology Surface geology along the San Juan Knowledge of subsurface geology
River indicates conditions favorable _ is limited. This is an area of
for canal construction. volcanic activity.
Flood control Extensive flood control facilities
and river diversion are required for the San Juan
River and streams flowing north
into Lake Nicaragua and into
the San Juan River,
Construction Accessibility to the reach The level of Lake Nicaragua must
features skirting Lake Nicaragua is relatively be maintained. This may present
easy. a problem because of the alluvial
area south of the lake.
Environmental A very small number of inhabitants A large area of the San Carlos
impact would be displaced. Plains would be cut off from
access to the lake.
Expansion No physical problems are foreseen Expansion would be relatively
possibilities which would not be encountered costly because of the length of
in the original construction. the route and the deep divide
cuts necessary.
V-156
TABLE 13-2
CHARACTERISTICS OF ROUTE 8 CONVENTIONAL (Cont'd)
Favorable Unfavorable
Local The region is basically undeveloped. Ranching is found on cleared land
development Patches of subsistence agriculture in the divide area where the popu-
are scattered throughout the jungle _ lation density is about 25 people
where the population density is per square mile. A few small
about 5 people per square mile. villages are located in the area be-
tween Salinas Bay and the lake.
Miscellaneous This isa short route from New York This isavery angular alinement.
to San Francisco compared to Construction would take place
others considered. in two different countries.
V-157
= me ~~,
6 ae : Be ee
<> 3 a ca
. i > - =a
. a eo L _ = Se ‘ -
Rain gauges and stream flow installations such as this Geologists examine rock outcroppings along the Truando
were constructed along both Routes 17 and 25. River near Teresita.
Much of the data collection activity was centered about the streams along Routes 17 and 25. Native waterborne
transportation was used extensively.
V-158
CHAPTER 14
ROUTE 10—ISTHMUS OF PANAMA SEA-LEVEL CANAL
Route 10 was considered for conventional excavation only. Its proximity to the
Panama Canal and built-up areas in and adjacent to the Canal Zone makes it impractical to
employ nuclear excavation techniques in its construction. Various options were investigated,
including several different navigation prisms, operating the canal with and without a bypass,
and operating it with and without tidal checks.
Accuracy of estimates: Adequate data are available for assessing the engineering
feasibility of constructing a canal along this route. Climatic, hydrologic, and geologic
records for the Canal Zone area have been kept for nearly 100 years.* The climatic and
hydrologic records generally can be extrapolated to Route 10, and onsite geologic
investigations were conducted to answer specific questions relating to this route. In general,
the accuracy of Route 10 estimates is considered to be good.
Route 10 trace: (See Figure 14-1.) The Pacific terminus of Route 10 is at the town of
Puerto Caimito at the mouth of the Caimito River. The trace follows the river
northwestward for 5 miles, crossing the Pan American Highway about 3 miles northeast of
La Chorrera. It continues to the north through generally open, rolling terrain; crosses the
Continental Divide through the Chorrera Gap; and parallels the Pescado River until it
reaches an arm of Gatun Lake at La Laguna. Turning in a more westerly direction, the trace
continues over relatively flat terrain and crosses the Trinidad Arm of Gatun Lake, to a point
about 3 miles southwest of the town of Escobal. From there it runs northwesterly through
low ridges which become more open toward the coast. It enters the Atlantic at the town of
Lagarto. The Atlantic approach channel would be only two miles long; however, that on the
Pacific would require 15 miles of underwater excavation, extending past Taboga Island. The
total length of this alinement, including approaches, is 53 miles; its peak elevation is about
400 feet. Lumbering operations in the area are gradually converting the jungle into pasture
land. A few farms are found near the Pacific end. A route profile is shown in Figure 14.2.
Construction: Most of the excavation along Route 10 would employ open-pit mining
techniques, using rail haul for spoil disposal. Truck haul would be used at higher elevations,
while dredges would excavate the approach channels and the layer of muck at the bottom of
Gatun Lake. Barrier dams would maintain Gatun Lake at levels needed for operating the
Panama Canal during construction, at the same time permitting excavating at controlled
water levels or in the dry. Muck underlying the sites of these dams would be removed by
V-159
CAR JI BBE AN |S EA
AREA OF
COVERAGE
LOCATION MAP
SCALE IN MILES
100
ston
GATUN LOCK
GATU
(So
es —
om
+ TIGER ae L
opall / SAS iu a
a
c BOHIO eel
FRUQLES
ip #
|
p >
1
a LA CHORRERA \
& PUERTO CAIMITO
BATS wa
( oe
TABOGA ISLAND \ \ Cpeeoemme ISLAND SS
A~o) oe
f , No
SS 2
PA CTR CO CE
ROUTE 10
THE CANAL ZONE AND VICINITY
V-160 . oe IN UES - FIGURE 14-1
rs
DEPTH IN FATHOMS
hydraulic dredging, after which spoil from dry excavation would be brought in to construct
the embankments.
Diversion of streams on Route 10 would be relatively simple because their drainage
basins are small. Most of them would be diverted into the Caribbean Sea; the Caimito River
would be the only stream of consequence to discharge into the canal.
Because construction and operation of Route 10 could be supported largely from
existing facilities in the Canal Zone and the metropolitan area of Panama, supporting
construction requirements would be minimal. Required items would include a transisthmian
highway, crossing Gatun Lake over the barrier dams; breakwaters on the Caribbean coast; a
jetty on the Pacific; and a high-level bridge over the canal.
Reduction of tidal currents would require the use of tidal checks. Under a 2-knot
current limitation, expansion beyond the minimum design capacity would require
construction of a bypass. The alinement is well suited for a centrally-located bypass,
excavated through the Gatun Lake reach.
The design channel would cost about $2.88 billion and take 14 years to construct,
including 2 years for preconstruction design. Inclusion of a centrally-located bypass would
raise construction costs to about $3.3 billion. Subsequent expansion of the canal’s capacity
by providing for two-way traffic would be relatively simple; however, it would require large
cuts through high ground.
Problem areas: The most critical engineering problems involve the geology of the divide
area which consists, in large part, of a hard basalt cap overlying much weaker materials. Soft
rocks, similar in strength to those along the Panama Canal, are found at the depth of the
navigation channel. These highly altered volcanic rocks have the undesirable properties of
clay shales. Slope angles required for stability in the divide area would have to be verified
through detailed investigations or modified by observation during construction.
In the design of the barrier dams, particular attention must be given to the poor
foundation material in Gatun Lake and to the stability of fill material in embankments.
Throughout the construction period, the lake would have to be maintained at its present
level; thus, hydraulic heads exceeding 150 feet would exist when dry excavation reaches the
bottom of the cut. Although failure of these dams is highly unlikely, it would have
disastrous effects not only on construction of the sea-level canal but on the operation and
safety of the Panama Canal as well.
The relatively short length of this alinement and the high Pacific tides would cause
currents greater than 2 knots in an unrestricted channel for short periods of almost every
tidal cycle. Unless experience proves that ships can transit safely in currents faster than 2
knots, continuous use of tidal checks would be required. This would limit capacity to
38,000 transits per year.
Physical conditions at either end of the alinement are not favorable to shipping. On the
Atlantic side, breakwaters would be necessary to overcome the lack of natural protection.
The Pacific offers more protection but the approach channel would have to be dredged
about 15 miles into the Gulf of Panama.
Summary data: Characteristics of Route 10 are summarized in Table 14-1.
V-161
PUERTO 2
CAIMITO'~4
CARIBBEAN SEA
ATLANTIC PACIFIC
SIDE CONTINENTAL Se
DIVIDE
RIO PESCADO
200
100
ELEVATION—FEET
RIO CAIMITO
-100
CHANNEL BOTTOM——
0 10 20 30 40 50
DISTANCE MILES
PROFILE
11 MILES
(SINGLE LANE)
25 MILES
(SINGLE LANE)
2 MILE
APPROACH
CH E
(2-LANE)
15 MILE
APPROACH CHANNEL
(2-LANE)
CANAL CONFIGURATION
ROUTE 10
FIGURE 14-2
V-162
a
—————
Canal dimensions
Length of land cut
Length of peer
Design vessel
Capacity®
Construction time
Excavation volume
Excavation cost
Other facilities
Contingencies
EDS&A
TABLE 14-1
CHARACTERISTICS OF ROUTE 10?
550 x 75 ft (85 ft. maximum depth)
36 miles
17 miles
150,000 dwt
38,000 transits/yr (20 hrs average TICW)
14 years (includes 2 years for design)
1,870,000,000 cu. yd.
$2,030,000,000
§ 370,000,000
$ 290,000,000
$ 190,000,000
TOTAL CONSTRUCTION COST $2,880,000,000
Operation and maintenance:
Fixed costs
Variable costs
$35,000,000/year
$640/transit
4Based on a 36-mile design channel and 1400-by 85-foot ocean approaches. Additional
cost of a 14-mile bypass constructed after the canal has been placed in operation would
be $460,000,000, which would allow 56,000 transits a year.
250,000 dwt ships could transit in favorable currents.
Based on operation of tidal checks to limit current to a maximum of 2 knots.
Engineering, design, supervision, and administration.
Favorable Unfavorable
Excellent facilities are available
in the Canal Zone and in the metro-
politan areas of the Republic of
Panama.
Excellent facilities exist in the Canal Existing facilities would need
Zone in Limon Bay and at Balboa. deepening and enlarging to hold
large vessels.
In the immediate area of the
alinement, harbor potential is
very poor on the Atlantic and
poor on the Pacific.
V-163
Favorable Unfavorable
Approaches/
coasts
Tidal
currents
Routes of
communication
Flood control
and river
diversion
Construction
features
TABLE 14-1
CHARACTERISTICS OF ROUTE 10 (Cont'd)
Deep water is close in on
the Atlantic side.
The Canal Zone and metropolitan
Panama provide excellent commun-
ications facilities, including a trans-
isthmian railroad, transisthmian
and coastwise roads, airfields and
water access through the lock canal.
The alinement crosses the most
cleared and even terrain of all
routes except those in the Canal
Zone.
Atlantic highlands are composed
of rock of intermediate quality
which combines relative ease of
excavation with relatively good
stability.
This route has the smallest trib-
utary drainage area of any route and
the smallest requirement for flood
diversion facilities.
The supply of common labor is
good and access is relatively
good.
V-164
Approach on the Pacific is 15
miles long; approach on the
Atlantic has no natural protection.
Currents would exceed 2 knots
on almost every tidal cycle. Con-
tinuous use of tidal gates may be
required.
Gatun Lake would inhibit trans-
isthmian overland traffic along
the alinement until the barrier
dams are finished. There is no
transisthmian road in the imme-
diate vicinity of the alinement.
Uncleared terrain is covered
with thick tropical forest.
Intercalated hard rocks and weak
clayey materials in the divide cut
present problems in designing
stable slopes. Geologic condi-
tions vary greatly throughout
the alinement.
Permanent barrier dams will be
required across two arms of Gatun
Lake.
Gatun Lake barrier dams would re-
quire very flat slopes because of
questionable fill material and the
consequences of dam failure.
Tidal gates would be massive struc-
tures requiring special attention.
Environmental
Miscellaneous
TABLE 14-1
CHARACTERISTICS OF ROUTE 10 (Cont'd)
Favorable Unfavorable
Local impact should be minimal.
The entire region is based on a
canal economy.
Construction of a bypass would
be fairly simple.
The jungle is being cleared for
ranching, making access easier.
Lagarto and Puerto Caimito support
small fishing fleets. The general area
already supports interoceanic canal
commerce, and should accommodate
construction of a sea-level canal
with little stress.
Route 10 offers the easiest route
to operate in conjunction with the
present lock canal.
V-165
A strip about 10 miles wide
between Route 10 and the
present canal would be isolated.
Expansion to a two-lane configura-
tion would require cuts through
higher elevations than the original
alinement.
Population density varies from
5 to 25 persons per square mile.
Land is being developed now;
land acquisition costs will
rise.
The barrier dams would reduce
inflow to Gatun Lake which
would affect supply of lockage
water for the present canal
during and after construction.
V-166
CHAPTER 15
ROUTE 14—PANAMA CANAL ZONE SEA-LEVEL CANAL
Route 14 was considered for conventional excavation only; its proximity to the existing
canal makes nuclear excavation infeasible. There are two different alinements along this
route: Route 14 Combined (14C) and Route 14 Separate (14S). Route 14C would make
maximum use of the existing divide cut, thereby reducing excavation volume; while Route
14S would pass through a new and separate divide cut, thereby reducing interference with
traffic in the Panama Canal. Both alternatives were investigated in detail.
Accuracy of estimates: The data available for an engineering feasibility study of Route
14 are extensive and of good quality. Climatic, hydrologic, and geologic records in the
immediate area go back nearly 100 years. The Panama Canal Company has had extensive
experience in dealing with slope stability problems. Consequently, estimates of excavation
volumes for Route 14 are considered more accurate than those of other routes.
Route 14C trace: (See Figure 15-1.) On the Pacific side, Route 14C coincides with the
approaches to the present lock canal until it reaches the Pacific Third Locks cut where it
changes direction slightly to pass southwest of Miraflores and Pedro Miguel Locks.
Following generally the alinement of the Panama Canal northeast of Cerro Gordo, it
continues toward Gatun Lake, keeping southwest of the present canal until it reaches the
Darien peninsula. Turning slightly northward then, it passes Barro Colorado Island on the
east, touching the end of Bohio Peninsula. There the trace turns to the north across Gatun
Lake and enters the Atlantic Third Locks cut. From that point, it follows the present canal
into the Caribbean. The Pacific approach channel is 13 miles long; that on the Atlantic is 8.
The total length of this alinement, including approaches, is 54 miles; the highest elevation
along the centerline is about 400 feet.
Route 14S trace: (See Figure 15-1.) The trace of Route 148 is identical to that of
Route 14C, except for an 8-mile reach through the Continental Divide. The routes diverge at
the Pacific Third Locks cut. Route 14S runs % to 1 mile southwest of Route 14C, passing
north of Cerro Gordo and rejoining Route 14C east of the Mandinga River. Its length,
including approaches is 54 miles; its peak elevation along the centerline is 450 feet. Figures
15-2 and 15-3 show centerline profiles of the routes.
Construction: Each Route 14 option would require two principal excavation efforts:
dredging across Gatun Lake and cutting through the divide. Across Gatun Lake, where the
alinements coincide, deep dredging techniques would be employed, using hydraulic dredges
V-167
CARIB BE ANY gSeE A
AREA OF
COVERAGE
LOCATION MAP
SCALE IN MILES
0
AW,
{Xe
4
a .
sh LA CHORRERA
aC. PUERTO CAIMITO »
PANAMA CITY
s
\ ‘
SEPARATE
DIVIDE CUT) ~_
0
~ —\ A
NBQ)\ Jr
TABOGA ISLAND | ) \ \/TABOGUILLA ISLAND
GNU)
( \ ee) yt
PA CTELC KOC eee
ROUTE 14
THE CANAL ZONE AND VICINITY
V-168 >» eS ee FIGURE 15-
rr
DEPTH IN FATHOMS
for soft muck, dipper dredges for rock at shallow depths and barge-mounted draglines for
rock below elevation +15 feet. Construction plugs would keep the lake at its present level
(+85 feet) to sustain operations in the Panama Canal while this work is being accomplished.
Scows would move excavated material to underwater spoil areas in the lake. Much of this
material would be used as fill in the permanent flood control dams on either side of the
alinement. Where practicable, shovels and large dump trucks would be employed to excavate
the higher elevations. As the final step of the construction phase, Gatun Lake would be
drawn down and the sea-level canal placed in operation. Pools behind the flood control
dams would be maintained at an elevation of 55 feet.
Through the Route 14C divide reach, material above the level of Gatun Lake would be
excavated in the dry using shovels, with truck and rail haul to disposal areas. This would
remove about 70 percent of the divide material. The dredging techniques employed in
Gatun Lake also would be used to excavate the remaining material, with spoil hauled in
scows to the lake. Along the Route 14S alinement, about 80 percent of the material could
be removed by open-pit mining/rail haul methods; the remainder would be excavated by
dipper dredges and hauled in scows to Gatun Lake and the Pacific Ocean.
Except for the Chagres River on Route 14C, flood control and stream diversion on
either route involves no serious problems. The two major reservoirs remaining in the Gatun
Lake basin would be discharged into the Caribbean, one through the spillway at Gatun, the
other through a new outlet east of Cristobal. The Chagres River would be diverted to the
Pacific through the existing canal if Route 14S were built; however, if the canal lay along
Route 14C, the flow of the Chagres would have to be carried in the navigation channel.
Smaller streams in either case would be channeled into the canal through inlet structures.
Costs of facilities to support construction and operation of Routes 14C and 14S are
affected by the existing state of development within the Canal Zone. The necessary harbors,
communications, and utilities already exist and can be used as they are. Other facilities such
as channels and anchorages might have to be modified. In general, however, mobilization for
construction on this route would be easier than on any other route.
The minimum project for either Route 14 alinement would have two-lane (1,400 feet)
approaches and a 33-mile single-lane section cut to design channel dimensions. Tidal checks
would be installed to maintain current velocities at 2 knots or less. This configuration would
provide more than the initial design capacity.
On Route 14C such a canal would cost approximately $2.93 billion and would take
about 13 years to design and construct. Along Route 14S its cost would be approximately
$3.04 billion; it would require nearly 16 years to complete. In either case, transiting
capacity could be increased by extending the two-lane Atlantic approach 9 miles across
Gatun Lake at an additional cost of about $430 million.
Problem areas: The geology of the divide reach is known to be poorly suited for deep
cuts. Route 14S was proposed as a means of lessening the possibility of slides blocking the
Panama Canal for long periods during construction of a sea-level canal. The risk of severe
blockage would be reduced at the price of greater excavation volumes and longer
construction time. Even so, there would remain some risk of major slides into the present
canal.
V-169
ELEVATION—FEET
MIRAFLORES °;
LOCKS s
ATLANTIC
PACIFIC
SIDE
CONTINENTAL SIDE
DIVIDE
500
400
300
200
MIRAFLORES
neg LAKE EL. 54
oa] GATUN THIRD LOCKS CUT
-100
0 10 20
DISTANCE — MILES
30 40 50
PROFILE
fi CHECKS
APPROACH
HANNEL
8 MILES 33 MILES 13 MILES
(2 LANE) (2 LANE)
CANAL CONFIGURATION
ROUTE 14 COMBINED
FIGURE 15-2
V-170
PEDRO_M
ATE ED Oe oun
g~ we ea
2) bs Oe iy y
Fes mMIRAFLORES :
C WW
Z VF LAKE. o/ Kinapioness
3S uN
ae 3 SANA rine
: Seniesa (AL ZONE *
cote E14 GAM a \
a Av we Pe ZONE = ——_
- > en Bf py ae
"379 7
S eg g) nee
“ z GN S SRC.
> er A Sipe 3/ : of
Su CN oC
© /
PLAN
ATLANTIC a PACIFIC
SIDE 5 SIDE
500 Za CONTINENTAL
=~ 5 w2 DIVIDE
a; o Zz
400 i
= Seas 3
oO wo
f 300 Si wie
Ww o -4W
w ze FG
1 200 em a3
2 =
°
— >
= 100 =
< 5
io
4 U a
1a]
-100
° 10 20
DISTANCE - MILES
PROFILE
30 40 50
Leagan CHECKS Sey
-
APPROACH SEMICES CoE APPROACH
CHANNEL SINGLE LANE CHANNEL
8 MILES
(2 LANE)
SiS MS EsS! 13 MILES
(2 LANE)
CANAL CONFIGURATION
ROUTE 14 SEPARATE
FIGURE 15-3
V-171
Conversion of the canal’s operations from locks to sea level would be complex and
difficult and would take between 1 and 3 months, during which time all Panama Canal
traffic would stop. This transition would require removing the construction plugs
maintaining Gatun Lake, thus draining the canal to sea level and lowering the remainder of
Gatun Lake to approximately elevation 55 feet. The rapid drawdown of water levels would
develop seepage pressures which might lead to serious slope stability problems, particularly
on Route 14C.
The poor foundation material underlying the flood control dams and the possible
instability of their fill material would be countered by making them massive and by building
them on a blanket of select material. Construction of these dams in water depths up to 80
feet would demand special care. Because the Gatun Lake reach would be excavated by
dredging, the hydraulic head on these dams would not be as great as that developed on the
Route 10 barrier dams.
Strict traffic control would be required during construction on both Route 14
alinements, but particularly on Route 14C where the sea-level canal would generally follow
the existing canal through the divide. Bottom dump scows would ply between dredging
areas in the cut and spoil areas in Gatun Lake. The proposed alinements would cross the
present navigation channel twice in the lake and would coincide with the existing canal in
both approaches to Gatun Lake. Consequently, construction traffic would present hazards
to and interfere with transiting vessels at a time when the Panama Canal would be
approaching the limit of its traffic capacity.
The topography of Route 14 does not lend itself readily to a bypass. However,
increased capacity could be achieved by widening the channel in from the Atlantic Coast
and across Gatun Lake to two lanes and reducing the length of the single-lane section.
Currents would exceed 2 knots on almost every tidal cycle and would exceed 4 knots
on 35 percent of the cycles. Unless experience proves that ships can transit safely in currents
faster than 2 knots, continuous use of tidal checks would be required.
Summary data: The characteristics of Routes 14C and 14S are summarized in Tables
15-1 and 15-2, respectively.
V-172
TABLE 15-1
CHARACTERISTICS OF ROUTE 14C?
Canal dimensions 550 x 75 ft (85 ft maximum depth)
Length of land cut 33 miles
Length of gpRIGaaiEs 21 miles
Design vessel 150,000 dwt
Capacity® 39,000 transits/yr (20 hrs average TICW)
Construction time 13 years (includes 2 years for design)
Excavation volume 1,600,000,000 cubic yards
Excavation cost $2,120,000,000
Other facilities $ 330,000,000
Contingencies $ 290,000,000
EDS&AG $ 190,000,000
TOTAL CONSTRUCTION COST $2,930,000,000
Operation and maintenance:
Fixed costs $33,000,000/year
Variable costs $640/transit
“Based on a 33-mile design channel and 1400- by 85-foot approaches. Reducing the single
lane length to 24 miles would cost $430,000,000 more and increase transit capacity to
55 ,000/year.
b250,000 dwt ships could transit in favorable currents.
Based on operation of tidal checks to limit current to a maximum of 2 knots.
dengineering, design, supervision and administration.
Favorable Unfavorable
Supporting Excellent facilities exist in the Canal
facilities Zone and in the metropolitan areas of
the Republic of Panama.
Existing Excellent facilities exist in the Canal Existing facilities would need
harbor Zone in Limon Bay and at Balboa. deepening and enlargement to
facilities hold large vessels.
Harbor Low-lying areas along adjacent coasts All protected areas available
potential could be dredged to provide more for expansion require dredging.
anchorage and berthing.
Approaches/ Approaches are relatively long.
coasts
V-173
TABLE 15-1
CHARACTERISTICS OF ROUTE 14C (Cont'd)
Tidal
currents
Routes of
communication
Terrain
Geology
Flood control
and river diversion
Local
development
Favorable Unfavorable
Currents would exceed 2 knots
on almost every tidal cycle and
would exceed 4 knots on 35% of
the cycles. Continuous use of
tidal gates is likely.
The Canal Zone and metropolitan
Panama provide excellent commun-
ications facilities, including a
transisthmian railroad, trans-
isthmian and coastwise roads, airfields
and water access through the lock
canal.
The alinement generally follows the
lock canal alinement, with the benefit
of low elevations and cleared land.
Gatun Lake is the dominant feature.
Geology along Route 14 is the best | Known areas of weak rock would
known of all the routes. require flat slopes and extreme
care to avoid risks of slides
blocking the canal. Flood
control dams across Gatun Lake
would rest on poor material.
Sixteen miles of massive flood
control dams would be required
in Gatun Lake and lowering of th
the lake level would be required
during conversion. Chagres River
flows would have to drain into
the sea-level canal.
Land development in the construc-
tion area has been restricted. The
region already supports inter-
Oceanic canal commerce, and
should accommodate construction
of a sea-level canal with little stress.
V-174
TABLE 15-1
CHARACTERISTICS OF ROUTE 14C (Cont'd)
Favorable Unfavorable
Construction Access is relatively easy. The supply A slide which could block canal
features of common labor is plentiful. traffic for a long time is pos-
sible, especially during conver-
sion. This problem is more
critical on Route 14C than 14S.
Tight traffic control is essential to
minimize interference between
dumping scows and canal traffic.
This problem is also more serious
on Route 14C. Loss of Gatun
Lake must not be risked. Tidal
gates would be massive structures
requiring special attention.
Environmental More land would be opened for Spoil disposal in Gatun Lake and
impact possible development by lowering lowering of the lake level will
the lake level. The tropical en- adversely affect the lake’s
vironment would soon repair ecology.
damage caused by lake lowering.
Expansion Shortening the length of the one- Expansion to a 2-lane configura-
possibilities way reach would be fairly simple. tion would require deep cuts
through areas of known instability.
Miscellaneous Construction would take place Construction of this route would
within the Canal Zone. eliminate permanently the present
lock canal as an operable alter-
nate route.
V-175
TABLE 15-2
CHARACTERISTICS OF ROUTE 14S?
Canal dimensions 550 x 75 ft (85 ft maximum depth)
Length of land cut 33 miles
Length of ap piesce 21 miles
Design vessel 150,000 dwt
Capacity©® 39,000 transits/yr (20 hrs average TICW)
Construction time 16 years (includes 2 years for design)
Excavation volume 1,950,000,000 cubic yards
Excavation cost $2,210,000,000
Other facilities $ 330,000,000
Contingencies $ 300,000,000
EDS& AG $ 200,000,000
TOTAL CONSTRUCTION COST $3,040,000,000
Operation and maintenance:
Fixed costs $34,000,000/year
Variable costs $640/transit
“Based on a 33-mile design channel and 1400- by 85-foot approaches. Reducing the
single lane length to 24 miles would cost $430,000,000 more and increase transit
capacity to 55,000/year.
b950,000 dwt ships could transit in favorable currents.
CBased on operation of tidal checks to limit current to a maximum of 2 knots.
dEngineering, design, supervision and administration.
Favorable Unfavorable
Supporting Excellent facilities exist in the Canal
facilities Zone and in the metropolitan areas
of the Republic of Panama.
Existing Excellent facilities exist in the Canal Existing facilities would need
harbor Zone in Limon Bay and at Balboa. deepening and enlargement to
facilities hold larger vessels.
Harbor Low-lying areas along adjacent coasts All protected areas available
potential could be dredged to provide more for expansion require
anchorage and berthing. dredging.
Approaches/ Approaches are relatively long.
coasts
V-176
TABLE 15-2
CHARACTERISTICS OF ROUTE 14S (Cont'd)
Favorable Unfavorable
Tidal Currents would exceed 2 knots
currents on almost every tidal cycle and
would exceed 4 knots on 35%
of the cycles. Continuous use
of tidal gates is likely.
Routes of The Canal Zone and metropolitan
communication Panama provide excellent communic-
ations facilities, including a transis-
thmian railroad, transisthmian and
coastwise roads, airfields and water
access through the lock canal.
The alinement generally follows the
lock canal alinement except through
the divide reach. Elevations are gen-
erally low. The land is cleared and
mostly unused. Gatun Lake is the
dominant feature.
Terrain
Geology along Route 14 is the best Known areas of weak rock would
known of all the routes. The separate require flat slopes and care to
divide cut is not as well known as the avoid risk of slides blocking the
rest of the route. canal. Flood control dams across
Gatun Lake would rest on poor
materials.
Flood control Stream diversion requirements Sixteen miles of massive flood
and river diversion are minimal. control dams would be required
in Gatun Lake and lowering of
the lake would be required
during conversion.
Local Land development in the con-
development struction area has been restricted.
The region already supports inter-
Oceanic canal commerce, and
should accommodate construction
of a sea-level canal with little stress.
V-177
Environmental
impact
Expansion
possibilities
Miscellaneous
TABLE 15-2
CHARACTERISTICS OF ROUTE 14S (Cont'd)
Favorable
Unfavorable
Access is relatively easy. The supply A slide which could block canal
of common labor is plentiful.
More land would be opened for
possible development by lowering
of the lake level. The tropical en-
vironment would soon repair damage
caused by lake lowering. There
would be less spoil disposal in
Gatun Lake for Route 14S than
for Route 14C.
Construction would take place
within the Canal Zone.
V-178
traffic for a long time is pos-
sible. Tight traffic control is
necessary to minimize interference
between dumping scows and canal
traffic. Loss of Gatun Lake must
not be risked. Tidal gates would
be massive structures requiring
special attention.
Spoil disposal in Gatun Lake
and lowering of the lake level
will adversely affect the lake’s
ecology.
The topography does not lend
itself to incremental expansion.
Construction of this route would
eliminate permanently the present
lock canal as an operable alter-
nate route. The Route 14 options
pose a major hindrance to opera-
tions of the Panama Canal during
construction.
CHAPTER 16
ROUTE 17 — DARIEN ISTHMUS SEA-LEVEL CANAL
Route 17 was considered originally as an all-nuclear option. Its remoteness from major
population centers, together with its relatively short length and low elevations, made it
appear well suited for nuclear excavation. Adverse geologic conditions discovered in its
central reach during this study have caused reformulation of the original construction plan
to provide for excavation by a combination of conventional and nuclear techniques. A more
detailed discussion of Route 17 is presented in Appendix 12.
Accuracy of estimates: The investigative efforts previously described provided the data
needed to support conceptual designs and cost estimates for this route. In spite of a number
of deficiencies in this data base (lack of extended meteorologic and hydrologic records)
estimates for this route are considered adequate for purposes of comparison between
nuclear excavated routes.
Route 17 trace: (See Figure 16-1). The Pacific approach to Route 17 begins 28 miles
from shore, in the Gulf of San Miguel. From the shoreline, the alinement runs north
approximately 12 miles through the Pacific Hills. At the Sabana River it turns
northeastward and traverses the combined lowlands of the Sabana and Chucunaque valleys
for 20 miles. Turning further east, the alinement proceeds up the valley of the Morti River,
crosses the Continental Divide through Sasardi Pass and continues across the narrow
Atlantic coastal plain to the shoreline. It terminates in deep water approximately 2 miles
offshore just east of Sasardi Point. The total length of Route 17, including approaches, is 79
miles; the highest elevation along the centerline is approximately 1,000 feet. The region it
traverses is heavily forested and largely undeveloped. The centerline profile of the alinement
is shown in Figure 16-2.
Construction: Excavation plans for Route 17 call for the use of nuclear explosives
through the Pacific Hills and the Continental Divide. The presence of weak clay shales in the
Chucunaque Valley would require cuts with extremely flat side slopes, thus precluding the
use of nuclear excavation. This 20-mile reach, at an average elevation of slightly less than
200 feet, would require conventional excavation of about 1.6 billion cubic yards,
accomplished primarily by an open-pit mining/rail haul system.
In addition to excavating the main channel through the higher elevations, nuclear
explosives would be used to open several river diversion channels. The nuclear excavation
program would involve about 250 explosives ranging in yields from 100 kilotons to 3
megatons, with a total yield of approximately 120 megatons. They would be detonated in
V-179
COSTA
CARIBBEAN, oeaA RICA
\
CARIBBEAN SEA
i
oO
Io CANAL ZONE
sAsARDRSASARDI PT. S
\ pass a AREA OF
( (\CALEDONIA os ye
\ BAY ar
\ S
%
ae MAP z
x Ao IN am Me
ey COLOMBIA
ASANTA FE SS
i
3
%
e,
PALMA
a
DARIEN
HARBOR
~*~
GULF OF
SAN MIGUEL
~ GARACHINE
BAY
a
PACA EILC., OC EA ily,
2 TERESITA a ~
wr
nO qf
SALTOS
HIGHLANDS
HUMBOLDT BAY
LEGEND
D2 ici ean Excavation
(Gs CONVENTIONAL EXCAVATION
RIO CURICHE
>
SS
N
ROUTE 17
PANAMA-COLOMBIA BORDER AREA
SCALE IN MILES
V-180 5 0 5 10 15 20 25 30 35 FIGURE 16-1
DEPTHS IN FATHOMS
ROUTE 17
AGUA_FRIA
CLARITO
CHUCUNAQUE
SEA
ELEVATION — FEET
Punta
Sasardi
=
= a
& E
S c
oO & Tt
~ oS
g GULF OF SAN MIGUEL
~
~
Q
PLAN
ATLANTIC
SIDE
PACIFIC
1000 SIDE CONTINENTAL
DIVIDE
Fr 2A
5 Ee =
800 g 5 eo
$ S 5
PACIFIC HILLS = Oneia= S °
600 a ES & c 2
< oat Oo
< 5 S 2 N=
400 e 9g o Qf |o
oO o £} \c
é Ae
200 O ©
c
Vv NUCLEAR CONVENTIONAL NUCLEAR V.
0 == i EXCAVATION EXCAVATION EXCAVATION N=
en a
-200 CHANNEL BOTTOM
0 30 40 50 60 70
DISTANCE — MILES
PROFILE
TIDAL CHECKS _,f |
APPROACH
CHANNEL L| PACIFIC HILLS CHUCUNAQUE VALLEY CONTINENTAL DIVIDE
aeaee 12 Miles 20 Miles 17 Miles
(2 — LANE)
APPROACH CHANNEL
2 MILES (2 — LANE)
CANAL CONFIGURATION
ROUTE 17
FIGURE 16-2
V-181
about 30 groups with yields ranging from 800 kilotons to 11 megatons. Detonations would
be scheduled when meteorological conditions ensure that hazardous fallout would be
contained within the exclusion area and that any risk of long-range airblast damage would
be minimized. There would be two series, or passes, of detonations, the first lasting 13
months. This would be followed by second pass emplacement construction which would
require 16 months. Five more months would be required for the second pass. Conventional
excavation and construction of permanent facilities would begin after the second pass
detonations.
Route 17 would intercept the Sabana River and the upper reaches of the Chucunaque.
The Chucunaque would enter the canal through an inlet excavated by nuclear means, with a
spillway to dissipate the energy of a drop of approximately 100 feet. The Sabina River
would enter the canal at about sea level through a transition structure.
Because of the lack of development in the Darien region, all facilities required to support
construction and operation of the canal would have to be provided. These would include a
transisthmian highway and other roads, harbor facilities, an all-weather airfield, administra-
tive and residential facilities, and a ferry crossing of the canal for the Pan American
Highway.
Design and construction of a sea-level canal along Route 17, as described above, would
require about 16 years and cost about $3 billion.
Problem areas: The most significant problem area surrounding Route 17 is the present
uncertainty regarding the feasibility of nuclear excavation.
The clay shales encountered through the Chucunaque Valley present serious slope
stability problems, even if excavated by conventional means.
Tidal currents would attain a maximum velocity of 6.8 knots if tidal checks were not
used. Currents greater than 2 knots would occur at some time during all tidal cycles,
necessitating continual use of tidal checks.
The economy of the Darien region is inadequate to support construction of a sea-level
canal. The area is covered with heavy jungle and almost completely undeveloped. On the
Pacific side, Darien Harbor could be developed into a suitable facility; but early permanent
buildup of this area would be impracticable because it lies well within the nuclear exclusion
area. Adequate port facilities would be more difficult to construct along the less protected
Atlantic coast. The jungle terrain and heavy rainfall are not conducive to road construction.
Access to the alinement would be very limited until roads, ports and airfields were built.
Locally available skilled labor does not exist and common labor is in short supply.
A land exclusion area (Figure 16-3) would have to be evacuated prior to any nuclear
detonation and kept clear, perhaps for as long as 1 year after the last detonation. It would
include an area of 6,500 square miles from which approximately 43,000 inhabitants would
have to be evacuated. Radiological surveys would be conducted continuously during and
after detonation to determine when the area could be reoccupied. In some areas re-entry
could begin shortly after the last detonation; however, it would probably be more practical
to re-open the entire exclusion area, except for the immediate vicinity of the craters, at one
time 6 to 12 months after the last detonation. The exclusion area over the ocean would be
operative only for a short time, | to 2 days after each detonation.
V-182
In Panama City and other outlying built-up areas, there may be minor damage from
ground motion which would be generated by some of the larger nuclear detonations.
Summary data: The characteristics of Route 17 are summarized in Table 16-1.
V-183
oT
: ULF OF
SAN BLAS
TURBO
‘COLOMBIA
BAY
SAUTATA’
@GUAPA
@ RIO SUCIO
pio SUCIO
er
So
Go iae 5
> COLOMBIA
S
OF
PeAN ACMEA
kIO MURR}
GULF
OF
CUPICA
RIO ARQUIA
LEGEND
Exclusion from time of first detonation
until several months after final detonation.
Total exclusion period will cover 4 to 5 years.
Periodic exclusion (up to 48 hours) following
RE each detonation.
Ry BUENA VISTA ©
Ri? 2 S Vi
ROUTE 17 NUCLEAR EXCLUSION AREA
V-184
SCALE IN MILES
25 0 25
50 FIGURE 16-3
rr
TABLE 16-1
CHARACTERISTICS OF ROUTE 172
Canal dimensions See note a.
Length of land cut 49 miles
Length of gppiiaachies 30 miles
Design vessel 150,000 dwt
Capacity 42,000 transits/yr (20 hrs average TICW)
Construction time 16 years
Conventional excavation volume 1,600,000,000 cubic yards
Conventional excavation cost $1,560,000,000
Nuclear excavation cost $ 220,000,000
Other facilities $ 730,000,000
Contingencies $ 350,000,000
EDS&Aq $ 200,000,000
TOTAL CONSTRUCTION COST $3,060,000,000
Operation and maintenance:
Fixed costs $35 ,000,000/year
Variable costs $640/transit
4Based on a 20-mile long, centrally located, design channel; 1,000-foot wide nuclear
excavated sections at either end, and 1,400-foot wide ocean approaches.
b250,000 dwt ships could transit in favorable currents.
“Based on continuous operation of tidal checks to limit current to a maximum of 2 knots.
de ngineering, design, supervision, and administration.
Favorable Unfavorable
Supporting None exists capable of supporting
facilities construction and operation of an
interoceanic canal.
Harbors Limited berthing for small craft None exists capable of handling
exists in Darien Harbor at La Palma. deep draft vessels.
Harbor Good potential exists on the Pacific The Atlantic coast offers only
potential coast for deep draft vessels, after limited protection for harbors.
dredging.
Approaches/ Deep water is close in on the Atlantic. Intermittent sections of the 28-
coasts A large protected area is available mile approach channel through the
on the Pacific. Gulf of San Miguel would need
dredging.
V-185
Tidal
currents
Routes of
communication
Terrain
Geology
Flood control
and river
diversion
Construction
features
TABLE 16-1
CHARACTERISTICS OF ROUTE 17 (Cont'd)
Favorable Unfavorable
Spoil disposal areas are
readily available on this route.
Subsurface investigation indicates
materials at higher elevations prob-
ably would be amenable to nuclear
excavation.
V-186
Currents are the highest of all
routes. Tidal checks would be
in continuous use.
Access is the poorest of all
routes. These are no trans-
isthmian or coastal routes of
communications and no all-
weather airfields.
Two mountain ranges must be
traversed. The entire route is
heavily jungled. Maximum eleva-
tion is about 1,000 feet.
Subsurface geologic information
is limited compared to Routes 10
and 14. Clay shale materials in
the Chucunaque Valley would
require flat side slopes through-
out a 20-mile reach of the canal.
The flood control structures must
accommodate the large volume
of high silt content runoff from
the Chucunaque River and its
major tributaries.
Most conventional construction
would have to be postponed until
nuclear excavation is completed.
The clay shale in the Chucunaque
Valley would require very flat
side slopes and may cause slope
stability problems during con-
struction. The local labor
supply is extremely limited.
Tidal gates would be massive
structures requiring special
attention.
TABLE 16-1
CHARACTERISTICS OF ROUTE 17 (Cont'd)
Favorable Unfavorable
Environmental Population centers exist within
impact the exclusion area at La Palma,
the Pearl Islands and the Cuna
and Choco Indian settlements.
Nuclear Direct airblast effects and potent- Effects of ground motion might
effects ially harmful fallout would be con- —_ cause minor damage in Panama
tained within the exclusion area. City.
Exclusion The exclusion area is about 100
area miles wide and covers a land area
of about 6,500 square miles
in which approximately 43,000
persons live.
Expansion Nuclear excavated secticns would Expansion of the conventionally
possibilities not need to be expanded to carry excavated section in the Chucun-
2-lane traffic. aque Valley would be costly
because of the relatively high
average elevation.
Local The population density is only Highly communal Cuna Indians
development 6 persons per square mile. Develop- _ living on islands off the Atlantic
ment is minimal. Inhabitants are coast must be evacuated. Lack of
engaged in fishing on the Pacific development requires all support
coast. A ranching economy is for construction to come from
just beginning. outside the Darien region.
V-187
20
oo
a
>
CHAPTER 17
ROUTE 23 — PANAMA-COLOMBIA SEA-LEVEL CANAL
Route 23 was considered for excavation by either conventional or nuclear means or by
a combination of both techniques. Its remote location makes this route appear well suited
for nuclear excavation; its low divide elevation is favorable for conventional excavation. A
more detailed discussion of Route 23 is contained in Appendix 14.
Accuracy of estimates: The data base for Route 23 is among the poorest for the routes
considered in this study. Geographic, geologic, hydrologic, and topographic data for the
Tuira Valley and the adjacent divide region are extremely limited. Since consideration of
this route was proposed after field investigations in the Isthmus had been completed, no
new information was gathered to supplement existing data which are extremely meager
(e.g., estimates of the minimum divide elevation range from 330 to 550 feet).* Subsurface
geologic information required for reliable estimates of nuclear cratering effects, slope
stability, and excavation costs is not available. Field data were extrapolated from Routes 17
and 25 to estimate construction costs of the Route 23 alternatives. Because of the weakness
of its data base, analysis of this route was not carried to the same degree of refinement as
that achieved for other routes.
Route 23 trace: (See Figure 17-1). The Pacific approach of Route 23 begins 24 miles from
shore in the Gulf of San Miguel. To avoid excessive angularity as it turns into Darien Harbor,
the trace cuts through the narrow peninsula on which La Palma is situated. It then follows
the Tuira Valley southeastward past El Real. The terrain in this reach is low, swampy and
densely overgrown. As it continues southeastward, the trace generally parallels the proposed
route for the Pan American Highway, gradually rising until it reaches the divide pass at
about 450 feet elevation. In this area, the terrain is heavily forested and sparsely populated.
Beyond the divide, the trace follows the Cacarica River as it descends into the alluvial flood
plain of the Atrato River near Sautata. From that point it parallels the low-lying Atrato to
its mouth in Candelaria Bay, 3 miles from deep water. The total length of the route,
including approaches, is 146 miles. Although there are several small towns and villages along
Route 23, the region is essentially undeveloped. The Atrato Valley supports some sawmill
operations, and limited subsistence agriculture is conducted in the Tuira Valley. Figure 17-2
shows the assumed profile of Route 23.
*Recent data furnished by Dr. Mauricio Obregon, President of the Choco Development Corporation, Bogota, Colombia,
supports elevation 450 feet used to prepare estimates for this study.
V-189
CARIBBEAN SEA
AREA OF
COVERAGE
LOCATION MAP
SCALE IN MILES
GULF OF
SAN MIGUEL
| \NERCUA
LTERESITA ¢
iD
425 i :
»
pv
Rioâ€
SALTOS
HUMBOLDT BAY HIGHLANDS
LEGEND
2D yu cican excavation
CONVENTIONAL EXCAVATION
RIO CURICHE
N
N
ROUTE 23
PANAMA-COLOMBIA BORDER AREA
SCALE IN MILES
V-190 5 0 5 10 15 20 2 30 35 FIGURE 1
DEPTHS IN FATHOMS
2
CARIBBEAN SEA
GULF OF
PANAMA
ans Up,
%
os
QO a
x : ROUTE 23
Q ws):
oy E
2
wi
a
600 — PACIFIC Z< ATLANTIC
SIDE =o CONTINENTAL SIDE
S SD DIVIDE
wi 400 oS ze
rm 9 wi
| wel fe S|
cc ay
2 = tq
S 200 e) a
& ° «
if co NUCLEAR
Ww 0 CONVENTIONAL LON CONVENTIONAL
EXCAVATION EXCAVATION
CHANNEL BOTTOM
-200
0 20 40 60 80 100 120 140 160
DISTANCE — MILES
PROFILE
DISTANCE IN MILES
APPROACH
CHANNEL
ZaMIEES 119 MILES
(2-LANE) LAND CUT APPROACH
CHANNEL
3 MILES wy,
CANAL CONFIGURATION (2-LANE)
ROUTE 23
(WITH NUCLEAR DIVIDE CUT)
FIGURE 17-2
V-191
Construction: If nuclear excavation were used through the divide region, hydraulic
dredging of the Tuira and Atrato reaches and river diversion channels would begin during
the early phases of nuclear operations. Dredging operations within the exclusion area would
be halted whenever required for radiological safety. Approximately 15 nuclear detonations
averaging about 5 megatons each would be used, with the largest individual explosive yield
being no more than 1 megaton. Throughout the 2-year nuclear operations period,
detonations would be scheduled when atmospheric conditions would direct fallout toward
the Pacific coast so that the exclusion area would not include La Palma. On completion of
nuclear operations, full-time dredging would be resumed. At the same time, support facilities
would be built and flood control structures completed. This partially nuclear excavated
option is estimated to require at least 14 years to design and construct. The estimated cost is
about $2.6 billion.
If conventional excavation were used for the divide cut, it would be by open-pit mining
techniques. Except for the divide section, the entire canal would be excavated to 1,400-foot
width to achieve desired transiting capacity. Fifteen years would be required to complete
this canal and it would cost about $5.4 billion.
Either method of excavation would involve construction of extensive flood control
works to divert or control the Atrato, Chucunaque, and Tuira Rivers. Other streams would
be discharged into the canal by means of appropriate inlet structures. Tidal checks would be
used to limit currents on both alternatives.
Problem areas: The most critical problem is the lack of reliable topographic and
geologic data on which to base designs. Estimates for this route have assumed relatively
competent rock, but it is possible that clay shales extend into the divide region where the
deepest cuts would be required.* The presence of these shales in the divide might preclude
nuclear excavation there. The presence of clay shales in the divide cut would cause a large
increase in the excavation volume if conventional methods were employed.
The region is covered with jungle and is almost completely undeveloped. The local
economy is insufficient to support the construction effort. Present port capabilities at La
Palma and Turbo are limited to small craft, and more adequate port facilities would have to
be built. Access to the area is limited to water routes which are good along the Atrato River
and in the lower part of the Tuira River. There is no convenient access to the divide area and
the supply of local labor is limited.
River diversion would be a major undertaking, particularly in the Atrato Valley.
Seasonal floods of the Chucunaque, Tuira, and Atrato rivers, which carry heavy sediment
loads, would necessitate control works to prevent shoaling of the channels.
If geologic conditions proved favorable, the low elevation of the divide in this area
would permit construction of a wide channel with relatively small yield nuclear explosives,
thus reducing the extent of the undesirable effects of nuclear excavation. However,
construction of the divide cut by these techniques would require the evacuation of as many
as 30,000 inhabitants from a land exclusion area estimated at 6,500 square miles. (See
Figure 17-3). The exclusion area over the ocean would be operative only a short time, | to 2
days after each detonation.
*Route 23 crosses the divide at a low point in an otherwise high range of hills which is structurally controlled. This low
pass suggests that the material is weak and could be clay shale.
V-192
CA asie ym a ALUN, Seer
GULF OF
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9
/2 *
\R .QUIBDO w
LEGEND / a
Bb
Exclusion from time of first detonation c + ue
until several months after final detonation. 40 axe , a
es | Total exclusion period will cover 4 to 5 years. 0 aoe )
ce ¥ . &/ BUENA VISTA /
Periodic exclusion (up to 48 hours) following 5 he V
| each detonation. gee NU 4 |
— ,ANDAGOYA
SCALE IN MILES
25 0 25 30
FIGURE 17-3
V-193
Because this route crosses an international boundary, access to construction sites might
be administratively complicated.
Alternate nuclear route: Late in the course of the study, an alternate alinement for
Route 23 was suggested to allow greater use of nuclear explosives and possibly avoid slope
stability problems in crossing the divide. This would be accomplished by starting the
alinement in Garachine Bay on the Pacific, and running it almost due east, avoiding, insofar
as possible, the low-lying Tuira Valley which does not appear suitable for nuclear
excavation. This alinement would cross the divide north of the one previously discussed,
meeting the Atrato River at Sautata, then turning northeast to Candelaria Bay. In the
20-mile reach between Sautata and Candelaria Bay, hydraulic dredging would be used; the
rest of the land cut (84 miles) would be excavated by nuclear explosives. About 74
detonations would be required, with an average yield of 5.5 megatons. The largest
detonation would be 7.5 megatons.
Assuming that nuclear explosives could be used as suggested, this alternative has certain
advantages when compared with other routes constructed by nuclear means. Its low
elevation would allow it to be excavated with a maximum single explosive yield of only 1.5
megatons. Construction costs would be comparable to those of Route 25, and a two-lane
canal might be built at a lower cost here than on any other route.
These advantages depend on the existence of favorable geology over an 84-mile reach
about which geologic knowledge is extremely limited. The canal would be about 120 miles
long. Nuclear operations would require an exclusion area of about 8,000 square miles,
containing a population of about 30,000. (See Figure 17-4).
No cost estimate was prepared for this alternative because it did not appear more
favorable than Route 25, and because it was suggested after the Commission had determined
that the feasibility of nuclear canal excavation could not be demonstrated within the next
several years.
Summary data: The characteristics of Route 23 constructed by conventional means
only are summarized in Table 17-1. Those of a canal employing nuclear excavation through
the divide are in Table 17-2.
V-194
SN ©
| 4;
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_ FIGURE 17-4
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pe CHE =e
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GULF OF
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MUTIS * 6
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LEGEND X
/2 y
Nuclear excavation << ,QUIBDO &
Conventional excavation 7 &
iN
Exclusion from time of first detonation c \ e ve
until several months after final detonation. 40 sn0
Total exclusion period will cover 4 to 5 years. \ on Aa )
sf) BUENA VISTA
Periodic exclusion (up to 48 hours) following ~ /
iy \
each detonation. icy N27 |
ALTERNATE NUCLEAR ROUTE 23°C
TENTATIVE TRACE AND EXCLUSION AREA
SCALE IN MILES
25 0 25 50
SS
V-195
TABLE 17-1
CHARACTERISTICS OF ROUTE 23 CONVENTIONAL
Canal dimensions 550 x 75 ft (85 ft maximum depth)®
Length of land cut 119 miles
Length of Beeiecas 27 miles
Design vessel 150,000 dwt
Capacity© 50,000 transits/yr (20 hrs average TICW)
Construction time 15 years
Excavation volume 5 200,000,000 cu. yd.
Excavation cost $3,620,000,000
Other facilities $ 870,000,000
Contingencies $ 540,000,000
EDS&AG $ 360,000,000
TOTAL CONSTRUCTION COST $5, 390,000,000
Operation and maintenance:
Fixed costs $57,000,000/year
Variable costs $1,100/transit
4Based on a 25-mile long centrally located design channel through the divide, connected to
the ocean by 2-lane channels, 1400 by 85 feet.
b250,000 dwt ships could transit in favorable currents.
CBased on continuous operation of tidal checks to limit current to a maximum of 2 knots.
dengineering, design, supervision and administration.
Favorable Unfavorable
Supporting None exists capable of supporting
facilities construction and operation of an
interoceanic canal.
Existing Limited berthing for small craft None exists capable of handling
harbor exists at La Palma and Turbo. deep draft vessels.
facilities
Harbor Good on the Pacific side in the On the Atlantic side, harbor
potential Darien Harbor area of the Gulf facilities must be constructed
of San Miguel. about 30 miles inland near
Sautata where suitable founda-
tions exist.
V-196
TABLE 17-1
CHARACTERISTICS OF ROUTE 23 CONVENTIONAL (Cont'd)
Favorable
Unfavorable
Approaches/
coasts
Tidal
currents
Routes of
communication
Terrain
Geology
Flood control
and river diversion
Construction
features
Deep water Is close in with fair
protection on the Atlantic; the
Pacific approach is well protected
in the Gulf of San Miguel.
The Atrato Valley is only a few
feet above sea level. Maximum
elevation is only about 450 feet.
Limited investigations show much
of the alinement is in alluvium or
soft sediments.
Most of the river diversion can be
accomplished with inexpensive
hydraulic dredging.
Inexpensive hydraulic dredging
could be used in the Atrato and
Tuira River valleys.
Wer,
Intermittent sections of the 28-
mile approach channel through
the Gulf of San Miguel would
need dredging.
The location of the Pacific
entrance of the canal in the wide
Darien Harbor and estuary would
make it difficult to hold currents
to 2 knots or less.
No roads or railroads exist in
this part of Colombia and Panama.
There are no all-weather airfields.
Route is either dense forest or
marshy terrain.
Both surface and subsurface
geology are poorly defined. There
is a possibility that weak material
requiring flat side slopes extends
into the divide area.
Extensive flood control facili-
ties would be required for the
heavy seasonal flow of the Chucun-
aque, Tuira and Atrato Rivers.
The Atrato River diversion is a
major excavation in itself.
Knowledge of physical character-
istics of this route is extremely
limited. Tidal checks would be
massive engineering structures
requiring special attention.
TABLE 17-1
CHARACTERISTICS OF ROUTE 23 CONVENTIONAL (Cont'd)
Favorable Unfavorable
Population density is under 5 per- Lack of development would
sons per square mile. Inhabitants require all support for construction
are engaged in fishing on the to come from outside of local
Pacific coast, slash- and-burn area.
agriculture in the interior and
lumbering along the Atrato River.
Environmental Properly placed spoil should increase The spoil disposal areas would
impact the land value. be extensive.
Expansion Significant expansion of capacity
possibilities would require widening the divide
cut.
Miscellaneous Construction and operation might
be complicated administratively
because two host countries would
be involved.
V-198
TABLE 17-2
CHARACTERISTICS OF ROUTE 23 NUCLEAR — CONVENTIONAL
Canal dimensions See note a.
Length of land cut 119 miles
Length of spaces 27 miles
Design vessel 150,000 dwt
Capacity©® 50,000/yr (20 hrs average TICW)
Construction time 14 years
Conventional excavation volume 1,900,000,000 cu. yd.
Excavation cost $1,170,000,000
Other facilities $ 940,000,000
Contingencies $ 290,000,000
EDS&Ad $ 170,000,000
TOTAL CONSTRUCTION COST $2,570,000,000
Operation and maintenance:
Fixed costs $57 ,000,000/year
Variable costs $1,100/transit
4Based ona 25-mile, 2-lane, 1,000-foot-wide nuclear section; a 53-mile design channel; and
68 miles of 1,400-foot-wide 2-lane channel including approaches.
ba 250,000 dwt ship could transit under carefully controlled conditions.
°Based on continuous operation of tidal checks to limit current to a maximum of 2 knots.
deEngineering, design, supervision and administration.
Favorable Unfavorable
Supporting None exists capable of supporting
facilities construction and operation of an
interoceanic canal.
Existing Limited berthing for small craft None exists capable of handling
harbor exists at La Palma and Turbo. deep draft vessels.
facilities
Harbor Good on the Pacific side in the On the Atlantic side, harbor
potential Darien Harbor area of the Gulf facilities must be constructed
of San Miguel. about 30 miles inland near Sautata
where suitable foundations exist.
V-199
TABLE 17-2
CHARACTERISTICS OF ROUTE 23 NUCLEAR — CONVENTIONAL (Cont'd)
Favorable Unfavorable
Approaches/ Deep water is close in with fair Intermittent sections of the 28-
coasts protection on the Atlantic; the mile approach channel through
Pacific approach is well protected the Gulf of San Miguel would
in the Gulf of San Miguel. need dredging.
Tidal The location of the Pacific
currents entrance of the canal in the wide
Darien Harbor and estuary would
make it difficult to hold cur-
rents to 2 knots or less.
Routes of No roads or railroads exist in
communication this part of Colombia and Panama.
There are no all-weather airfields.
Terrain The Atrato Valley is only a few feet Route is either dense forest or
above sea level. Maximum elevation marshy terrain.
is only about 450 feet.
Geology Limited investigations show much of Both surface and subsurface
the alinement is in alluvium or soft geology are poorly defined. There
sediments. is a possibility that weak material
requiring flat side slopes extends
into the divide area. This may
preclude nuclear construction.
Flood control and Most of the river diversion can be Extensive flood control facilities
river diversion accomplished with inexpensive would be required for the heavy
hydraulic dredging. seasonal flow of the Chucunaque,
Tuira and Atrato Rivers. The
Atrato River diversion is a major
excavation in itself.
Construction Inexpensive hydraulic dredging Knowledge of physical character-
features could be used in the Atrato and istics of this route is extremely
Tuira River valleys. limited. Tidal checks would be
massive engineering structures
requiring special attention.
V-200
TABLE 17-2
CHARACTERISTICS OF ROUTE 23 NUCLEAR — CONVENTIONAL (Cont'd)
Local
development
Environmental
impact
Nuclear
effects
Exclusion
area
Expansion
possibilities
Miscellaneous
Favorable
Population density is under 5 per-
sons per square mile. Inhabitants
are engaged in fishing on the
Pacific coast, slash- and-burn agri-
culture in the interior and lumbering
along the Atrato River.
Properly placed spoil should increase
the land value.
Air blast effects and potentially
harmful fallout should be contained
within the exclusion area. Risk of
damage to metropolitan area is least
of all nuclear routes.
Widening through river valleys could
be accomplished easily with minimum
interference with operations.
V-201
Unfavorable
Lack of development would require
all support for construction to
come from outside of local area.
The spoil disposal areas would
be extensive.
Exclusion area is 90 miles wide
and covers an area of about
6,500 square miles in which up
to 30,000 people live.
Construction and operation might
be complicated administratively
because two host countries would
be involved.
N
So
S
>
CHAPTER 18
ROUTE 25 — COLOMBIA SEA-LEVEL CANAL
Route 25 was considered for construction by a combination of nuclear and
conventional excavation methods, applied to take full advantage of the capabilities of each.
Because of its remote location and the undeveloped character of the surrounding region,
nuclear excavation techniques appear well suited for use on this route.
Accuracy of estimates: As was the case with Route 17, a data base has been developed
which is adequate for evaluating this alternative with respect to other nuclear excavated
routes.
Route 25 trace: (See Figure 18-1). Route 25 starts in Humboldt Bay on the Pacific
Coast, approximately 200 miles southeast of Panama City. After crossing a narrow coastal
strip, the alinement runs eastward for about 10 miles through the Choco Highlands which
form the Continental Divide. Turning to the northeast, the trace crosses the upper Truando
Valley and the Saltos Highlands and then parallels the Truando River to its confluence with
the Atrato River. From there it passes through the Atrato Lowlands for about 50 miles,
entering the Caribbean Sea at Candelaria Bay in the Gulf of Uraba at a point 2 miles from
deep water. This alinement is 103 miles long, including 5 miles of approach channels; its
peak elevation along the centerline is about 950 feet. Dense forests prevail except where the
Atrato swamp does not support tree growth. Although the region is generally undeveloped,
there are a few scattered settlements along the banks of the major rivers. The centerline
profile of the route is shown in Figure 18-2.
Construction: The estimates for Route 25 assume the feasibility of nuclear excavation
in a 20-mile reach from the Pacific coast through the Continental Divide, the upper Truando
Valley, and the Saltos Highlands. Conventional excavation would begin at an elevation of
about 300 feet in the Truando Valley, with shovel excavation and truck haul used at
elevations above 75 feet. Over 90 percent of the conventional excavation would be at
elevations lower than 75 feet and would be accomplished by hydraulic dredging.
Flood diversion measures would be extensive, since most of the Atrato River would
have to be discharged into Colombia Bay through a 1,000- by 50-foot diversion channel east
of the canal alinement. Bank revetment would be used to prevent meandering of the
realined river and breaching of the separation between the diversion channel and the canal.
A smaller but similar floodway west of the alinement would divert runoff from about 2,000
square miles of drainage area into Candelaria Bay. An inlet and several diversion channels,
V-203
V-204
GULF OF
SAN ESE
CARIBBEAN SEA
1
i
CARIBBEAN SEA
y/ CANAL ZONE
as AREA OF
a
eee MAP
ee IN ee
iy COLOMBI¢
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a
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HIGHLANDS
RIO CURICHE
HUMBOLDT BAY â„¢
LEGEND (
5G= paso NUCLEAR EXCAVATION
Gis CONVENTIONAL EXCAVATION
—_
N
iN
Ne
ROUTE 25
PANAMA-COLOMBIA BORDER AREA
SCALE IN MILES
5) Oe SiO ver 20Lme PS a0 ES FIGURE 18-1
DEPTHS IN FATHOMS
ELEVATION—FEET
2
ATRATO
FLOOD PLAIN
HUMBOLDT
BAY COLOMBIA
PACIFIC ATLANTIC
SIDE CONTINENTAL SIDE
DIVIDE
900
700
CONVENTIONAL EXCAVATION
500
300 TRUANDO VALLEY ATRATO VALLEY
100 NUCLEAR
i) EXCAVATION
CHANNEL BOTTOM—™
-100
0 20 40 60 80 100
DISTANCE—MILES
PROFILE
ea MILE APPROACH CHANNEL 3 MILE APPROACH CHANNEL
20 MILES 25 MILES 28 MILES 25 MILES ¢
(2-LANE) (SINGLE LANE) (BY-PASS) (SINGLE LANE)
98 MILES
2 MILE LAND CUT 3-MILE
APPROACH CHANNEL APPROACH CHANNEL
(2-LANE) (2-LANE)
CANAL CONFIGURATION
ROUTE 25
FIGURE 18-2
V-205
excavated with nuclear explosives, would be required to provide flood control and river
diversion along the nuclear reach of the canal.
Hydraulic dredges would begin work on the canal within the Atrato flood plain early in
the construction period. During nuclear operations, they would work at the north end of
the alinement.
Nuclear excavation would require about 150 individual explosives detonated in 21
separate groups. Detonations would be scheduled in two passes, the first lasting 8 months
and the second 6 months, with an interval of about 18 months to prepare for the second
pass. The largest single detonation would be 13 megatons; the total yield of all explosives in
the two passes would be about 120 megatons.
Because of the general lack of development in this region, all facilities required for
constructing and operating the canal would have to be provided. These would include a
transisthmian highway; harbor facilities; an all-weather airfield; administrative, maintenance,
and residential facilities; lateral roads; and bridge or ferry crossings.
Construction of a sea-level canal on this alinement, with a 28-mile bypass channel,
would cost approximately $2.1 billion; it would take about 13 years.
Problem areas: Without nuclear excavation, this route loses its advantages of low
construction cost and inexpensive expansion potential. The land exclusion area (Figure
18-3) is about 3,100 square miles and has about 10,000 inhabitants. The exclusion area over
the ocean would be operative only for a short time, 1 to 2 days after each detonation.
Radiological surveys would have to be conducted continuously to determine when the area
might be reoccupied. Some portions of the area could be re-entered shortly after the last
detonation; however, it would probably be more practical to reoccupy the entire exclusion
area, except for the immediate vicinity of the craters, at one time, 6 to 12 months after the
last detonation. Some minor ground motion damage might occur in more distant population
centers.
The length of Route 25 and the moderate range of Pacific tides in Humboldt Bay limit
maximum tidal currents to 3 knots. To reduce these currents to 2 knots or less would
require tidal checks. The one at the Pacific end of the canal would span a two-lane channel.
This would be a very large gate with a high initial cost and a complex operating mechanism.
These disadvantages appear to outweigh the advantages of insuring a slower current, which
may eventually prove to be unnecessary. Therefore, tidal gates have not been included in the
preferred design of this route, and operation with currents occasionally rising to 3 knots has
been accepted. If necessary, traffic could be curtailed briefly in periods of highest currents
without a significant reduction in the annual transiting capacity.
The local economy of the region is not sufficiently developed to support the
construction operation. Most of the land in the Atrato Valley is marshy and unsuited for
construction of facilities; the more solid ground is heavily forested. Adequate ports or
anchorages would have to be built. At least one all-weather airfield would be needed and
adequate land access into the area would have to be provided.
Subsurface geologic data collection on Route 25 was limited to 22 borings, most of
which were concentrated in the divide area where material considered suitable for nuclear
excavation was found. Only seven borings, supplemented by 27 soil probings, were made
V-206
1
across the lower Truando and Atrato valleys to determine the location of underlying
bedrock.
Summary data: The characteristics of Route 25 are summarized in Table 18-1.
V-207
CARI BBE AVRyeSee 1
GULF OF
SAN BLAS
COLON =
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ee Cs ees. ha
AO Panama cl Nene
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7 CANAL
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SAN MIGUEL
TURBO
Hy
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Ke COLOMBIA
BAY
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= COLOMBIA
°
OF
PANAMA
LEGEND
Exclusion from time of first detonation
I Tre cxtuson prod wil cover 80 5 yor ot.
ii cnn
— ,ANDAGOYA
ROUTE 25 NUCLEAR EXCLUSION AREA
SCALE IN MILES
0 25 50
ee
pans FIGURE 18:
.
TABLE 18-1
CHARACTERISTICS OF ROUTE 25
Canal dimensions See note a.
Length of land cut 98 miles
Length of approaches 5 miles
Design vesselb 150,000 dwt
Capacity 65,000 transits/yr (20 hours average TICW)
Construction time 13 years
Conventional excavation volume 1,700,000,000 cubic yards
Conventional excavation cost $700,000,000
Nuclear excavation cost $185,000,000
Other facilities $850,000,000
Contingencies $225 000,000
EDS&A4 $140,000,000
TOTAL CONSTRUCTION COST $2,100,000,000
Operation and maintenance:
Fixed costs $49 ,000,000/year
Variable costs $1,030/transit
4Based ona 20-mile, two-lane, 1,000-foot-wide nuclear section, a 78-mile conventionally
excavated design channel with a 28-mile bypass section, and 5 miles of 1400- by 85-foot
approach channels.
ba 250,000 dwt ship could transit in favorable currents.
Based on a 3-knot maximum current. Capacity of other routes is based on a 2-knot
maximum current.
deEngineering, design, supervision and administration.
Favorable Unfavorable
Supporting None exists capable of support-
facilities ing construction and operation
of an interoceanic canal.
Harbors Limited berthing for small crafts None exists capable of handling
exists at Turbo. deep-draft vessels.
Harbor Potential is poor on the Pacific
potential side. On the Atlantic side harbor
facilities must be constructed about
30 miles inland near Sautata
where suitable foundations exist.
V-209
TABLE 18-1
CHARACTERISTICS OF ROUTE 25 (Cont'd)
Favorable Unfavorable
Approaches/ Deep water is close in on both No protection exists on the
coasts coasts. Fair protection exists Pacific.
on the Atlantic.
Tidal Currents over 3 knots will occur The canal’s length and config-
currents on less than one day per month. uration make it difficult to
provide tidal checks to hold
currents to 2 knots or less.
Routes of The Atrato River offers easy No transisthmian roads or coast-
communication shallow draft passage to its wise roads exist in this part of
confluence with the Truando River. Colombia. There are no rail-
roads or all-weather airfields.
Terrain Alluvial flood plain would allow Much of the route is through
inexpensive hydraulic dredging for marshy terrain, complicating
most of the route and would permit construction of facilities.
easy expansion as needed.
Geology Borings in the divide reach indicate Geologic data in the Atrato
geologic conditions suitable for delta are limited.
stable nuclear excavations. Bedrock
in the Atrato delta appears to be
well below desired channel depth.
Flood control Most of the extensive river diversion The Atrato and the Salaqui
and river can be accomplished by hydraulic Rivers carry large flows and
diversion dredging. silt loads which would have to
be diverted away from the canal.
Diversion of the Atrato River is
a major excavation project.
Construction This route presents no major slope Bank protection would be re-
problems stability problems; dredging oper- quired to keep the meandering
ations would be routine. Atrato separate from the
canal. The local labor supply
is limited.
V-210
TABLE 18-1
CHARACTERISTICS OF ROUTE 25 (Cont'd)
Favorable Unfavorable
Environmental Lack of local development would The ecology of a large part of
impact minimize the extent of the sociolog- the lower Atrato swamp would
ical impact of evacuation. Areas be changed.
filled with spoil should become
economically useful land in what
is now an alluvial swamp.
Most airblast effects and all Ground motion and airblast
potentially harmful fallout would be effects might cause some minor
contained within the exclusion area. damage outside the exclusion
area.
The exclusion area would be the The exclusion area would be
smallest of any of the nuclear routes. about 3,100 square miles where
it is estimated that 10,000
people now live.
The nuclear excavated section would
not require expansion. The long
Atrato Valley reach is well suited
for expansion in increments at
relatively low cost.
Population density is about 3 Lack of development requires
development persons per square mile. Inhabi- all support for construction to
tants are engaged in limited slash- come from outside the local
and-burn agriculture, and in area.
small-scale lumbering operations
in the Truando Valley.
Miscellaneous This is the least costly route for This isthe longest shipping
construction, provided nuclear route from New York to San
excavation is feasible. Francisco of the routes
considered.
V-211
(J
—
i
>
CHAPTER 19
SUMMARY OF ROUTE CHARACTERISTICS
This chapter consists of three summary tables which allow comparison of canal
alternatives in three categories: conventionally excavated sea-level canals, sea-level canals
excavated wholly or in part with nuclear explosives, and lock canals. The data shown are
condensed from those given in the tables of characteristics which summarized the preceding
discussions of the individual routes.
V-213
7
wie
PNOD
iW
é
zs
2
CS
~
+
Sh
ot
=
Construction cost
Operation and maintenance
(35,000 transits/year)
Initial capacity
Design and construction time
Conventional excavation volume
Average time in canal waters
costs
Supporting facilities
Existing harbor facilities
Harbor potential
Approaches and coasts
Tidal currents
Routes of communication
Terrain (elevation shown Is highest point
along centerline)
Geology
Flood control and river diversion
Local development
Construction features
Environmental impact
Expansion possibilities
Miscellaneous
TABLE 19-1
SUMMARY OF ROUTE CHARACTERISTICS — CONVENTIONALLY EXCAVATED ALINEMENTS
$11,000,000,000
$93,000,000/year
35,000 transits/year
18 years
7,000,000,000 cubic yards
30 hours
Virtually non-existent. Granada can pro-
vide a limited support base.
Limited small boat facilities exist at San
Juan del Sur.
Good on Pacific side in Salinas Bay. Poor
on Atlantic.
Unprotected on Atlantic side; Salinas
Bay on Pacific. Deep water close in on
both coasts.
Lowest current of all sea-level routes.
Tidal gates not required.
No transisthmian road or railroad.
Coastal roads only on Pacific side. Water-
borne transportation on San Juan River
and Lake Nicaragua. No all-weather air-
fields.
Two mountain ranges separated by a
marshy plain. Dense jungle predom-
inates. Jungle alluvial coastal plain on
Atlantic side. Maximum centerline eleva-
tion 750 feet.
Knowledge of subsurface geology lim-
ited. Surface data indicates geology con-
ducive to canal construction. This is an
area of active volcanoes.
Extensive flood control facilities are
required for streams flowing into Lake
Nicaragua and into the San Juan River.
Basically undeveloped except on divide
slopes where ranching predominates.
Population density about 25/sq. mi. in
this area; 5/sq. mi. throughout most of
route where there are scattered patches
of subsistence agriculture.
Level of Lake Nicaragua must be main-
tained.
Large area of San Carlos Plains would be
cut off from access to Lake Nicaragua.
Few inhabitants displaced.
Costly because of length.
Long land cut. Most angular sea-level
route. This is a short New York-San
Francisco sea-level route. Construction
in two countries.
$2,880,000,000
$56,000,000/year
38,000 transits/year
14 years
1,870,000,000 cubic yards
20 hours
Available in Canal Zone; ten miles from
either terminus.
Deep draft capability in Canal Zone.
Needs expansion to hold large yessels.
Shallow draft harbors on both coasts at
Lagarto and Puerto Caimito.
Poor in immediate area; good in Canal
Zone.
Short approach with no protection on
Atlantic side. Long approach with partial
protection on Pacific.
Currents would exceed two knots. Con-
tinual use of tidal gates may be required.
No transisthmian facilities in immediate
area. (See 14-S for facilities along lock
canal.) Coastal roads on both sides.
Route accessible from Gatun Lake.
Low mountain ranges near both coasts.
Original jungle partially cleared. Arms of
Gatun Lake cross route. Maximum cen-
terline elevation 400 feet.
Extremely variable. Subsurface geology
data limited. Critical divide section may
possibly require very flat side slopes.
Fewest flood control problems of all
routes. Permanent barrier dams required
on Gatun Lake arms.
Area opening up to agricultural develop-
ment. Dense jungle being cleared for
cattle ranching. Subsistence farming
giving way to truck farming. Population
density varies from 5 to 25/sq. mi.
No apparent problems except possible
need for flatter slopes than now envis-
loned and barrier dam construction
across arm of Gatun Lake. Good accessi-
bility and supply of unskilled labor.
Little harmful effect. A few small ham-
lets displaced.
Construction of a bypass would be fairly
simple. Expansion to two lanes would
require cuts through higher elevations
than the original alinement.
Offers easiest operation in conjunction
with existing Panama Canal.
14 Separate
$3,040,000,000
$55,000,000/year
39,000 transits/year
16 years
1,950,000,000 cubic yards
20 hours
Virtually complete facilities at Cristo-
bal-Colon and Balboa-Panama City.
Deep draft capability in Limon Bay and
Balboa. Needs expansion to hold large
vessels.
Fair on Pacific side; good on Atlantic in
Limon Bay.
Approaches are relatively long.
Currents would exceed two knots. Con-
tinuous use of tidal gates may be re-
quired.
With 14C, best of all routes. Two-lane
all-weather transisthmian road. Trans-
isthmian railroad. Coastwise road and
all-weather airfields on both coasts. Lock
canal offers complete access.
Essentially follows lock canal route. Sep-
arate divide cut through undeveloped
land. Maximum centerline elevation 450
feet.
Extremely variable. Well known. Weak
formations in divide area would require
flat side slopes. Poor material and found-
ations for flood contro! dikes in Gatun
Lake.
Flood control dikes required across Ga-
tun Lake. Lowering of lake level re-
quired.
Region highly developed to support
interoceanic shipping.
Gatun Lake would be maintained by
large flood control dikes. Flexibility of
construction systems limited. Canal traf-
fic will be interfered with but not
endangered. With 14C, best accessibility
and labor supply of all routes.
Lake level drop and spoil disposal detri-
mental to Gatun Lake.
Expansion to two lanes would require
deep cuts through areas of known insta-
bility.
Construction of sea-level canal eliminates
present lock canal as operable alternate
route.
14 Combined
$2,930,000,000
$55,000,000/year
39,000 transits/year
13 years
1,600,000,000 cubic yards
20 hours
Virtually complete facilities at Cristo-
bal-Colon and Balboa-Panama City.
Deep draft capabilities in Limon Bay and
Balboa. Needs expansion to hold large
vessels.
Fair on Pacific side; good on Atlantic in
Limon Bay.
Approaches are relatively long.
Currents would exceed two knots. Con-
tinuous use of tidal gates may be re-
quired.
With 14S, best of all routes. Two-laneall-
weather transisthmian road. Transisth-
imian railroad. Coastwise road and all-
weather airfields on both coasts. Lock
canal offers complete access.
Essentially follows lock canal route.
Maximum centerline elevation 400 feet.
Extremely variable. Well Known. Weak
formations in divide area would require
flat side slopes. Poor material and found-
ations for flood control dikes in Gatun
Lake.
Flood control dikes required across
Gatun Lake. Lowering of lake level
required.
Region highly developed to support in-
teroceanic shipping.
Gatun Lake must be maintained by large
flood control dikes. Flexibility of con-
struction systems limited. High risk of
major interruption to lock canal opera-
tions exists in the divide cut due to
slides of weak material. With 14S, best
accessibility and labor supply of all
routes.
Lake level drop and spoil disposal deteri-
mental to Gatun Lake.
Expansion to two lanes would require
deep cuts through areas of known insta-
bility.
Construction of sea-level canal eliminates
present lock canal as operable alternate
route.
$5,390,000,000
$95 ,000,000/year
50,000 transits/year
15 years
5,200,000,000 cubic yards
20 hours
La Palma and Turbo can provide a
limited support base.
None capable of handling deep draft
vessels. Shallow draft capability at La
Palma and Turbo.
Good on Pacific side in Darien harbor;
fair on Atlantic.
Very well protected approach on Pacific
side. Short partially protected approach
on Atlantic.
Currents would exceed two knots in the
Tuira estuary.
No transisthmian or coastwise routes of
communication except Atrato and Tulra
Rivers. No all-weather airfields.
Two extensive alluvial valleys near sea-
level separated by broad low mountain
ridge. Heavily jungled where ground can
support trees; otherwise marshy. Max-
imum centerline elevation 450 feet.
Both surface and subsurface geology
virtually unknown. Possibility that weak
Sabana shales extend into divide area.
Extensive flood control facilities re-
quired for Atrato, Tuira and other
streams.
Very little development. Minimum
slash-and-burn agriculture. Fishing and
limited ranching on Pacific coast. Pop-
ulation density 5/sq. mi.
No apparent problems but knowledge of
Physical characteristics of route is ex-
tremely limited. Accessibility and labor
supply limited.
The spoil area would be extensive. Prop-
erly placed, it could increase land value.
Generally unlimited. Much could be ac-
complished by hydraulic dredging.
Construction in two countries.
V-215/V-216
ne
Construction Cost
Operation and maintenance costs (at 35,000 tran-
sits/year)
initial capacity*
Construction time
Conventional excavation volume
Average time in canal waters
Supporting facilities
Existing harbor facilities
Harbor potential
Approaches and coasts
Tidal currents
Routes of communication
Terrain (elevation shown is highest point along
centerline)
Geology
Flood control and river diversion
Local development
Construction features
Environmental impact
Nuclear effects
Exclusion area
Expansion possibilities
Miscellaneous
at 20 hours time in canal waters.
TABLE 19-2
SUMMARY OF ROUTE CHARACTERISTICS, ALINEMENTS INCLUDING NUCLEAR EXCAVATION
8N
$5,170,000,000
$88,000,000/year
200,000+ transits/year
12 years
50,000,000 cubic yards
20 hours
Virtually nonexistent. Granada can provide a lim-
ited support base.
Limited small boat facilities exist at San Juan del
Sur.
Good on Pacific side in Salinas Bay; poor on
Atlantic.
Unprotected on Atlantic side; Salinas Bay on
Pacific. Deep water close in on both coasts.
Currents would reach two knots only occasionally.
Lowest of all sea-level routes. Tidal gates not
required.
No transisthmian road or railroad. Coastal roads
only on Pacific side. Waterborne transportation on
San Juan River and Lake Nicaragua. No all-weather
airfields.
Two mountain ranges separated by a marshy plain.
Dense jungle predominates. Jungled alluvial coastal
plain on Atlantic side. Maximum elevation 1,000
feet.
Knowledge of subsurface geology limited. Surface
data indicates geology conducive to canal construc-
tion. This is an area of volcanic activity.
Extensive flood control facilities are required for
streams flowing into Lake Nicaragua and into the
San Juan River.
Basically undeveloped except on divide slopes
where ranching predominates. Population density
about 25/sq. mi. in this area; 5/sq. mi. throughout
most of route where there are scattered patches of
subsistence agriculture.
Loss of level of Lake Nicaragua possibly endan-
gered by ground motion from nuclear detonations.
Limited accessibility.
Large area cut off from access to Lake Nicaragua.
Ejecta from detonations distributed all along route.
San Jose and Managua would receive ground
motion and airblast damage. Fallout hazards
should be contained within exclusion area.
Exclusion area is 150-200 miles wide, covers
21,000 square miles and includes 675,000 people.
Expansion not considered necessary.
With 8C, short New York-San Francisco route.
Construction in two countries.
17
$3,060,000,000
$57,000,000/year
42,000 transits/year
16 years
1,600,000,000 cubic yards
20 hours
La Palma can provide a limited support base.
Limited on Atlantic side; shallow draft capability
on Pacific at La Palma.
Good on both coasts for deep draft vessels after
dredging.
Very long well protected approach on Pacific side.
Short partially protected approach on Atlantic.
Highest of all routes. Tidal checks would be in
continuous use,
No transisthmian or coastwise routes of communi-
cation. No all-weather airfields.
Two mountain ranges separated by alluvial valley.
Heavily jungled throughout. Maximum elevation
1,000 feet.
Subsurface investigations show twenty miles of
weak clay shale which require flat side slopes and
preclude use of nuclear explosives. Mountainous
areas appear amenable to nuclear excavation.
Extensive flood control facilities required.
Very little development. Cuna Indian culture on
Atlantic coast. Minimum slash-and-burn agricul-
ture. Fishing and limited ranching on Pacific Coast.
Population density 6/sq. mi.
Conventional excavation cannot proceed until nu-
clear excavation completed. Side slopes in 20 miles
of clay shales could present stability problems.
Strip along mountainous reaches would be covered
with material ejected from craters. Extensive
Indian culture uprooted.
Possibility of some minor damage in Panama City
from ground shock and airblast. Fallout hazards
should be contained within exclusion area.
Exclusion area is 100 miles wide, covers 6,500
square miles and includes 43,000 people. Best
harbor site lies within exclusion area.
Generally unlimited. Twenty miles of conventional
excavation would be required, almost all through
clay shale.
23 (Nuclear Divide Cut)
$2,570,000,000
$95 ,000,000/year
50,000 transits/year
14 years
1,900,000,000 cubic yards
20 hours
La Palma and Turbo can provide a limited support
base.
None capable of handling deep draft vessels.
Shallow draft capability of La Palma and Turbo.
Good on Pacific side in Darien harbor; fair on
Atlantic.
Very long well protected approach on Pacific side.
Short partially protected approach on Atlantic.
Currents would exceed two knots in the Tuira
estuary.
No transisthmian or coastwise routes of communi-
cation except Atrato and Tuira Rivers. No all-
weather airfields.
Low extensive alluvial valleys near sea-level separa-
ted by broad low mountain ridge. Heavily jungled
where ground can support trees; otherwise marshy.
Maximum elevation 450-500 feet.
Both subsurface and surface geology virtually
unknown. Possibility of weak clay shales in divide
which would require rerouting or might preclude
use of nuclear explosives.
Extensive flood control facilities required for
Atrato, Turia, and other streams.
Very little development. Minimum slash-and-burn
agriculture. Fishing and limited ranching on Pacific
coast. Population density 5/sq. mi.
No apparent problems but knowledge of physical
characteristics of route is extremely limited. Ac-
cessibility and labor supply limited.
Strips of land along divide reach would be covered
with material ejected from craters.
Risk of minor damage in metropolitan areas from
ground motion is the least of nuclear routes.
Exclusion area 90 miles wide, covers 6,500 square
miles and includes 30,000 people.
Generally unlimited. Much could be accomplished
by hydraulic dredging.
Construction in two countries.
2s
$2,100,000,000
$84,000,000/year
65,000 transits/year
13 years
1,700,000,000 cubic yards
20 hours
Turbo can provide a limited support base.
None on Pacific side. Shallow draft port at Turbo
on the Atlantic side.
Poor on Pacific side; fair on Atlantic in Candelaria
Bay.
Short approaches on both sides. Partial protection
on Atlantic side; less on Pacific.
Currents over 3 knots will occur less than 1 day per
month.
No transisthmian or coastwise routes of communi-
cation except Atrato River. No all-weather air-
fields.
Extensive alluvial valley and single high mountain
range. Heavily jungled where ground can support
trees; otherwise marshy. Maximum elevation 950
feet.
Subsurface data indicates geology appears favorable
for nuclear excavation in Continental Divide.
Extensive flood control facilities required for
Atrato, Salaqui and other streams.
No development in divide region or Pacific coast.
Lumbering in upper Atrato and Truando Valleys.
Small town of Rio Sucio midway along route.
Population density 3/sq. mi.
None apparent. AccessibHity and labor supply
limited.
Strips of land along divide reach would be covered
with material ejected from craters. A large expanse
of the Atrato flood plain would be reclaimed.
Some minor damage may occur in distant popula-
tlon centers from ground motion effects. Fallout
hazards should be contained within exclusion area,
Exclusion area covers 3,100 square miles and
includes 10,000 people.
Easiest and cheapest of all routes to expand to the
full two lanes. Can be accomplished almost entirely
with hydraulic dredging.
Longest New York-San Francisco route.
V-217/V-218
Design ship
Locks and size
Channel size
Summit pool elevation
Channel bottom elevation
Land cut
Approach channels
Capacity
Construction cost
Annual O&M cost
Excavation volume
Construction time
Supporting facilities
Existing harbor facilities
Harbor potential
Approaches/coasts
Routes of communication
Terrain
Geology
Flood control, river diversion and water supply
Local development
Construction problems
Environmental impact
Expansion possibilities
Miscellaneous
TABLE 19-3
SUMMARY OF ROUTE CHARACTERISTICS, LOCK CANALS
Route 5 Nicaragua
150,000 dwt
double-lane, 3-lift; 1450 x 160 x 65 feet.
500 x 65 feet (max 75 feet)
105 - 110 feet
35 feet
173 miles
4 miles
25,000 transits/year (TICW 36 hours)
$5,700,000,000
$110,000,000
1,700,000,000 cubic yards
12 years
Virtually nonexistent. Granada can provide a limited support base.
Limited small boat facilities exist at San Juan del Sur; even less at San Juan del
Norte.
Good potential exists at Salinas Bay, 35 miles southeast of Brito.
Deep water close on both coasts. No protection except in Salinas Bay.
No transisthmian road or railroad. Coastwise road only on Pacific side. Waterborne
traffic on Lake Nicaragua; small boats on San Juan River. No nearby all-weather
airfields.
Jungle-covered, alluvial, coastal plain on Atlantic side. Low ranges of hills on both
sides of Lake Nicaragua. Maximum cut at elevation 400 feet.
Surface data indicate geology is conducive to canal construction.
Adequate water supply available to meet transiting requirements. Large
impoundment dam required.
Basically undeveloped except on divide slopes where ranching predominates.
Population density 5/sq. mi. throughout most of route. Scattered patches
of slash-and-burn subsistence agriculture in forests.
The locks and lock gates would be massive structures requiring special attention.
Spoil disposal in Lake Nicaragua and oceans should present no problems. Popu-
lation displacement would be minimal.
Costly because of length. Limited without construction of new locks.
Long land cut. Shortest New York-San Francisco lock canal route.
Route 15 Deep Draft Lock Canal
150,000 dwt
single-lane; 3-lift; 1,450 x 160 x 65 feet
500 x 65 feet (max 75 feet)
82 - 87 feet
12 feet
36 miles
20 miles
35,000 transits/year (TICW 25 hours)
$1,530,000,000
$71,000,000
560,000,000 cubic yards
10 years
Virtually complete facilities at Cristobal-Colon and Balboa-Panama City.
Deep draft capability in Limon Bay and at Balboa is not sufficient to
accommodate 150,000 dwt ships.
Fair on Pacific side; good on Atlantic in Limon Bay.
Approaches are relatively long.
Best of all routes. Two-lane, all-weather, transisthmian road. Transisthmian rail-
road. Coastwise roads and all-weather airfields on both coasts. Water access
available through existing canal.
Essentially follows present lock canal route and Third Locks cuts.
Fairly well known; extremely variable. Weak formations in divide area would
require flat side slopes.
Must pump water to meet transiting requirements.
Region highly developed to support Panama Canal shipping.
Mutual interference between canal traffic and construction effort can be expected.
Pumping to augment water supply may render Gatun Lake brackish and increase
interoceanic transfer of biota. Spoil disposal in Gatun Lake may disrupt ecology
adversely.
Limited without construction of new locks.
V-219/V-220
i ,
eG | el
a
Culebra Cut looking south from the west bank near station 1760, showing condition of both banks. Feb. 25, 1915.
V-221
V=222
PART IV
COMPARISON OF THE MOST PROMISING ALTERNATIVES
From the foregoing analysis, it is apparent that:
— From a technical viewpoint, all of the sea-level routes which have been considered
for construction exclusively by conventional means are feasible. Any of them could
be constructed with techniques and resources now available. They are not,
however, equally desirable. Some have characteristics which put them at a great
disadvantage relative to other routes. (See Table 19-1.) Consequently, the routes
listed below have been eliminated for further consideration in this study for the
reasons shown:
Route 8 Conventional — Requires excessive excavation.
Route 14 Combined -— Involves more interference with, and risk to, con-
tinuous operation of the Panama Canal during con-
struction than does Route 14 Separate.
Route 23 Conventional — Requires excessive excavation.
— The feasibility of nuclear excavation techniques at suitably high explosive yields
has not been established; hence, no route requiring nuclear explosives can be
considered now as an alternative to a canal excavated by conventional means. It is
possible, nevertheless, to discriminate among the several nuclear routes and to
identify features which remove some of them from further consideration. (See
Table 19-2.) These routes, with their principal disqualifying features, are:
Route 8 Nuclear — Displaces an unacceptably large portion of the populations
of two countries.
Route 17 — Costs more than Route 25; the 20-mile reach across the
Chucunaque Valley through clay shales requires costly
conventional excavation, and presents continuing slope
stability problems.
Route 23 Nuclear — There are insufficient data on which to make engineering
estimates for either alternative involving nuclear excava-
tion; longer and apparently more expense than Route 25.
— All lock canal options examined in this study are technically feasible; however,
none could be expanded economically to meet the Commission’s criteria for
60,000 annual transits by the year 2040. Between Route 5 and Route 15, Route 15
is clearly superior.
V-223
The most practicable conventionally excavated sea-level canal routes, together with the
preferred nuclear route, will be examined in more detail in succeeding pages.* These routes
and the principal reasons for their retention are:
Route 10 — Involves relatively small excavation quantities; retains the full
Panama Canal capability at minimum risk during construction
and for as long as desired after construction; and has good
supporting facilities available.
Route 14 Separate — Combines relatively small excavation quantities with the best
available supporting facilities.
Route 25 — Offers the least costly alinement for construction and sub-
sequent expansion if the feasibility of nuclear excavation
becomes established; retains the full Panama Canal capability.
*Even more detailed examinations appear in the appendixes: Route 10 and 14S in Appendix 10; Route 25 in Appendix
13.
V-224
CHAPTER 20
ROUTE 10
The alinement (Figure 14-1) and general characteristics of Route 10 have been
described in Chapter 14.
Capacity: Three channel configurations proposed for Route 10 deserve serious
consideration. Listed in increasing order of transit capacity* and construction cost, they
are:
— A single-lane channel, 36 miles long;
— Two single-lane channels, each 11 miles long, connected by a 14-mile centrally-
located two-lane bypass section; and,
— Two parallel single-lane channels, 25 miles long, with an extended Atlantic
approach channel.
In each case the single-lane design channel would lie between 1,400- by 85-foot
two-lane approaches. Each alternative would employ tidal check gates to limit currents.
Figures 20-la, -lb, and -lc show the locations of these gates and indicate how each
alternative would be operated to hold tidal current velocities below 2 knots.
The single-lane channel would be built first. The bypass channel would be added to be
available when traffic requirements exceed the capacity of the single-lane configuration‘.
The ultimate capacity would be reached by extending the bypass and the Atlantic approach
channel to achieve a full two-way capability. Table 20-1 gives capacity-cost data for these
configurations.
Channel design and ship spacing calculations were based on 150,000-dwt ships
operating unassisted in 4-knot currents; however, because of lack of prototype experience,
capacity calculations assumed a 2-knot maximum current limitation and the use of tugs to
assist navigation. A tug fleet and tidal checks were included in cost estimates. Under those
assumptions, with tidal checks in continuous use, the design channel would give slightly
more than the desired initial design transit capacity. Table 20-2 summarizes the
characteristics of the three Route 10 configurations.
In light of these considerations, the 36-mile single-lane channel was selected as the most
appropriate for initial construction on Route 10. At first, currents in the canal would be
kept under 2 knots by tidal checks located at the Pacific terminus and at a point 25 miles
toward the Atlantic from the Pacific end. Capacities shown in this study are based on this
*For some limiting currents, the order of transiting capability would be different from that shown here. See Table 20-1.
Construction of the bypass might be deferred until the demand for transits exceeds the capacity of a combination of
Route 10 and the Panama Canal.
V-225
APPROACH
CHANNEL
Two lanes
2 miles
DESIGN CHANNEL
APPROACH CHANNEL
Two lanes
TIDAL GATES
3
3
3S
a
2£
=
=
5
c
=
>
Oo
>
=
oO
o
Step1
Gates move at mean
tide as Convoy 1 is
between them and
moving toward the
Atlantic.
AM AM PM
eo
TIDAL
GATE
SLOT
—@bseeeseeeseeseeseeee
PACIFIC OCEAN
Step 2 Step 3 Step 4
Convoy 1 clears Convoy 2 is about Gates move at mean
one-way channel. to enter one-way tide as Convoy 2 is
channel from the between them and
Atlantic. moving toward the
Pacific.
11:58 AM
PACIFIC TIDE TRACE
ROUTE 10
SINGLE-LANE
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
18.6-HOUR CYCLE
FIGURE 20-1a
V-226
PM
ATLANTIC OCEAN
CONVOY 3
eee
—apescusesusaseeue
Step 5
Convoy 2 clears
one-way channel as
convoy 3 starts to
enter it.
ao ee eee ee Ss
Step 6
Gates move at mean
tide as Convoy 3 is
between them and
moving toward the
Atlantic.
9:43 PM
=x
o
o
oc
a
a
CHANNEL
Two lanes
DESIGN CHANNEL
Two lanes
APPROACH
CHANNEL
~ 3:00 AM
Two lanes
Convoy 1b
eeeoeas
Convoy 1a
|
Step 1
Convoys 1a and 1b
are in the two-lane
bypass section
about to enter the
one-lane sections as
the gates shift at
mean tide.
6:07 AM
Tidal
e@eeeeoe
Convoy 2b
Step 2
Convoys 1a and 1b
clear the one-lane
sections and con-
voys 2a and 2b
enter the one-lane
sections behind
them.
Gates
PACIFIC
ATLANTIC OCEAN
Step 3
Convoys 2a and 2b
are now entirely
within the bypass
section approaching
the gates which shift
on the mean tide as
they approach.
I
9:15A
ROUTE 10
BYPASS
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
6.2 HOUR CYCLE
FIGUR
E 20-1b
V-227
OCEAN
PACIFIC TIDE TRACE
PM
Convoy 3a
>
0000000000 >
Convoy 3b
Wee = = =
Step 4
Convoys 2a and 2b
clear the one-lane
sections and con-
voys 3a and 3b
enter the one-lane
section behind
them.
I
12:22 PM
0000000000 D>
AMMEN NAN NNN Ns
Step 5
Convoys 3a and 3b
are now entirely
within the bypass
section approaching
the gates which shift
on the mean tide as
they approach. This
is identical to Step
1.
EXTENDED
APPROACH CHANNEL
DESIGN CHANNEL
APPROACH CHANNEL
3:00 a.m.
AM
3{fI\|e
8 °
2
Ss e
= eo
> =
S *| >
oat es
: 5
= oe
> o
S e
é e
e
e
e
e
a
Step 1
Gates move at mean
tide as convoys 1a
and 1b are between
them and moving
toward the
approaches.
>
=
C3
eceoeeeveeee eo of
Convoy 2a |
—W@ sseeeee eee ee
Convoy 2b
Se
Step 2
Convoys 1a and 1b
have cleared gated
reach, and convoys
2a and 2b are about
to enter.
Tidal
Gates
AM
Se
ATLANTIC OCEAN
—Wkheeseeseeeeeeeee ee
PACIFIC OCEAN
Step 3
Gates move at mean
tide as convoys 2a
and 2b are between
them and moving
toward the
approaches.
ROUTE 10
TWO-LANE
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
6.2-HOUR CYCLE
FIGURE 20-1c
V-228
PACIFIC TIDE TRACE
zu
=
&9
Convoy 3b
EE —$<$<—_
ee ee eee ee
.
. 2
ae 7|°
7| >
alee
a 7| 2
s\5
a
a Alle
7
es 7
a7
me
7
a ¢
a3
s ¢
4
a 7
Step 4
Convoys 2a and 2b
have cleared gated
reach, and convoys
3a and 3b are about
to enter.
al
pe Cee
NNANNANANSNS SSSA ASN ANAS SNS AB
“s
Step 5
Gates move at mean
tide as convoys 3a
and 3b are between
them and moving
toward the
approaches.
3:28 p.m.
Allowable
Current and
2 knots:
Single
Bypass
Two-lane
3 knots:
Single
Bypass
Two-lane
4 knots:
Single
Bypass
Two-lane
Canal
Configuration®
Single
Bypass
Two-lane
Annual Transits
at 20 Hours
Configuration? Average TICW
TABLE 20-1
35,000 60,000
38,000 12 Cc
56,000 6.2 Cc
114,000 5.5 5.5
45 000 14 Cc
56,000 6.2 Cc
114,000 5.5 5.5
66,000 12 16
57,000 6.3 37
195,000 5.0 5.0
Estimated Incremental
Incremental Design and
Construction Construction
Cost (W/Gates)@ Time@
$2,880,000,000 14 years
460,000,000 4 years
1,520,000,000 7 years
ROUTE 10 CAPACITY-COST DATA FOR DESIGN CHANNELS
Average Ticw? in hours at given
Number of Transits per Year:
100,000
Fixed O&M
Costs/Y ear®
$35,000,000
34,000,000!
41,000,000
4Single denotes a 36-mile single-lane channel; bypass denotes a 36-mile single-lane channel
with a centrally located 14-mile-long bypass; and two-lane denotes a combination of two
parallel single-lane channels and extended two-lane approach channels.
TICW is time in canal waters, a combination of waiting time and transit time.
“Capacities cannot be achieved for the stated configuration or require a TICW of over 40 hours.
Costs and time for the bypass configuration are the additional costs and time over and above
those for the basic single-lane configuration; costs and time for the two-lane configuration
are over and above those for the bypass configuration.
Variable operation and maintenance costs would average about $640 per transit.
The lower cycle times associated with the bypass configuration Jead to more efficient use
of operating personnel.
V-229
CHARACTERISTICS OF ROUTE 10 CONFIGURATIONS®
Capacity
Average time
in canal
waters (TICW)
Navigation
Flexibility
of operation
Expansion
Capacity at
higher limit-
ing current
Single-lane Configuration
TABLE 20-2
Bypass Configuration
Would slightly exceed the initial transit Would approach year 2040
requirement (35,000 transits per year)
at 20 hours average TICW.
12 hours at 35,000 annual transits.
Ship speed must be regulated to
match tidal check operation.
Capacity, transit time, cycle time
and TICW would be restricted
by tidal check operation. Flexibility
would improve with higher
acceptable currents.
Could be expanded to bypass
configuration without serious
interference with traffic.
Would exceed year 2040 transit
requirement at 4 knots.
transit requirement (60,000
transits per year).
6.2 hours at 35,000 annual
transits.
Ship speed and spacing must
be programmed carefully to
fit the maximum number of
ships into the bypass
sections in each gate
operation cycle. Unchecked
currents would be higher
than for other configurations.
Convoy size would be limited
as long as the bypass is used,
but the canal may be used in
a single-lane configuration.
Capacity, transit time,
cycle time and TICW would
be restricted by tidal check
operation.
Could be expanded to two-
lane configuration without
serious interference with
traffic.
Relaxing the current limita-
tion would not increase
transit capacity.
Two-lane Configuration
Would exceed foreseeable
requirement.
5.5 hours at 35,000 annual
transits.
Ship speed must be set to
match tidal check operation.
Configuration requires the
most travel in a two-lane
reach.
Great flexibility would exist
despite the need to use
tidal gates.
No foreseeable need.
Would exceed any foresee-
able requirement at 2
knots or above.
Based on the design channel and, except where specifically stated, a maximum current of 2 knots. Tidal check gates
would be in continuous use.
method of operation. To allow for the possibility that these current limitations might be
unduly restrictive, a third gate sill would be constructed at the Atlantic end to facilitate
subsequent installation of another tidal check that could be used in conjunction with the
check on the Pacific side to permit maximum current velocities to reach 3 or 4 knots,
thereby increasing the canal’s capacity.
Geology: The alinement passes through two markedly different geologic regions. The
area from the Pacific shore to the southern portion of the Chagres basin is an igneous
complex composed of basalt flows intercalated with highly altered tuffs and agglomerates.
This area, which includes the Continental Divide, contains local basalt intrusives and
V-230
extrusives and is bordered by thick deposits of muck in the littoral swamps and lowlands.
Excavation of the northernmost 10 miles of the alinement, lying between Gatun Lake and
the Atlantic coast, would encounter only sandstone formations. In Gatun Lake and along
the coastlines these sedimentary rocks are mantled by thick deposits of muck.
The geologic characteristics of the divide are significant, since about 60 percent of the
total excavated volume would be from this sector. To enhance the reliability of Route 10
cost estimates, the Commission undertook a geologic exploration program, concentrated
primarily in this reach. The geology of the divide area, shown in profile in Figure 20-2, is
extremely complex structurally. It is the result of intermittent volcanic activity and a series
of north-south normal faults controlled by regional tectonic forces.
Geologic samples taken during the exploration show wide variations in strength,
indicating that channel side slopes required for stability within the divide reach would also
vary through a wide range. Where sound rock extends well below channel depth, excavation
could be based on slope criteria established for high quality rock. In other areas, including
the highest portions of the divide, the massive basalt cap and underlying basalt flows do not
extend to the bottom of the cut. The basalt is underlain by or intercalated with softer rocks,
including altered volcanics which exhibit the weakness and general characteristics of clay
shale. Where these weaker rocks would be exposed by excavation, slope design would have
to be based on criteria established for soft rock.
The remainder of the land cut from the foothills of the divide northwest across Gatun
Lake into the Atlantic would be through sedimentary rock of the Chagres, Gatun, and
Caimito formations. Elevations in this area reach a maximum of 360 feet. Design of the
slopes in these sandstone formations could be based upon criteria for intermediate quality
rock. As evidenced by the Third Locks cut, made through the Gatun formation during
1939-1942, these rocks would stand on relatively steep slopes. The Chagres and Caimito
formations were not exposed in the Third Locks excavation but they closely resemble the
Gatun formation geologically and could be excavated on similar slopes.
The Atlantic approach consists largely of Chagres sandstone; the reach across Gatun
Lake consists of Caimito and Gatun sandstone covered by thick deposits of muck; and the
Pacific approach consists of intrusive basalt and soft altered volcanic rocks. Cuts in these
sections would be relatively shallow.
Excavation: The total quantity of material excavated along Route 10 would be about
1.9 billion cubic yards. An open-pit mining/rail haul system would be the least costly
method for accomplishing most of this work. Shovel excavation with truck haul could be
used in the higher elevations. The general excavation plan upon which estimates were based
is shown in Figure 20-3.
Apart from the unprecedented amount of material to be removed, the only unusual
feature of Route 10 excavation operations would be the construction of massive barrier
dams built across relatively narrow reaches of Gatun Lake. These would allow work areas to
be unwatered to permit excavation in the dry over most of the route. The cross section of
the dams is shown in Figure 20-4 along with their location. Initially, hydraulic pipeline
dredges with 27-inch discharge lines would remove as much as 50 feet of muck from the
lake bottom under the dam sites to expose competent rock. Fill would then be placed by
trucks and rail cars working out into the lake from the shorelines and dumping along a
V-231
ROUTE 10
1400+00
1800+00
PACIFIC
BARRIER
DAMS
PLAN
GATUN LAKE
4
3
334 -NOILVA313
° °o
200
0
1550
1500
1450
1400
STATIONS
$ 3 8
13
41334 —NOILVA313 o
° ° ° o °
1
PACIFIC OCEAN
a ee
34-NOIN1VA313
1700 1750 1800
STATIONS
1650
1600
LEGEND
EXTRUSIVE BASALT
MUCK, ALLUVIUM,
AND WEATHERED ROCK
z
w
a
«
2
a
4
w
>
°o
INFERRED CONTACT
a
eT SOFT ALTERED VOLCANICS
INFERRED FAULT
r
a)
<
a
<
a
w
2
o
2
«
-
z
GEOLOGIC PROFILE
CONTINENTAL DIVIDE
ROUTE 10
2
FIGURE 20
V-232
ELEV.—FEET
DIVIDE
400
300
200
GATUN LAKE
100 PACIFIC
\ DISTANCE—MILES
GM stove EXCAVATION—TRUCK HAUL
===]|SHOVEL EXCAVATION—RAIL HAUL
[St] DREDGING
Generalized Excavation Methods
Route 10
FIGURE 20-3
V-233
2,000-foot advancing face. Although there is no precedent for constructing a dam of this
size in this manner, it appears entirely practicable for this project. There is ample precedent
for excavation and fill placement in water depths comparable to those in Gatun Lake.
Areas which could not be excavated economically in the dry would be excavated with
floating equipment. Hydraulic pipeline dredges would remove muck and soft rock in the
Atlantic approach and across Gatun Lake. Hopper dredges would be used for the soft
materials in the Pacific approach, while barge-mounted draglines would excavate the harder
materials.
Excavation alone would cost about $2.0 billion, including $50 million for barrier dam
construction. Quantities of materials removed, by type, would be:
Type of material Cubic yards Percent
Common 390,000,000 21
Soft rock 830,000,000 44
Medium rock 180,000,000 10
Hard rock 470,000,000 25
Total 1,870,000,000 100
Spoil disposal areas: Adequate spoil disposal areas would be available because of the
undeveloped nature of most of the land around Route 10 and the accessibility of Gatun
Lake and the ocean areas immediately adjacent to the canal’s terminals. Most of the material
would be removed by open-pit mining/rail haul operations and would be deposited on land
presently covered by jungle growth. This would involve the least total cost and would
minimize dumping in Gatun Lake, where ecological values might be affected, and in the
ocean, where operations could be hindered by rough water and shallow depths.
Stream diversion: Streams affected by construction of the canal along Route 10 would
include the Trinidad and Ciri Rivers (drainage areas totalling about 288 square miles) and
Cano Quebrado (drainage area about 70 square miles). They would be canalized and
diverted to the Caribbean by way of the Lagarto River at whose mouth a dam and a short
diversion channel would turn the discharge of the streams away from the canal’s terminus.
The Caimito River (drainage area about 127 square miles) would discharge over a spillway
directly into the canal. Concrete weirs and drop inlet structures would be constructed
wherever major changes in natural stream slopes occur. Flood diversion plans are shown on
Figure 20-5. The total cost of flood control and diversion facilities is estimated to be
approximately $20 million.
Harbor facilities: Requirements for new port facilities would not be extensive, since
those now existing at Cristobal and Limon Bay on the Atlantic coast and at Panama and
Balboa Harbor on the Pacific could be adapted to serve Route 10. These facilities would
require enlargement as traffic increases. Portions of the channels and harbor areas would
have to be deepened to accommodate larger vessels, but it would not be necessary to
provide docks for ships of more than 40-foot draft, since protected mooring areas would
V-234
CARIBBEAN
SEA PACIFIC
“<"\ OCEAN
(DRAWDOWN SIDE) |
GATUN LAKE
+100
=m=
ELEV.—FEET
=100 SELECTED
IMPERVIOUS FILL
BARRIER DAM CROSS-SECTION
ROUTE 10 —BARRIER DAMS
FIGURE 20-4
V-235
suffice. Wharves and miscellaneous administrative and storage buildings would be built at
the canal terminals. The general location of harbor facilities is shown on Figure 20-5; their
cost would be about $37 million.
Also shown in Figure 20-5 are locations of breakwaters on the Atlantic side and of a
jetty on the Pacific. These structures would be built with rock excavated from the canal.
The breakwaters would shelter the harbor from northeasterly storms, while the jetty would
protect the approach channel from westward littoral drift.
Tidal checks: The costs of constructing and operating tidal checks are included in all
estimates. Several types of gates have been proposed; these are shown and discussed in
Chapter 8. In addition to fabricating the gates, construction of tidal checks would entail
placing the sills, providing side wall recesses into which the gates would fit when open, and
installing control mechanisms. The cost of the tidal checks, estimated to be about $70
million, includes all below-water construction required for alternate current limitation
options.
Conversion: The construction of barrier dams to isolate Route 10 from Gatun Lake
would allow operation of the sea-level canal without physically affecting the Panama Canal.
No special construction would be required to convert operations from the lock canal to
Route 10.
Supporting construction: A number of items would be required to support the
construction operations. These include health and sanitation facilities, housing, highways
and bridges, clearing and relocations, and the installations needed for operating and
maintaining the canal. The total cost of these items would be about $247 million.
— Health and sanitation: Experience with large construction projects in the tropics
emphasizes the need for a vigorous preventive medicine program with stringent
sanitary measures. This program must begin during preconstruction planning,
continue throughout the entire construction period and carry on into the
operational phase. Particular attention should be given to immunization, water and
sewage treatment, food service sanitation, insect and rodent control, water
drainage, area sanitation, waste disposal, and health education. Immunization
would be directed primarily against yellow fever, smallpox, typhoid fever,
poliomyelitis, and tetanus. Malaria prevention would have a high priority.
An extensive medical support plan would be instituted at the start of the project
and phased into post-construction operations. Hospital support would be based at
existing facilities in the Canal Zone where an estimated additional 50 beds would
be needed for the construction force, including dependents. A dispensary would be
established at each end of the route to provide medical service to its area; first aid
stations would be set up at the major construction sites. The dispensaries would
continue in operation at reduced levels after the completion of construction.
Medical support would be designed especially to care for construction accidents
and to alleviate the effects of malaria and other parasitic diseases, enteric
infections, skin diseases, and other tropical ailments. Both medical support and
preventive medicine programs would have to be coordinated closely with Canal
V-236
CARIBBEAN
SEA
AREA OF aa
COVERAGE
Pe CAUR: PaB BE oAoNy iS BVA
ATLANTIC BREAKWATERS
LOCATION MAP
SCALE IN MILES
0 50
50
PAN AMERICc,
ajrN — AN Hwy
BALBOAY ——
re,
cf
By) .
S LA CHORRERA
PUERTO CAIMITO
PANAMA CITY
‘
N
PACIFIC TOWNSITE PACIFI
AND HARBOR FACILITIES JETTY
a
—_—-s— Vv
=
TR
TABOGA ISLA -)
O
ae
NE
PAC dad CC. 0 C EAN
, TABOGUILLA ISLAND
ROUTE 10 FLOOD CONTROL AND SUPPORT FACILITIES
THE CANAL ZONE AND VICINITY
FIGURE 20-5 : SCALE IN MILES + WDB Gi
Se re
Zone and Panamanian authorities, since the success of the programs would depend
in large part on existing parallel efforts carried on by these authorities. Costs
associated with health and sanitation are estimated to be about $24 million.
Housing and related support requirements: Facilities required for construction and
operating personnel would include housing, utilities, and those needed to provide
community services. During the construction phase, project personnel would be
furnished housing comparable to that commonly available at long-term construc-
tion projects in the United States. Maximum use would be made of available
housing in the Canal Zone and its immediate vicinity. Permanent facilities required
for operating the canal, which also could be utilized during the construction phase,
would be built so as to avoid duplication. Figure 20-5 includes possible sites for
housing facilities. These communities would cost about $94 million.
Highways and bridges: Provision would be made for a road network consisting of a
transisthmian highway parallel to the alinement to assist in operating and
maintaining the canal, and for secondary roads required during construction. The
transisthmian highway would be an all-weather two-lane road running east of the
alinement and crossing Gatun Lake on the barrier dam. It would be used to support
both construction and subsequent operation and maintenance activities. A
high-level highway bridge would be built at the Pan American Highway crossing of
the sea-level canal. Neither large airfields nor permanent railroads would be
included in the project. Figure 20-5 shows the proposed locations of the roadnet.
The cost of providing it is estimated to be about $41 million.
Clearing and relocations: The total cost of this item, $16 million, is attributable
almost entirely to clearing, since few relocations are required on this route.
Operation and maintenance facilities: Facilities (e.g., roads, bridges, and townsites)
provided for construction would be used to the maximum extent practicable for
the operation and maintenance of the sea-level canal. Additionally required
operating facilities would include tugs, aids-to-navigation, communications and
pilot facilities. A fleet of tugboats would be needed to assist larger ships in
operating safely and to attain required transiting capacity. Maintenance facilities
would include buildings, yards, and docks for supporting dredging operations and
ship salvage. Hydraulic and mechanical dredges used in the construction phase
would be utilized to the maximum extent possible as maintenance equipment. The
total cost of new operating and maintenance facilities would be approximately $72
million.
Schedule: The schedule developed for the design and construction of a canal along
Route 10 (Figure 20-6) provides a 2-year design phase preceding the start of construction.
Preparatory work, such as clearing, relocations, highways, and initial construction of
townsites and power distribution systems, would start about the beginning of the third year.
Channel excavation would start at the beginning of the fourth year.
Personnel: Figure 20-6 also shows personnel requirements for the design and
construction of a canal on Route 10. Personnel concerned with the operation of the canal
after construction would be of two types: those who operate the canal, and those who
V-238
sm af fo [» [ef | =| |
(S$ MILLIONS)
eer I
ESIGN AND
CONSTRUCTION 2590 4460 4460 | 4310 3790 3790 3780 3630 3390 | 2470
PERSONNEL
es 1630 | 2070 2150 2150 | 2110 2010 | 2010 _| 2010 1970 | 1220 |
ENGINEERING,
DESIGN, SUPER;
VISION & ADM.2
($190,000,000)
CHANNEL
EXCAVATION
($2,030,000,000)
FLOOD CONTROL
($20,000,000)
HARBOR FACILI-
TIES & ANCHOR-
AGE AREAS
($37,000,000)
TIDAL CHECK
FACILITIES
($70,000,000)
SUPPORTING b
CONSTRUCTION
($247,000,000)
4Width of bar shows relative amount of activity for each major construction item. ; Se
Includes roads, bridges, housing, clearing, relocations, area sanitation and health and operation and maintenance facilities.
ROUTE 10 COST, PERSONNEL AND CONSTRUCTION SCHEDULE
FIGURE 20-6
support its operation. Initially, the canal operating personnel would number 2,200 and the
supporting group 890. Personnel requirements would grow with the number of transits as
demands for traffic control, piloting, dredging, and tug services increase.
Cost summaries: The estimated cost of constructing a 36-mile single-lane canal with
tidal checks on Route 10 is about $2.9 billion.
The costs of the principal elements are:
Channel excavation $2,030,000,000
Flood control 20,000,000
Harbor facilities 37,000,000
Tidal checks 70,000,000
Supporting construction 247,000,000
Subtotal (rounded) 2,400,000,000
Contingency (12%) 290,000,000
Subtotal 2,690,000,000
Engineering, design, supervision,
and administration (7%) 190,000,000
GRAND TOTAL $2,880,000,000
V-239
Addition of a bypass to the basic plan would increase this figure by about $460 million to
an estimated total cost of $3.3 billion.
A schedule of costs by year is shown in Figure 20-6.
Real estate: The basis for estimating the value of real estate acquisitions on all proposed
routes has been discussed in Chapter 9. Most of the land required for Route 10 is owned by
the Government of Panama, although some 2,000 people now occupy parts of it. The total
value of necessary real estate rights for the approximately 100 square miles of land that
would be permanently acquired, or through which permanent or temporary easements
would be obtained, is estimated to be about $24 million. This amount is not included in the
summary table.
Environmental changes: Construction of the canal would alter the ecology of the region
from an upland, sparsely cultivated agricultural ecosystem to a more complex one,
containing agricultural land, salt water and contact zone components. These changes,
although drastic, are not expected to adversely affect the ecological balance or the ability of
local inhabitants to utilize natural resources in the immediate area of the canal. Peripheral
areas required for spoil and construction operation need be affected only temporarily, since
encroachment of vegetation following construction would be very rapid in the tropical
climate.
The net flow of sea water through a canal along Route 10, if tidal checks are not used,
would average about 45,000 cubic feet per second* from the Pacific Ocean to the Atlantic.
While this volume of water is probably too small to produce significant widespread changes
in the physical characteristics of the marine environments, other potential effects deserve
attention. The sea-level canal would provide a limited pathway for mixing biota from
different ecosystems. Compared to the Pacific, the Atlantic system exhibits greater habitat
diversity and, for certain groups of organisms, appears to have a richer fauna with more
dominant competitive characteristics. Concern has been expressed that some species
eventually might become extinct if a biotic barrier is not installed in the canal. Although not
designed specifically as biotic barriers, tidal gates could reduce the net transfer of water
between the oceans to nearly zero and could provide an effective, but not perfect, barrier.
Even if no other mechanical barrier were installed, turbidity of the canal water and inflow
of fresh water from the Caimito River and smaller streams could be expected to inhibit
transisthmian migration of marine life.
Operation and maintenance costs: Fixed O&M costs for Route 10 would average about
$35 million per year, with periodic fluctuations caused by replacement of major facilities.
Variable O&M costs would be about $640 per transit, including the cost of operating the tug
fleet. These costs may be combined into a single total annual operation and maintenance
cost which, at 35,000 transits per year, would be $57 million.
*By comparison, the average flow of the Missouri River past Kansas City is 55,000 cubic feet per second.
V-240
Operation with the Panama Canal: Operating Route 10 in conjunction with the Panama
Canal offers several advantages. The lock canal could function initially as an alternate and
eventually as a supplement to the sea-level canal. It would be advantageous to retain the
Panama Canal in operable status until the stability of flood control structures and of the
sea-level canal slopes seems reasonably assured. Although the risk of slides on Route 10 and
the duration of resultant interference to traffic cannot be stated explicitly, the availability
of the Panama Canal would greatly reduce their consequences.
Possibly more important than its availability in time of emergency would be the
additional capacity that the lock canal could bring to a system including both the new and
old routes. If ship transits were restricted indefinitely to currents of no more than 2 knots,
limiting the capacity of Route 10 to about 38,000 annual transits, the Panama Canal could
provide sufficient additional capacity to enable the system to meet requirements through
the year 2040. Although capable of handling only ships smaller than 65,000 dwt, the
Panama Canal could accommodate most of the ships passing through the system. Controlled
scheduling would direct arriving ships to the appropriate canal for transit.
If Route 10 and the Panama Canal were incorporated into a single system, the two
canals could operate as two divisions of one organization.
The ability of the Panama Canal to function effectively as a supplement to Route 10 far
into the future depends on the useful life remaining to it. Its duration cannot be predicted.
Now nearly 60 years old, the canal’s locks have attained the age at which many engineering
facilities are considered obsolete. There is no evidence, however, that the locks cannot
continue in operation for several decades.
V-241
V-242
CHAPTER 21
ROUTE 14S
The alinement and general characteristics of Route 14S (Figure 21-1) have been
discussed in Chapter 15.
Capacity: Three channel configurations have been considered for Route 14S. Each
configuration includes the design channel between two-lane approach channels which have a
1,400- by 85-foot cross section. The bypass configuration adopted on Route 10 was not
considered suitable for Route 14S because the topography precluded effective siting of a
bypass. Expansion of the canal’s capacity would be accomplished for the most part through
progressive shortening of the single-lane section by extending the two-lane Atlantic
approach across Gatun Lake. In order of increasing capacity and construction costs, the
three configurations, identified by the length between approach channels, are:
— a 33-mile single-lane section;
— a24-mile single-lane section; and,
— two parallel 19-mile single-lane sections.
All of these options would be constructed with tidal check gates to limit the maximum
current of 2 knots. The location of the tidal checks would vary with the configuration and
the acceptable maximum current velocities. Methods of operation with tidal checks located
for a 2-knot maximum current are shown in Figures 21-2a, -2b, and -2c. Table 21-1 gives the
capacity and cost data for the configurations at 2-, 3-, and 4-knot limiting currents. The
capacity of the least costly alternative, with currents limited to 2 knots, would exceed the
initial design criteria slightly. Other characteristics of the three options are compared in
Table 21-2.
Based on the data and characteristics presented in the tables, the configuration
preferred for initial construction on Route 14S would be with the 33-mile design channel
and with tidal checks 24 miles apart to limit currents to 2 knots. Additional gate sills
would be installed during construction to permit regulation of maximum currents at 3 or 4
knots, should experience show that a 2-knot limitation is too restrictive.* If navigation in a
4-knot current were found acceptable during actual operation, this configuration could
provide a capacity approaching the 60,000 annual transit requirement for the year 2040. If,
on the other hand, operation in currents over 2 knots were to prove unsafe, any capacity
increase would have to come through additional construction or operational improvements
not now foreseen.
*The optimal gate locations for both 3-knot and 4-knot current limitations are 33 miles apart at the ends of the one-way
section.
V-243
CARIBBE
CVA RT -B Be Eran Saha
AREA OF
| COVERAGE
LOCATION MAP
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PACT PEC (ene
ROUTE 14 SEPARATE DIVIDE CUT
THE CANAL ZONE AND VICINITY
SCALE IN MILES 5
V-244 : ; : i FIGURE 21
es
DEPTH IN FATHOMS
APPROACH
CHANNEL
DESIGN CHANNEL
ONE LANE
APPROACH
CHANNEL
TWO LANE
AM AM AM PM
N
>
Oo
>
Zz ATLANTIC OCEAN
oO
“@Bscseseean
TIDAL GATES
—@pcceceacea
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a
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és
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its
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20S
| ar
Vi
PACIFIC OCEAN
Step 1 Step 2 Step 3 Step 4
Gates move at Convoy 1 has Gates move at Convoy 2 has
mean tide as con- cleared one- mean tide as con- cleared one-way
voy 1 is between way channel and voy 2 is between channel and con-
them and moving convoy 2is about them and moving voy 3 is about
toward the to enter it toward the to enter it from
Atlantic. from the Atlantic. Pacific. the Pacific.
12:22 PM
PACIFIC TIDE TRACE
ROUTE 14
33-MILE SINGLE-LANE
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
12.4-HOUR CYCLE
FIGURE 21-2a
V-245
.
Sees eS Ss ep
Step 5
Gates move at
mean tide as
convoy 3 is be-
tween them and
the Atlantic
3:28 PM
Ce
ATLANTIC OCEAN
EXTENDED
APPROACH CHANNEL
CONVOY 2
—Wh cose seseeeeeee ee
TIDAL GATES
Single lane
=
a
2
o
iS
=
=
a
Cc
2
>
So
>
2
So
oOo
DESIGN CHANNEL
Seeseeeep eases aeanaes
==
2
s
<=
= = Al
o Palo
=x s =>
So s gj
S aS
z 2 He
s
. ail
s I
.
PACIFIC OCEAN oO’
Step 1 Step 2 Step 3 Step 4 Step 5
Gates move at mean
tide as convoy 3 is
Gates move at mean
tide as convoy 1 is
Convoy 1 has
cleared one-way
Gates move at mean
tide as convoy 2 is
Convoy 2 has
cleared one-way
between them and
moving toward the
Atlantic.
channel and convoy
2 is about to enter it
from the Atiantic.
between them and
moving toward the
Pacific.
channel and convoy
3 is about to enter it
from the Pacific.
between them and
moving toward the
Atlantic.
6:07 AM 3:28 PM
PACIFIC TIDE TRACE
ROUTE 14
24-MILE SINGLE-LANE
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
12.44HOUR CYCLE
FIGURE 21-2b
V-246
EXTENDED
APPROACH CHANNEL
TWO LANE
DESIGN CHANNEL
TWO LANE
APPROACH
CHANNEL
TWO LANE
3:00 A.M.
CONVOY 1b
Bseseanease s
o
4
o
a
°
£
eC
.
D
c
o
iJ
>
Oo
>
2
9
oO
Step 1
Gates move at
mean tide as
convoys 1a and
1b are between
them and mov-
ing toward the
approaches.
TIDAL
>
=
AM
os
ATLANTIC OCEAN
|
C3
OD:
CONVOY 2a
——meceocoeoeooe
eaeeeeenees os
eee es = =
CONVOY 3a
—=— —
GATE
ame ees ss oS
©0000 CCC?O
NANNANANASSSASANS SBOE
e
°
°
e
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°
e
¢
e
eo
°
°
°
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v
NANA AANA ANANANS SAS BR =
|
A °
i °
| ®
I PACIFIC OCEAN 0
2
re 5 Ze
i> 5
Oo @ oO
i = 0 2
Fe) V8
Step 2 Step 3 Step 4 Step 5
Convoys 1a and Gates move at Convoys 2a and Gates move at
1b have cleared mean tide as con- 2b have cleared mean tide as con-
gated reach, and voys 2a and 2b are gated reach, and voys 3a and 3b
convoys 2a and 2b between them and convoys 3a and are between them
are about to Moving toward 3b are about to and moving toward
enter. the approaches. enter. the approaches.
6:07 AM 9:15 AM pap corn esamae PM
PACIFIC TIDE TRACE
ROUTE 14
TWO-LANE
PLAN OF OPERATION
2-KNOT ALLOWABLE CURRENT
6.2-HOUR CYCLE
FIGURE 21-2c
V-247
TABLE 21-1
ROUTE 14S CAPACITY-COST DATA FOR DESIGN CHANNELS
Average TIcw? in Hours at Given
All bl Annual Transits
ees aa at 20 eae Number of Transits Per Year:
Configuration® Average Ticw> 35,000 60,000 100,000
2 knots:
33 mi single-lane 39,000 9.9 Cc Cc
24 mi single-lane 55,000 8.3 c Cc
19 mi two-lane 82,000 6.1 6.3 Cc
3 knots:
33 mi single-lane 42,000 15 Cc Cc
24 mi single-lane 55,000 8.3 Cc c
19 mi two-lane 82,000 6.1 6.3 Cc
4 knots:
33 mi single-lane 59,000 12 23 c
24 mi single-lane 58,000 8.5 29 c
19 mi two-lane 113,000 49 4.9 12
Estimated Design and
Canal Construction Construction Fixed O&M
Configuration® Cost Time Costs/Year®
33 mi single-lane $3,040,000,000 16 years $34,000,000
24 mi single-lane 430,000,000 4 years 33,000,000f
19 mi two-lane 1,670,000,000 7 years 40,000,000
4Configurations are given in length of design channel reach. Two-lane approaches at both
ends are provided. Tidal gates are placed at optimum locations.
TICW is the time spent in canal waters, a combination of waiting time and transit time.
°Capacities cannot be achieved for the stated configuration or require a TICW of over 40 hours.
Costs and time for the 24-mile single-lane configuration are the additional costs and time over
and above those for the basic 33-mile single-lane configuration. Costs and time for the 19-
mile two-lane configuration are over and above those for the 24-mile single-lane configuration.
©Variable operation and maintenance costs would average about $640 per transit.
The 24-mile single-lane configuration has lower costs because of improved efficiency.
V-248
Expansion
TABLE 21-2
CHARACTERISTICS OF ROUTE 14S CONFIGURATIONS
33-mile Single-Lane Channel
Would slightly exceed initial require-
ments (35,000 transits per year).
the year 2040 requirement.
Capacity could be increased 40%
by extending approaches. Ex-
pansion work would entail some
interference with transiting
ships.
24-mile Single-Lane Channel
Would approach year 2040
requirement. (60,000 tran-
sits per year).
increase for this configura-
tion. This configuration
requires that tidal gates for
3- and 4knot limiting cur-
rents be closer than opti-
mum spacing.
Capacity could be increased
50% by extending approaches
and providing a dual channel.
Expansion work would entail
some interference with trans-
iting ships.
19-mile Two-lane Channel
Would exeeed year 2040 re-
quirement by a third.
Average 9.9 hours at 35,000 annual transits. 8.3 hours at 35,000 annual 6.1 hours at 35,000 annual
time in transits. transits.
canal waters
(TICW)
Navigation Ship speed must be set to match Ship speed must be set to Ship speed must be set to
tidal check operation. Configura- match tidal check operations. match tidal check operation.
tion requires the most travel in a Configuration requires the
one-lane reach, the least in a least travel in a one-lane
two-lane reach. Unchecked currents reach and the most in a two-
would be the least of the three con- lane reach.
figurations.
Flexibility of Capacity, transit time, cycle time and Capacity, transit time, cycle Despite the need to use ti-
operation TICW would be restricted by tidal time and TICW would be re-_ dal gates, the complete
check gate operation. Flexibility stricted by tidal check gate two-lane capability makes
would improve with higher accept- operation. this the most flexible of
able currents for navigation. the three configurations.
Capacity at Negligible increase at 3 knots, but Increase in acceptable cur- Negligible increase at 3
higher accept- a 4knot limit with tidal checks rent velocity provides no knots, but 4knot limit
able currents would allow a capacity approaching significant capacity would provide a capacity
of over 100,000 transits
per year. This configuration
requires that tidal gates for
3- and 4-knot limiting cur-
rents be closer than
optimum spacing.
No foreseeable need.
“Based on the design channel and, except where specifically stated, a maximum current of 2 knots. Tidal check
gates would be in continuous use.
Geology: Route 14S is alined generally to take advantage of the low relief through
which the Panama Canal was excavated. The divide cut has been moved southwesterly about
1 mile to avoid the weakened slopes of the Panama Canal and to lessen interference with
existing canal traffic. Although shifting the alinement through this reach would increase
excavation volumes over those for Route 14C, it would eliminate many of the problems of
maintaining traffic in the existing canal throughout the excavation period.
The route crosses two major geologic areas. The first is an igneous complex, extending
from the Bohio Peninsula in Gatun Lake across the Continental Divide to the Pacific coast.
It consists of altered tuffs and agglomerates, but basalt flows and basaltic intrusions are
common. Tuffaceous sandstones, limestones, and shales are found locally. In the area
V-249
northwest of the Bohio Peninsula and in the lower Chagres Valley, the lithology is
considerably different, and consists of sedimentary sandstones of the Gatun and Caimito
formations. In Gatun Lake the Caimito formation is overlain by Atlantic muck. Thick muck
deposits also occur in the coastal lowlands and in shallows along both the Atlantic and
Pacific approaches.
To locate the best alinement, extensive use was made of the Panama Canal Company
records and previous studies, and a program of field explorations and geologic studies was
conducted. The program was concentrated in the Continental Divide reach which entails 60
percent of the total excavation and where the most difficult problems associated with
geologic structure and lithology would be encountered. Geologic formations with a history
of slides were sampled and tested to determine their physical properties for use in studies of
slope stability during and after excavation. Particular attention was given to the Cucaracha
and the Culebra formations in which numerous slope failures occurred during construction
of the Panama Canal. Cerro Gordo, an isolated peak rising to an elevation of 958 feet and
forming a portion of the divide, was also studied in considerable detail. The Route 14S
alinement, as shown on Figure 21-1, passes close to it. Excavation along the route would
require removal of about 300 million cubic yards of material from the north and
northeastern flanks of Cerro Gordo to preclude the possibility of massive slides capable of
blocking the canal. The alinement uses the excavations made as part of the Third Locks
project at Gatun and Miraflores. A geologic profile of the divide cut is shown on Figure 21-3.
The most critical reaches of the divide are from Station 1650 to Station 1740, adjacent
to Cerro Gordo, and from Station 1780 to Station 1870, adjacent to Cerro Paraiso. In these
areas the Cucaracha clay shales are either exposed or underlie more competent basalts and
the Pedro Miguel agglomerates. The Cucaracha clay shales are noted for their poor stability
under high slopes and they have low residual friction angles (4 to 10 degrees). Relatively
high terrain within the limits of the excavation, complicated structure, and the Cucaracha
clay shales would present continuing threats to the stability of canal banks. To attain stable
conditions in these areas, initial slopes flatter than one vertical on ten horizontal might be
required.
Field explorations showed that a fault cuts diagonally through Cerro Gordo and that
the northeastern half of the hill is underlain by Cucaracha clay shales at depths shallow
enough to affect slope stability. The remainder of the hill is considered stable. Exploration
also indicated that Cerro Paraiso is underlain and flanked by the Cucaracha formation and
that most of this hill must be removed to conform to established soft rock slope criteria.
Geologic conditions are more favorable and elevations are relatively low in the
remainder of the divide reach. From Station 1500 to Station 1650, Las Cascadas
agglomerates and the La Boca formation are encountered. Both are low quality rocks for
slope design purposes, but they do not present serious problems because cuts in this reach
would be less than 300 feet deep.
Between Stations 1750 and 1770 is a reach of competent basalt and agglomerate which
would permit the use of slope criteria for high quality hard rock. The divide areas beyond
Station 1870 lie generally below 200 feet and much of the excavation would be in high
quality intrusive basalts. Several deposits of the La Boca formation would be exposed,
however, and slope criteria for rock of low quality would have to be used.
V-250
ELEVATION — FEET
-200
ROUTE 14S
~. CONTINENTAL
oe DIVIDE >
PA CIFIC
600 x wy
oS GATUN LAKE NORTHEAST 9
= FLANK OF x
A00 g CERRO cok be cS
x come 5
3 ee
Q
200 iG
-400
1500 1550 1600 1650 1700 1750
STATIONS
CERRO cod
ESCOBAR PACIFIC OCEAN
r ‘ CERRO PARAISO Or
SS 400 |
OK WwW
#8 2
AA cs 200 !
So
Ks. ple > voce 2
fa 4 <
an y pit ----.-k\\ GRADE Ss
para Ae i
3 | frie ty rm
ol i pe eT
-400
1800 1850 1900 1950 2000
STATIONS
LEGEND
OVERBURDEN, MUCK, ALLUVIUM,
AND WEATHERED ROCK (0 CUCARACHA FORMATION
LA BOCA FORMATION se PEDRO MIGUEL AGGLOMERATE
LAS CASCADAS FORMATION Fee PANAMA TUFF
CULEBRA FORMATION ——-— TOP OF SOUND ROCK
BAS OBISPO FORMATION = — INFERRED Genuer
BASALT AND ANDESITE LA INFERRED FAULT
GEOLOGIC PROFILE CONTINENTAL DIVIDE
ROUTE 14 SEPARATE
FIGURE 21-3
V-251
From the Atlantic end of the divide reach, about Station 1500, to the Bohio Peninsula,
Station 780, elevations average about 100 feet with several hills as high as 300 feet.
Formations in this area include the Bohio, the Caimito, and the Bas Obispo, all of which
have been intruded by basaltic dikes. Excavation experience with these rocks along the canal
has been favorable. All are of high or intermediate quality, capable of maintaining steep
slopes.
The alinement from Bohio Peninsula across Gatun Lake to the Atlantic approach cuts
through the tuffaceous sandstone, shales, and tuffs of the Caimito; siltstones; tuffs of the
Gatun formation; Bohio conglomerates; and igneous intrusions. All of these formations are
classified as intermediate quality rocks, and experience with the Third Locks cut in the
Gatun formation indicates that the application of intermediate quality rock slope criteria to
them would be appropriate. Elevations are low throughout this region of stratified rock.
Muck has been deposited to depths of over 225 feet in the old river channels of the
Chagres River which are incised in the Caimito formation in the area now inundated by
Gatun Lake. Muck is also found along the Pacific coastal plain, where it reaches depths of
over 50 feet, and along the Atlantic shoreline. Extremely flat slopes would be required in
these unconsolidated sediments wherever they lie above water level.
Excavation: The total quantities excavated along Route 14S would amount to about
1,950,000,000 cubic yards. The excavation has been divided into two reaches for analysis —
the first through Gatun Lake, and the second through the divide. The requirement to
maintain navigation in the Panama Canal during the construction period would limit the
flexibility of operations along both reaches.
Across Gatun Lake the canal could be constructed by using dredges working from the
regulated lake level (average 85 feet), or by excavating mostly in the dry within areas
isolated by large cofferdams. Of these alternatives, the deep dredging plan presents the
fewest uncertainties, and has been adopted as the primary system in estimating the cost of
excavating the Gatun Lake reach. The systems considered suitable for this reach are shown
on Figure 21-4.
Muck would be removed from Gatun Lake down to depths as great as 170 feet below
the surface using 48-inch hydraulic pipeline dredges operating from the +85-foot lake level.
On the islands and peninsulas a shovel/truck haul system would be used to remove as much
material as possible in the dry. The remaining rock would be excavated in two phases. In the
first, dipper dredges would remove the material between elevations +90 and +15 feet. Then
35-cubic-yard barge-mounted draglines would excavate the remaining material to channel
grade. Excavated material would be hauled in bottom dump scows to spoil disposal areas in
Gatun Lake. Rock plugs would be left in the cut at either end of the lake to maintain the
water level until canal operations are converted to sea-level.
Massive flood control dams would be constructed with suitable material excavated from
the Gatun Lake reach. A layer of select material would be spread first to form a blanket
over the existing muck, after which spoil would be placed in successive underwater lifts to
an elevation +65 feet. The dams would be built with very flat slopes averaging about 1
vertical on 35 horizontal. After Gatun Lake is drawn down during the transition from
lock canal to sea-level canal operation, the crests of the dams would be raised to elevation
+73 feet. After the transition, the dams would maintain the remaining parts of Gatun Lake
V-252
ELEVATION—FEET
300
200
100
-100
ATLANTIC
GATUN
CONVERSION
SOs
DISTANCE — MILES
MMMM SHOVEL EXCAVATION-TRUCK HAUL
HYDRAULIC DREDGE EXCAVATION-PIPELINE REMOVAL
RQ DIPPER DREDGE EXCAVATION-SCOW HAUL
VI, BARGE-MOUNTED DRAGLINE EXCAVATION—SCOW HAUL
PROFILE-GATUN LAKE REACH—ROUTE 14 SEPARATE
FIGURE 21-4
V-253
at elevation +55 feet. The cost of placing the dams would not be significant because their
construction would provide the most economical way to dispose of spoil excavated from
Gatun Lake and the adjacent divide cut reach. A typical cross section of the dams is shown
on Figure 21-5. Their location is shown on Figure 21-1.
Through the divide reach the alinement is separated from the existing canal. This
permits effective use of a combination of excavation systems to achieve least cost. A
generalized excavation plan suitable for this reach is shown in Figure 21-6. Initial efforts
would involve lowering the hilltops along the alinement using truck haul since grades would
be too steep and distances too short for rail. As excavation at the higher levels is completed
and cuts are opened, truck haul would be replaced by rail haul. A shovel/rail haul system
would then be used down to elevation +90 feet for the 6 miles at the northwestern end of
the 13-mile reach and down to elevation +15 feet for the remainder. These bench elevations
and station limits were chosen to permit economical layout of the rail lines and to provide
sufficient material to construct the flood control dams in Gatun Lake. A dipper
dredge/scow haul system operating from the Gatun Lake level would move material from
the 6-mile reach between elevations +90 feet and +15 feet to the dam sites. A plug would
then be constructed near Mamei Point and the reach would be drained. Dipper dredges
would complete the cut from elevation +15 feet to project depth, working in from the
Pacific Ocean. Excavated materials would be hauled by bottom dump scows to spoil areas
in the ocean.
Hydraulic cutterhead dredges would remove the preblasted soft rock from the Atlantic
approach. On the Pacific side, hopper dredges would excavate the soft materials, while the
barge-mounted draglines would be used for harder materials.
Estimated excavation quantitites are shown in the following table:
Type of material Cubic yards Percent
Common 470,000,000 24
Soft rock 565,000,000 29
Medium rock 390,000,000 20
Hard rock 525,000,000 aT
TOTAL 1,950,000,000 100
The total cost of excavation would be about $2.2 billion.
Spoil disposal areas: Maximum use of land disposal areas is planned, except for the use
of spoil to construct dams in Gatun Lake. Where topographic conditions permit, upland
spoil disposal areas would be located adjacent to the canal alinement at a minimum distance
of 2,000 feet from the top of excavated slopes. Virtually unlimited area is available for spoil
disposal, except as restricted by the length of haul and the grades encountered. Ocean
disposal would be minimized because of haul lengths, occasional rough seas, and possible
interference with shipping.
V-254
ELEV. FEET
-100
fs
mee D
= TIRE RANDOM ROCK FILL |
MIGUEL
LOCKS
PLAN
J-e-rLoee CONTROL DAM
q-SEA LEVEL
' CANAL.
1
TOP OF SPOIL CREST OFDAM
DESIGN EL 65 EL.73
WS. ! 2000' |
EE 35 MINIMUM
WAY,
MUCK
SECTION
ROUTE 14 SEPARATE—FLOOD CONTROL DAMS
ROUTE 14 SEPARATE—FLOOD CONTROL DAMS
FIGURE 21-5
VEZ)
Stream diversion: The construction plan for Route 14S calls for lowering Gatun Lake as
far as possible without creating a large, potentially unhealthy inland swamp. An elevation of
55 feet would meet these requirements at minimum project cost. Separate reservoirs would
be formed on either side of the canal alinement by the flood control dams. The reservoir on
the west side would control the Trinidad and Ciri Rivers (drainage area 327 square miles),
while that on the east side would control the Gatun River (drainage area 166 square miles).
Both reservoirs would discharge into the Caribbean Sea. The Pedro Miguel Locks, Miraflores
Locks, and Miraflores spillway would be modified to serve as flood control structures,
handling the flow from the 540-square-mile drainage area of the Chagres River which would
be diverted down the alinement of the existing canal to discharge into Balboa Bay. The
Cano Quebrado and its tributaries (183 square miles) would be discharged through an inlet
structure into the canal. Figure 21-7 shows the major stream diversion facilities, which
would cost about $30 million.
Harbor facilities: Only a limited expansion of the port and harbor facilities existing at
Cristobal and Limon Bays on the Atlantic and Panama City and Balboa Harbor on the
Pacific would be required. The additional facilities would consist of anchorage areas at each
end of the canal dredged to the project depth of 85 feet to accommodate deep draft ships.
The two existing Canal Zone ports are well developed and could serve as depots supplying
the various services essential to shipping, such as repairing and bunkering. The general
locations of needed facilities are shown in Figure 21-7; their cost would be about $12
million.
Tidal checks: Cost estimates include the construction and use of tidal checks. Their
design would be identical to those discussed previously. They are estimated to cost
approximately $70 million, including below-water construction for the alternate current
limitation options.
Conversion: A specially planned and executed sequence of operations lasting from one
to three months would be required to lower Panama Canal operating water levels to sea level
and to open the sea-level canal for traffic. In this conversion period, two plugs (one at either
end of Gatan Lake) would be removed to allow the water level between the flood control
dams in Gatun Lake to be drawn down to sea level. Miraflores Lake and the remainder of
Gatun Lake would be lowered to +55 feet during this time. Concurrently, in the old lock
canal channel, an earth plug would be constructed near Gamboa to divert the Chagres River.
Throughout the drawdown period, all slopes would be observed closely to detect incipient
slides caused by the lowering of the water level and the effect of salt water on the slopes.
Figure 21-8 illustrates the sequence of conversion operations, which are estimated to cost
about $3 million.
Supporting construction: Items required to support the main construction effort would
include health and sanitation facilities, housing, highways and bridges, clearing and
relocations, and facilities needed for the operation and maintenance program. The total cost
of these items would be about $219 million.
V-256
ELEVATION—FEET
500
400
300
200
PACIFIC
OCEAN
26 28 30 32 34 36 38
DISTANCE—MILES
48
ee SHOVEL EXCAVATION—TRUCK HAUL
SHOVEL EXCAVATION—RAIL HAUL
HOPPER DREDGE EXCAVATION
N\A) DIPPER DREDGE EXCAVATION — SCOW HAUL
[A
(4 BARGE-MOUNTED DRAGLINE EXCAVATION-SCOW HAUL
PROFILE—DIVIDE REACH—ROUTE 14 SEPARATE
FIGURE 21-6
V-257
CARIBBEA
CAR.1T.B BEAN. SEA
AREA OF
| COVERAGE
PACIFIC OCEAN
LOCATION MAP
SCALE IN MILES
van
on a
oN
Ved A E
CONJROL DAM
Kh
ES
| v
RID P.
a)
e
Je
PAN AM.
aj ER AMERICAN Hy
A) Cremona ISLAND
as ie
PRO PERO Ore
ROUTE 14 FLOOD CONTROL AND SUPPORT FACILITIES
THE CANAL ZONE AND VICINITY
SCALE IN MILES !
V-258 5 0 5 10 FIGURE 21
res
DEPTH IN FATHOMS
a. START OF CONVERSION b.5 TO 15 DAYS
Lock canal abandoned. Water in Gatun and in sea-level Water in Gatun Lake and sea-level cut between conversion
cut between conversion plugs at el. 85. plugs has been drawn down to el. 55. Spoil at el. 65 shows
above Gatun Lake water surface as flood control dams.
c. 15 TO 30 DAYS d. 30 TO 90 DAYS
Water in sea-level canal drawn down to sea level, water Initial cut through conversion plugs and construction of
in Rio Pescado and Rio Chagres drawn down to el. 40. Chagres diversion plug completed. Sea-level canal ready for
Chagres diversion plug partially closed. Initial cut through traffic.
Mamei conversion plug partially removed.
ROUTE 14 SEPARATE SEQUENCE OF CONVERSION
FIGURE 21-8
V-259
=
— Health and sanitation: The requirements for health and sanitation measures on
Route 14S, and the program to provide them, are similar to those of Route 10. The
total cost for health and sanitation programs would be about $27 million.
— Housing and related support requirements: Housing and related requirements
would be essentially the same as for Route 10. The total cost of these facilities for
Route 14S would be approximately $110 million. Their proposed locations are
shown on Figure 21-7.
— Highways and bridges: The existing road network would be adequate. The Thatcher
Ferry Bridge on the Pan American Highway would provide the necessary canal
crossing.
— Clearing and relocations: Requirements for clearing are similar to those of Route
10. A number of minor relocations of utilities would be necessary; however, the
existing railroad would not have to be relocated, since it probably would be
abandoned upon completion of the sea-level canal, if not before. The total cost of
this item would be about $16 million.
— Operation and maintenance facilities: The need for constructing new facilities for
operating and maintaining the sea-level canal along Route 14 would be minimal.
Facilities provided to support the construction effort would be used to the
maximum extent possible, as would all existing facilities of the lock canal.
Requirements would be similar to those for Route 10 except that new pilot
facilities would not be needed. Maintenance facilities of the dredging division, now
located at Gamboa, would have to be moved. The total cost of operation and
maintenance facilities along this route would be about $66 million.
Schedule: A schedule under which this work could be accomplished is shown in Figure
21-9. It includes a 2-year preconstruction phase. This schedule is based on the assumption
that work on preparatory items, such as clearing, relocations, highways, and _ initial
construction of townsites and power distribution systems would start immediately
thereafter. Another year has been allowed for preparatory work, including mobilization of
equipment, before excavation begins.
Personnel: Manpower requirements for design and construction, including both
government and contractor personnel, are shown on Figure 22-9. Requirements for
personnel to operate the canal would be similar to those for Route 10. Initially, total
operating and support personnel would number 3050.
V-260
ANNUAL COST
pea Peo fee or Pm Poel oeof of w
Se 2 | 241 | 562 | 228 | 1292 609. | 1893 | 2155 | 2405 | 2620 | 2760 2972 | 3040
DESIGN AND
CONSTRUCTION 3110 | 4910 | 5110 | 5110 | 4520 3600 | 3430 | 2940 | 1980 | 1760 | 1340
PERSONNEL
1860 | 2240 | 2280 | 2280 reo | | 2070 | | s970 | 1020 | | 700 | Lana | 1100 | | 1000 |
4970 | 7150 | 7390 2 320'7) \Scecu ote (BoS200) p23 80,)) 4640 | 3120 | 2860 | 2340 UO
ENGINEERING,
DESIGN, SUPER:
VISION & ADM.2
($200,000,000)
CHANNEL
EXCAVATION
($2,210,000,000)
HARBOR
FACILITIES
($12,000,000)
TIDAL CHECK
FACILITIES
($70,000,000)
CONVERSION
FACILITIES
($3,000,000)
SUPPORTING b
CONSTRUCTION
($219,000,000)
Width of bar shows relative amount of activity for each item.
Includes area sanitation and health, townsites, clearing and relocations, and the construction of operation and maintenance facilities.
ROUTE 14S COST, PERSONNEL AND CONSTRUCTION SCHEDULE
FIGURE 21-9
Cost summaries: The total construction cost of the Route 14S configuration with a
33-mile, one-way channel and tidal checks is estimated to be about $3 billion. The principal
elements of this total and their costs are:
Channel excavation $2,210,000,000
Flood control 30,000,000
Harbor facilities 12,000,000
Tidal checks 70,000,000
Conversion facilities 3,000,000
Supporting construction 219,000,000
Subtotal (rounded) 2,540,000,000 —
Contingency (12%) 300,000,000
Subtotal 2,840,000,000
Engineering, design, super-
vision, and administration (7%) 200,000,000
GRAND TOTAL $3,040,000,000
A schedule of costs by year is shown in Figure 21-9.
V-261
Real estate: The basis for estimating the value of real estate acquisitions on all the
proposed routes has been discussed in Chapter 9. The total value of the approximately 110
square miles of land required along Route 14S is estimated to be about $2 million, based on
resource value, without considering treaty rights. All of this land lies within the present
boundaries of the Canal Zone. The small tracts in private hands are essentially unimproved.
Environmental effects: A sea-level canal on the Route 14S alinement would produce
ecological effects similar to those that might be expected on Route 10. The one significant
difference involves Gatun Lake. The 30-foot drop in surface elevation would reduce the
total water surface area from 165 to about 62 square miles subdivided into several smaller
lakes. (See Figure 21-7). Most of the reclaimed land would soon revert to tropical forest.
The quantity and diversity of flora and fauna of the lake would be reduced; however, losses
are not expected to be significant, since several large portions of the lake would be capable
of sustaining viable populations of most organisms now existing there.
Operation and maintenance costs: Costs of operation and maintenance on Route 14S
would be similar to those of Route 10. For 35,000 annual transits, these costs would be
approximately $56 million per year.
V-262
CHAPTER 22
ROUTE 25
Throughout the following discussion of Route 25, it is assumed that nuclear excavation
would be feasible, that it would be politically acceptable and that it would entail costs and
produce results generally as described in Appendix 3 (Nuclear Excavation Technology). The
testing program required to prove or disprove the validity of these assumptions has been
outlined in Chapter 6 and is presented in detail in Appendix 3. The general features of
Route 25 (Figure 18-1) were described in Chapter 18.
Capacity: Two configurations for Route 25 were considered; both include a 78-mile
conventionally excavated design channel; a 20-mile 1,000-foot wide nuclear excavated
channel; and 5 miles of two-lane 1,400- by 85-foot approach channels. The basic
configuration includes a 28-mile conventionally excavated bypass needed to attain the
minimum required transiting capacity without excessive TICW. The expansion configuration
would provide two-lane navigation over the entire length of the canal making convoy
operation unnecessary. Figure 22-1 shows how the bypass would operate. Table 22-1 gives
capacity-cost data for the two configurations.
A canal unobstructed by tidal checks appears more acceptable and desirable on Route
25 than on Routes 10 and 14S for several reasons:
— The length of Route 25 and the smaller tidal range of the Pacific at this site limit
peak tidal current velocities to about 3 knots.
— In the nuclear excavated section, the large channel cross section would reduce
currents to less than | knot.
— Along most of the conventionally excavated reach, where highest current velocities
would occur, the canal banks would be soft and not likely to damage a ship running
aground.
— The capacity of the route with a 3-knot limiting current exceeds the 60,000 annual
transit requirement for the year 2040, so that operations in peak currents could be
avoided without significant impact on capacity by scheduling transits to avoid
currents stronger than 2 knots.
— Ships larger than 25,000 dwt would be assisted through the canal by tugs.
— The length of Route 25 would make it a very effective biotic barrier, even without
tidal gates.
For these reasons tidal checks have not been included in conceptual designs made for
this study, despite the fact that currents would exceed the 2-knot maximum current
limitation imposed on Routes 10 and 14.
V-263
APPROACH
CHANNELS
BYPASS
DESIGN CHANNEL
NUCLEAR
APPROACH
CHANNELS
DESIGN CHANNEL
DESIGN CHANNEL
SECTION
â€
o
c
=
°
=
=
Two lanes
Two lane
3 miles
2
3
E
N
||| (A
Salil.
> 2 al)
oe a} >
Set . Oo
Sails] 2
ee . Oo
= s| Oo
.
.
.
Step 1
Convoys 1A and 1B
the bypass
section about to
enter the one-lane
sections.
are in
ATLANTIC OCEAN
peeeseee ss
e
‘*,
Lom
Step 2
Convoys 1A and 1B
are in the one-way
sections about to
enter the two-lane
sections at canal
ends.
CONVOY 2A
Beeeeeeees ee
000000000 ooo =
CONVOY 2B
PACIFIC OCEAN
Step 3
Convoys 1A and 1B
are in the two-lane
end sections moving
seaward. Convoys
2A and 2B are in
the two-lane end
sections about to
enter the one-lane
sections.
ROUTE 25
BYPASS
PLAN OF OPERATION
——<—<<—<———
w
SOOOOO OOO OOS
Step 4
Convoys 2A and 2B
are in the one-lane
section about to
enter the bypass
section.
3-KNOT ALLOWABLE CURRENT
13-HOUR CYCLE
FIGURE 22-1
Vv
-264
090000069000 De
Hie we ewe = =
Step 1
Convoys 2A and 2B
are in the bypass
section about to
enter the one-way
sections.
TABLE 22-1
ROUTE 25 CAPACITY-COST DATA FOR DESIGN CHANNELS
anuataliransits Average TIcw in Hours at Given
at 20 Hours Number of Transits Per Year
Configuration® Average Ticwb 35,000 60,000 100,000
3 knots:
Bypass 65,000 16 17 Cc
Two-lane 268 000 12 12 12
Estimated Design and
Canal Construction Construction Fixed O&M Net Flow
Configuration® Cost Time Cost/Year® (cfs)
Bypass $2,100,000 ,000 13 years $49,000,000 30,000
Two-lane $ 630,000,000 5 years $60,000,000 60,000
4B ypass designates a single-lane design channel with one 28-mile bypass. Two-lane designates
two parallel 78-mile single-lane channels. Both configurations have a two-lane 20-mile nuclear
excavated channel at the Pacific end. Both configurations would operate within a 3-knot cur-
rent limitation.
bTICW is time in canal waters, a combination of waiting time and transit time.
“Transit capacity indicated cannot be achieved.
Icosts and construction times indicated for the two-lane configuration represent additional
costs and times over and above those for the bypass configuration.
€Variable operation and maintenance costs would average about $1,000 per transit.
Table 22-2 summarizes the Characteristics of the two Route 25 options. The less costly
bypass configuration is preferred. Its capacity is estimated to be 65,000 transits per year,
and it would provide an excellent basis for expanding to a full two-lane capability if the
need to do so should arise.
Geology: The economic feasibility of Route 25 depends on the stability of slopes
formed by nuclear excavation in the divide and on the anticipated ease of excavating across
the Atrato flood plain with hydraulic pipeline dredges. The geology along the final
alinement is shown in Figure 22-2.
V-265
TABLE 22-2
CHARACTERISTICS OF ROUTE 25 CONFIGURATIONS?
Bypass Configuration Two-Lane Configuration
Capacity at Would exceed year 2040 transit requirements Exceeds foreseeable requirement.
20 hour TICW = (60,000 transits per year) by almost 10%
Time in canal 16 hours at 35,000 annual transits. 12 hours at 35,000 annual transits.
waters
Navigation Peak currents would rarely exceed 3 knots. Capacity is so large ship spacing would present
Bypass operations would require careful no problem.
control of vessels.
Flexibility Some flexibility would be possible because Flexibility is virtually unlimited. Canal could be
of operations of the high capacity. Highest currents could operated as two independent channels.
be avoided by occasional tight scheduling of
large ships (less than one day per month).
Expansion Could be expanded to a dual channel config- | No foreseeable need.
uration at reasonable cost with little inter-
ference with traffic.
Capacity at Not applicable Not applicable.
higher accept-
able currents.
9Based on the design channel in the conventionally excavated reach and a two-lane channel in the nuclear excavated
reach. A 3-knot current is acceptable and no tidal check gates are used.
The dominant lithologic formation in the divide reach (between Stations 0 and 1000) is
the Choco volcanics, consisting mainly of submarine basalt flows with some basaltic tuffs
and agglomerates. These igneous rocks have been fractured and variably altered to produce
substantial amounts of montmorillonite.* Some of the more altered zones slake upon
wetting and drying, but on the whole, the Choco volcanics are considered suitable for
nuclear excavation. In the upper Truando Valley, a 1- to 2-mile width of sediments,
consisting of tuffaceous siltstones, sandstones and conglomerates, overlie the volcanics. A
portion of these sediments, designated the Sautata group, is made up of a series of
moderately hard siltstones and sandstones. The remainder of the valley is composed of
Nercua conglomerate which is generally hard and dense but occasionally highly fractured.
Crater slopes in both the Nercua and Sautata groups are expected to remain generally stable.
The transitional zone of sedimentary rocks of the Truando and Rio Salado groups lies
between Stations 1000 and 1400. The Truando group consists of a series of tuffaceous
siltstones, sandstones and mudstones, apparently capable of sustaining stable slopes in deep
cuts, although limited testing indicated that some rocks in this zone are only marginally
competent. The Rio Salado group is composed of soft claystone and mudstone having
relatively low shear resistence.
*A clay mineral which expands readily on absorbing water, causing deterioration and weakening of the rock material in
which it is found.
ELEVATION IN FEET
CONTINENTAL
DIVIDE
LOC’ HIGHLANDS
1000 1000
PACIFIC
Oo oO
-1000 -1000
0+00 100+00 200+00 300+00 400+00 500+00 600+00
CONV.
NELEAR EAaAS): — — —
EXCAV.
UPPER
1000 aes SALTOS HIGHLANDS 1000
VALLEY
OF
OF)
SS—Hp
ESAS 0
0 Y 5 iS
-1000 -1000
700+00 800+00 900+00 1000+00 1100+00 1200+00 1300+00
NUCLEAR EXCAVATION
1000 1000
LOWER TRUANDO VALLEY
oO aaa SS ES So SS — °
Zr jij
Laon sik A 4 =“ ZZ -1000
1300+00 1400+00 1500+00 1600+00 1700+00 1800+00 1900+00
CONVENTIONAL EXCAVATION
ATRATO VALLEY
1000 (BROKEN SECTION: ATLANTIC 1000
RELIEF AND GEOLOGY SAME) OCEAN
0 a FF : ——Y
Ki
-1000 a 4 a1 A ZZ -1000
2000+00 4900+00 5000+00 5100+00 5200+00 5300+00 5335+00
ee
CONVENTIONAL EXCAVATION
LEGEND
[ave] CHOCO VOLCANICS vy) NERCUA GROUP
TRUANDO GROUP RIO SALADO GROUP.
iA
SAUTATA GROUP Z UNCONSOLIDATED SEDIMENTS
Geologic Profile
Route 25
FIGURE 22-2
V-267
ELEVATION IN FEET
The remainder of the alinement (between Stations 1400 and 5355) would lie in the
Post-Miocene unconsolidated sediments of the Atrato flood plain. Elevations of the flood
plain gradually decrease from about 16 feet above mean sea level on its southern edge to sea
level at Candelaria Bay. Borings in the Atrato Swamp encountered layers of peat up to 20
feet thick, overlying silts and clays which extend to depths below channel grade.
Conventional excavation: A generalized excavation system for the conventional reaches
of Route 25 is shown in Figure 22-3. Areas higher than elevation +75 feet along the
Truando Valley portion of the alinement would be excavated by the shovel/truck haul
system. Portions of the spoil would be used to construct flood control diversion works on
the Truando River. At elevations below 75 feet hydraulic dredging would be the most
economical excavation method. However, any material above 15 feet would be bulldozed or
sluiced to within reach of 48-inch hydraulic cutterhead dredges. The dredges would work
from sea level in pilot channels excavated from Candelaria Bay. Dredged materials would be
placed on both sides of the canal behind retaining dikes constructed to confine the spoil.
Spoil areas would be located at least 2,000 feet from the top of the final canal cut to permit
expansion to two-lane configuration. Sufficient area is available to limit the average height
of spoil behind the dikes to less than 6 feet.
In the ocean approaches project depth is reached within 3 miles of the shore of the
Atlantic side and 2 miles on the Pacific. The Atlantic approach consists of sand and muck
which would be excavated by hydraulic pipeline dredges. Soft materials in the Pacific
approach would be excavated by hopper dredges, while rock would require blasting and
excavation by barge-mounted draglines.
Volumes in the conventionally excavated portion of the canal, including a 28-mile
bypass, are summarized below:
Conventional channel excavation summary
Type of material Cubic yards Percent
Common 1,500,000,000 88
Soft rock 195,000,000 11
Medium rock —
Hard rock 15,000,000 1
1,710,000,000 100
The total cost of conventional excavation would be approximately $700 million.
Spoil disposal areas: Undeveloped lands adjacent to Route 25 provide unlimited space
for the disposal of this material. Most of it would be pumped through pipelines onto what is
now a vast flood plain.
Nuclear excavation: Nuclear excavation would be carried out in two passes. The first
pass (12 detonations) would excavate approximately one-half of the navigation channel and
four flood control diversion cuts. The second pass would complete the navigation channel in
V-268
PACIFIC APPROACH
ATLANTIC
NUCLEAR EXCAVATION APPROACH
400 400
Ban TRUANDO ATRATO 300
VALLEY VALLEY
200 200
ke
uw
iL
i; 10 3 100
; S 6
i Zo
eif oF 2
-100 -100
-200 -200
50 60
DISTANCE — MILES
\\\]DRAGLINE — HOPPER DREDGE
FE=JuyDRAULIC PIPELINE DREDGING
MM SHOVEL EXCAVATION — TRUCK HAUL
GENERALIZED CONVENTIONAL EXCAVATION METHOD
ROUTE 25
FIGURE 22-3
V-269
9 detonations by excavating connecting rows between the row craters formed by the first
pass. The excavation program would require approximately 150 nuclear explosives ranging
in yield between 100 and 3,000 kilotons. The largest detonation would have a total yield of
13 megatons.
The detonation sequence is illustrated by Figure 22-4. The order in which the sections
would be excavated has been based primarily upon the need to minimize interference with
preparations for succeeding detonations and follow-on conventional construction. Meteoro-
logical conditions should permit the first pass to be completed within 8 months. Following
this, a period of about 21 months would be allowed for radioactive decay and emplacement
drilling for the second pass. Then the intervening sections would be detonated over a period
of 3 months. The cost of nuclear channel excavation is estimated to be about $185 million.
Stream diversion: As shown in Figure 22-5, the alinement would intersect the Atrato
River near the town of Rio Sucio, about 50 miles upstream from its mouth. At this point,
the Atrato (drainage area 12,000 square miles) would be diverted into Colombia Bay
through a 1,000- by 50-foot dredged channel. This channel would be revetted to prevent the
river from meandering into the canal. The 2,000-square mile watershed on the west side of
the Atrato would be diverted through two floodways and portions of the abandoned Atrato
channel to Candelaria Bay.
Diversion of the Truando River in the divide reach is infeasible because the river is
deeply incised where it would be intersected by the canal alinement. A channel would be
cut with nuclear explosives through the ejecta ridge along the canal to allow the Truando
(drainage area 160 square miles) to flow directly into the canal. The Nercua and Salado
Rivers (drainage area 125 square miles) would be diverted along the ejecta toe to discharge
into the conventional reach of the canal. The Curiche River (drainage area of 21 square
miles intercepted by the alinement) is the only stream of any size intersected by the canal
on the Pacific side of the Continental Divide. It would be diverted through nuclear
excavated drainage channels across three ridge lines to the Pacific. The total cost of the
flood control facilities would be about $250 million, $230 million for conventional
construction and $20 million for nuclear excavation.
Harbor facilities: Port facilities needed for canal operation and maintenance would not
be as extensive as those now existing in the Canal Zone. Those ports are well developed and
should serve as the principal regional ports, supplying various major services essential to
shipping, such as repair and bunkering. Facilities for Route 25 are based solely on canal
operational and maintenance needs; however, emergency ship repair facilities including
mooring areas dredged to project depth have been included. Pacific port facilities would be
located on the coast where they would be protected by a jetty system. Atlantic port
facilities would be located near Sautata where the principal canal operating facilities would
be established. Although this is about 30 miles inland, it is situated in an area offering better
environmental conditions for a community than the deltaic regions near the coast.
Anchorages in open-water areas of adequate depth would be provided outside each channel
entrance. The general location of these facilities is shown in Figure 22-5. Their total cost is
estimated at $129 million.
CARIBBEAN SEA
; |
:
CARIBBEAN SEA
;
CANAL ZONE
me
i AREA OF
See
ae MAP
one IN eka
COLOMBIA |
‘
DARIEN -3
GULF OF HARBOR
SAN MIGUEL a
wo
S aa) ©
GARACHINE
FLOOD CONTROL
LEGEND
ATRATO DIVERSION
LOWER SALAQUI DIVERSION
UPPER SALAQUI DIVERSION
INTERCEPTOR CANAL
Cees
DROP STRUCTURE
assa=5 MINOR CONVENTIONAL DIVERSION CHANNEL
PACIFIC TOWNSITE \\
AND HARBOR FACILITIES
HUMBOLDT BAY HIGHLANDS
LEGEND
De icicae excavation
Ss CONVENTIONAL EXCAVATION
RIO CURICHE
SS
ni
ROUTE 25 DIVERSION PLAN AND SUPPORT FACILITIES
PANAMA-COLOMBIA BORDER AREA
SCALE IN MILES
V-272 5 5) folos. s20). Seomeaniss FIGURE 225
DEPTHS IN FATHOMS
Supporting construction: Items required to support construction are: health and
sanitation facilities, housing, highways and bridges, clearing and relocations, channel
cleanup, and operation and maintenance facilities. Their total cost would be approximately
$431 million.
Health and sanitation: The requirements for preventive medicine and medical
support on Route 25 are similar to those on Route 10, except that their extent and
cost would be larger because of the length of the canal, the undeveloped nature of
the area and its distance from modern medical facilities.
Medico-ecological investigations conducted as a part of this study showed a very
high incidence of malaria among the natives of the area, including, on the Pacific
side of the divide, a type (falciparum) which is resistant to chloroquine. For this
reason, special effort would be directed toward the prevention of malaria. Disease
vectors abound, particularly in the Atrato flood plain, and opening up the area by
construction without proper preventive medicine measures could bring about an
increase in diseases such as rabies, tuberculosis, arbovirus diseases (sleeping
sickness), Chagas’ disease (American trypanosomiasis), and leishmaniasis, which
now exist there and in other parts of Colombia.
An extensive medical support operation would be required from the very start of
the project. A 50-bed hospital would be established at Sautata. It would be
supported by existing facilities in the Canal Zone and would, in turn, support
dispensaries at the Pacific terminus and the upper Truando Valley. The dispensaries
and the hospital would support first aid stations established at the major
construction sites, and would continue in operation, as needed, after completion of
construction. Medical support would be designed especially to take care of
construction accidents and tropical diseases, such as malaria and other parasitic
diseases, enteric and skin infections, and related ailments.
Both medical support and preventive medicine operations would be coordinated
closely with Colombian, Panamanian, and Canal Zone authorities. They would also
be closely coordinated with radiologic control. The cost of the medical support
program would be about $44 million.
Housing and related support requirements: Housing, utilities, and community
services facilities would be provided to support construction and operating
personnel. The alinement of Route 25 traverses an essentially undeveloped area,
and few construction personnel could be recruited locally. Provision of adequate
living facilities for the construction workers and their dependents would be an
important factor in assuring an adequate labor force. During the construction
phase, project personnel would be furnished housing comparable with that available
at long-term construction projects in the United States. Permanent facilities would
be built and used during both the construction and operating phases to minimize
temporary construction. Figure 22-5 shows possible sites for such facilities. Their
estimated cost is $182 million.
Highways and bridges: A transisthmian highway consisting of an all-weather,
two-lane highway from the Pacific end of the canal to Sautata would be provided.
It would be one of the first items to be built and would serve both the construction
V-273
Gg
and operation phases of the canal. Secondary roads would lead to work sites along
the canal. A ferry would be installed on the Pan American Highway where it crosses
the alinement near Sautata. A permanent all-weather airfield suitable for supporting
scheduled feeder airlines also would be provided. Figure 22-5 shows the proposed
location for the principal permanent transportation facilities that would be
provided as part of the project. Their cost is estimated to be about $67 million.
— Clearing and relocations: Clearing costs are included in the estimates for each
construction item. Relocation costs would be insignificant.
— Channel cleanup: Fallback material within the nuclear excavated cut may encroach
on the navigation channel, particularly at row crater connections. This material
would be removed by barge-mounted draglines and dipper dredges and transported
in the bottom-dump scows to be deposited in channel areas where cratering
produced overdepth. This item also includes removing plugs at the ends of the
nuclear reach by conventional excavation. This work would cost about $13 million.
— Operation and maintenance facilities: Facilities to operate and maintain the canal
would be located at both of its ends, adjacent to the harbor facilities and townsites.
These facilities would be similar to those provided for Route 10 and would cost
approximately $129 million. Their location is shown in Figure 22-5.
Evacuation: Nuclear excavation would require evacuation of a large area adjacent to
and downwind from the worksite. The exclusion area shown in Figure 18-3 has been
developed to permit safe and efficient conduct of the nuclear excavation program. The area
was made large enough to assure a high probability of containing almost all local fallout.
Extensive observations showed that meteorological patterns would permit selection of
detonation days in which all fallout would be toward the Pacific. The ranges of close-in
airblast and ground motion effects were also considered. The nuclear exclusion area, roughly
parabolic in shape, would comprise a land area of about 3,100 square miles in the Choco
Department of Colombia, a region of very low population density, vast marshlands, tropical
forest, and heavy rainfall. Because of its inaccessibility and ruggedness, less than 10 percent
of the area has been cleared, inhabited or otherwise utilized, and only about 10,000 people
live there. Navigation by small boat along the Atrato, Salaqui, and Truando Rivers provides
the only means of surface access into the area.
The estimated cost of evacuating the exclusion area was based on the straight-fee
indemnity system. Under this concept, all families or individuals would be paid an equitable
price for their property which would enable them to resettle on available land outside the
area. Since a safety exclusion period of several years would be required, a flat, one-time
payment based on fair market value has been selected as a means of approximating safety
evacuation costs. Indemnification of commercial enterprises in the area, such as lumbering
and fishing, also is included in cost estimates. Relocation camps, temporary housing, and |
support facilities are not included but medical and other support services for the relocated
local population would be provided, as needed, on an extension service basis by teams of
specialists. The total project cost of real estate acquisition and limited support services for
evacuees is estimated to be about $40 million.
V-274
Schedule: A schedule for designing and constructing the project is shown in Figure
22-6. It provides a minimum one-year design phase immediately preceding the start of
construction. It assumes that work on such preparatory items as clearing, relocations,
highways, and initial construction of townsites and power distribution systems can start
immediately thereafter. Data collection would begin at the same time. After 2 years,
emplacement construction for nuclear excavation would start. Four years would be required
to complete this construction and subsequent nuclear operations. Conventional excavation
would start at the beginning of the fourth year and continue for 10 years.
Personnel: Figure 22-6 also shows the requirements for personnel for design and
construction of a canal along the Route 25 alinement. The length of Route 25 would dictate
the need for more operating personnel than Routes 10 or 14S; about 5,000 would be
required initially.
Cost summaries: The estimated cost of a 103-mile single-lane canal along Route 25 with
one bypass is $2.1 billion, assuming that the 20-mile-long divide section could be excavated
by nuclear methods. Principal elements of this total and their costs are:
Channel excavation
Conventional $ 700,000,000
Nuclear 185,000,000
Flood control
Conventional 230,000,000
Nuclear 20,000,000
Harbor facilities 129 000,000
Supporting construction 431,000,000
Evacuation 40,000,000
Subtotal 1,735,000,000
Contingencies
Conventional (12%) 185,000,000
Nuclear (30%) 60,000,000
Subtotal 1,980,000,000
Engineering, design, super-
vision, and administration (7%) 140,000,000
TOTAL $2,120,000,000
An estimated schedule of costs by year is shown on Figure 22-6.
Real estate: The cost for procuring land and easements along the canal for
rights-of-way, flowage, and deposition of spoil has been estimated at $10 million, based on
the market value of improvements and land use. This amount has not been included in
project costs.
Environmental effects: Construction of the sea-level canal could be expected to cause
significant local environmental changes, particularly in the Atrato River flood plain.
V-275
YEAR
ANNUAL COST
(S MILLIONS)
DESIGN AND
CONSTRUCTION 1240 2310 | 3640 3200 2890 3220 | 4480 3900 2530 1960 1330
PERSONNEL
SOEEORE A [20 [1570 | e70 | | se0 | | 1700 | 280 | iso _| 2030 |
TOTAL
See eae ee
ENGINEERING,
DESIGN, SUPER-
VISION & ADM.®
($140,000,000)
CHANNEL
EXCAVATION
A. NUCLEAR
($185,000,000)
B. CONVENTIONAL
($700,000,000)
FLOOD CONTROL
($250,000,000)
HARBOR
FACILITIES
$129,000,000
SUPPORTING — a tee a —
($431,000,000) ———— es ee ———
($40,000,000)
? Width of bar shows relative amount of activity for each item. ; -
Includes area sanitation and health, townsites, highways and bridges, channel cleanup, and construction for operation and maintenance facilities.
ROUTE 25 COST PERSONNEL, AND CONSTRUCTION SCHEDULE
FIGURE 22-6
Excavation of the channel and construction of levees for spoil retention would modify the
existing regimen of water elevations throughout a wide band along the route and increase
saltwater intrusion. This band, like the rest of the valley, is now almost permanently flooded
and covered by marsh grasses and shrubs. Large parts of the area would receive several feet
of hydraulic fill which would raise them higher above sea level and provide conditions
favorable to the growth of larger brush and trees. Under natural conditions this raised area
could be expected to become tropical forest; it might also be put to economic use. The
frequency, duration and depth of flooding over the remainder of the flood plain would not
change significantly.
The ecology of the area surrounding the nuclear cut through the divide would be
changed greatly, at least during the time required to re-establish the tropical forest.
Compared to the extent of the whole region, the amount of land so affected would be small.
Measurable radioactive fallout would extend over a much larger area but investigations made
for this study indicate that no species as a whole would be significantly affected.
V-276
The effect of flow through an unobstructed sea-level canal has been discussed in
connection with Route 10. The implications of this phenomenon on Route 25 are
considerably less. The smaller tidal amplitude in Humboldt Bay and the length of the canal
would serve to reduce the average net flow to less than 30,000 cubic feet per second. Water
entering the canal at the Pacific would require several days before it could exit at the
Atlantic. Thus Route 25 would provide a very poor passage for migrating biota.
The canal would cause a physical separation of the landmass, but no vital biotic
migrations would be stopped. Access to the interior, now possible only along the Atrato
River, would be improved by the diversion channels and by the transisthmian highway
which would be built. The Pan American Highway, now under route survey, will also assist
in opening the area to settlement.
Operation and maintenance costs: Operation and maintenance costs for Route 25
would be generally similar to those of Route 10, except that the much greater length of
Route 25 would cause its costs to be considerably higher. The total operation and
maintenance costs for 35,000 annual transits would be about $84 million per year.
Operation with the Panama Canal: The advantages of operating Route 25 in
conjunction with the existing lock canal are similar to those of Route 10, although the
substantial transit capacity of the bypass configuration makes it unlikely that the capacity
of the Panama Canal would ever be required as a supplement. However, it would be
advantageous to retain the Panama Canal in operable condition until the stability of sea-level
canal slopes appears reasonably assured.
V-277
V-278
CHAPTER 23
SUMMARY ANALYSIS
Considered alone, construction costs do not provide a valid comparison between
interoceanic canal alternatives. Numerous other factors merit consideration; however, many
of them cannot be expressed in common terms so that they can be compared. In the
analysis which follows, the factors which are considered to be within the engineering
purview of route selections are discussed qualitatively and, to the extent possible,
quantitatively. Some significant bases for comparison that are not included here are defense
advantages, foreign policy benefits, and both foreign and domestic economic benefits. No
attempt has been made to present a benefit/cost analysis.*
Route 10: In its basic single-lane configuration, Route 10 would have a transiting
capability slightly greater than the Commission’s initial capacity requirement (38,000 vs.
35,000 transits per year), even if operations were limited to currents not exceeding 2 knots.
The design capacity of 35,000 transits per year could be attained with a TICW of about 12
hours. Acceptance of higher tidal current velocities would increase capacities substantially,
with operations at 4 knots allowing 66,000 annual transits, 6,000 more than the
requirement for the year 2040.
If current velocities greater than 2 knots were to prove unacceptable, transit capacity
could be increased, if necessary, by the construction of a bypass, permitting 56,000 transits
annually, closely approximating the year 2040 requirement. The capacity of Route 10 could
be further expanded by enlarging it to a full 2 lanes.
Construction of Route 10 would provide a relatively short passageway between oceans,
thus facilitating migrations of biota unless tidal checks are used. Other significant long-term
ecological effects are not anticipated from this project, although there might be short-term
disruptions from excavation and spoil disposal.
Route 14S: The basic single-lane configuration of Route 14S would cost about 6
percent more than Route 10 and would take 2 years longer to build. Its slightly greater
capacity at 20 hours TICW does not appear to offset these disadvantages. At the initial
35,000 annual transit requirement, the average TICW would be about 10 hours. After the
first logical expansion step of shortening the single-lane cut, the capacity of Route 14S at all
current velocities would be about identical to that of the bypass configuration of Route 10.
*Annex III, Study of Canal Finance, includes the effects on financial feasibility of variations in project initiation, time of
construction, and interest rates.
V-279
Expansion to a two-way configuration, while meeting the requirements through year 2040,
would produce less capacity in the two-lane configuration than Route 10. This difference is
relevant only insofar as it relates to transit requirements beyond the year 2040. Of
immediate and far greater significance is the fact that the Panama Canal could not be
operated in conjunction with Route 14S because the lock canal would be rendered useless
when the sea-level canal is put into operation.
In addition to environmental concerns similar to those associated with the construction
of Route 10, excavation along Route 14S would draw down Gatun Lake and reduce its size.
Although the adverse economic effects of a smaller lake would not be significant, the impact
of its drawdown upon the environment and the general sanitation of the area could be
severe.
Route 25: This partially-nuclear excavated canal with a bypass in its conventionally
excavated reach could transit 65,000 ships per year, exceeding requirements for the year
2040. If nuclear excavation were feasible, this capacity probably could be developed at
substantially lower construction costs than at either Route 10 or Route 14S. This canal
could be expanded to a full 2-lane capacity at a much lower cost than either of the other
two routes, with an ultimate capacity of 268,000 annual transits. The relatively large
operation and maintenance costs of Route 25, resulting from its great length, would tend to
offset its advantage of low initial cost.
Construction of Route 25 would convert a sizeable portion of the lower Atrato flood
plain to land suitable for agriculture or forestry. Although such a conversion might have
undesirable effects on the ecology of the Atrato’s wetlands, these effects would be
mitigated, at least in part, by the enhanced value of the raised land. The combined effect of
a long canal and the potential for maintaining a biotic barrier with fresh water from the
Atrato and Truando Rivers would act to limit successful interoceanic migration of biota.
Adjacent to the divide cut, forests, surface drainage patterns, and wildlife would be seriously
affected by nuclear ejecta but the climate should repair most vegetative and habitat damage
quickly.
Sociologically, construction of Route 25 poses the problem of evacuating about 10,000
people from more than 3,000 square miles. Tentative relocation areas have been identified,
but many of the evacuees would be Choco Indians, who might resist being moved to other
unoccupied lands.
In any case, its dependence upon the use of nuclear explosives for the Divide cut causes
serious consideration of Route 25 to be deferred until nuclear excavation feasibility has
been established.
Route 15: The Deep Draft Lock Canal Plan would enable the Panama Canal’s capacity
to be expanded from 26,800 to 35,000 transits per year, and the size of the largest ship that
it could accommodate would increase from the present 65,000 dwt to 150,000 dwt. The
demonstrated ability of small ships to pass each other in the widened Gaillard Cut might
allow as many as 40,000 transits per year, the estimated capacity of 3 lanes of locks.
Operating costs would be relatively high and the attainment of ultimate capacity would
depend in part on two lanes of old locks, whose remaining useful life is unknown. As is the
case with Route 14S, the expanded lock canal would lack the flexibility of having another
V-280
usable canal available as an alternate or supplement. Expansion of the canal beyond the
minimum configuration would be costly, and it is doubtful whether the capacity of 60,000
transits per year could be achieved with a fourth lane of locks; a capacity of 100,000 annual
transits would probably require construction of another canal.
If economical methods to recycle lockage water cannot be developed, it would be
necessary to pump sea water into Gatun Lake, which would increase the salt content of the
lake sufficiently to affect its flora and fauna.
Environmental evaluation: The environmental implications of building a sea-level canal
along the several alternative sea-level routes are summarized in Table 23-1. While Routes 10
and 14S are similar in many respects, Route 10 appears preferable, since it does not require
the partial drainage of Gatun Lake. Its construction would not adversely affect the local
culture, nor would it disturb any known archeological sites.
Design alternatives: Table 23-2 lists significant problem areas associated with the three
principal sea-level alternatives; in effect, these areas represent costs — both quantifiable and
unquantifiable. Table 23-3 summarizes the costs and transiting capabilities of the
alternatives. These costs and capabilities can be influenced by certain modifications in
design criteria. The following discussion considers a number of such possibilities and the
effects they are likely to produce.
— Use of a smaller prism: The design channel was selected because of its ability to
accommodate large ships safely in 4-knot currents. The use of tidal checks to
reduce currents to 2 knots or less, implies that a channel smaller than the design
channel might be used, with consequent savings in excavation cost. Figure 7-3
indicates that a 450- by 75-foot channel* would be satisfactory for 150,000-dwt
ships transiting at a water speed of 9 knots and for 250,000-dwt ships transiting at
a water speed of 7 knots. Nevertheless, despite the inclusion of tidal checks in
conceptual designs and cost estimates, the design channel (550 by 75/85 feet) has
been used throughout this study. The principal reasons for this practice are:
— The design channel appears capable of accommodating many or all the ships in
currents greater than two knots, without additional expense;
— it would probably permit two-lane operations for many ships, thereby offering
a means of increasing transit capacity without increasing construction cost;
— it permits greater operational flexibility; and,
— it provides for unforeseen contingencies in a field of technology that is not well
understood.
*With a parabolic bottom having a centerline depth of 85 feet.
V-281
TABLE 23-1
SUMMARY OF SPECIFIC ENVIRONMENTAL IMPLICATIONS OF SEA-LEVEL CANAL ROUTES
Effects
Environmental
conversions
Terrestrial
effects
Marine
effects
Freshwater
effects
Unique
effects
Route 10
A 36-mile strip of forested
and semi-agricultural up-
land ecosystems would be
altered to more complex
ecosystems.
Hydraulic and dry spoil
would modify forest, lake
and ocean areas,
Barrier dams across seg-
ments of Gatun Lake
would reduce lake area and
subdivide it into four sep-
arate small bodies of water.
Diversion channels_ for
Trinidad and Ciri Rivers
and Cano Quebrado would
alter two 5- to 10-mile
segments of semi-
agricultural land.
An additional barrier to
overland migration would
be created. Flora, fauna,
and habitats would be
eliminated by construction
and spoil disposal.
Coastal waters at canal
ends would be considera-
bly altered. Migration of
biota through the canal
might result in establish-
ment of undesirable
species,
Breakwaters at Alitantic
end of canal and Pacific
jetty would modify envi-
ronment.
Route 14S
A 33mile strip of upland
ecosystem would be al-
tered to more complex eco-
systems.
Hydraulic and dry spoil
would modify forest, lake
and ocean areas,
Flood control dams across
segments of Gatun Lake
and the subsequent lower-
ing of the lake level would
reduce lake area and sub-
divide it into four small
separate bodies of water.
Gatun Lake dams would
permit lowering lake level.
100 sq. mi. of lake will be
converted to wetland.
An additional barrier to
overland migration would
be created. Flora, fauna
and habitats would be
eliminated by construction
and spoil disposal.
Coastal waters at canal
ends would be consider-
ably altered. Migration of
biota through the canal
might result in establish-
ment of undesirable
species.
Some decrease in biotic
populations would occur
because of the reduction in
area of Gatun Lake.
Swamp lands created by
lowering of Gatun Lake
may be undesirable.
V-282
route 25
A 20-mile strip of upland
and 80-mile strip of wet-
land ecosystems would be
altered to more complex
ecosystems.
Hydraulic spoil would
modify extensive portions
of the Atrato flood plain.
Nuclear spoil would cover
about 60 square miles of
upland forests.
An additional barrier to
overland migration would
be created. Flora, fauna,
and habitats would be
eliminated by construction
and spoil disposal.
Ejecta, airblast, ground
shock, and_ radioactivity
would affect wide areas
near site of nuclear excava-
tion.
Possibility of physical
danger and genetic altera-
tions would exist.
Coastal waters and estu-
aries at canal ends would
be considerably altered.
Migration of biota through
the canal might result in
establishment of undesir-
able species.
Levee effect of spoil plus
diversion channels will al-
ter entire hydrology of
flood plain with potential
effects on entire estuary.
Radionuclides may reach
man through food chains
and water supplies. About
10,000 people would be
displaced.
Physical
characteristics
of the site
Environmental
considerations
Construction
Operation and
expansion
TABLE 23-2
SIGNIFICANT PROBLEM AREAS*
Route 10
Coastal protection is lim-
ited. Peak tidal currents in
the canal could limit tran-
sit capacity unless control-
led. Knowledge of divide
geology is limited and very
flat slopes might be re-
quired in some areas.
Net flow into the Atlantic
would be relatively high
unless controlled by tidal
gates.
Weak materials in the
divide reach present prob-
lems in designing stable
slopes. Failure of the bar-
rier dams is highly un-
likely but could close the
lock canal for up to 2 years
and have a serious impact
on new construction. Tidal
checks are massive engi-
neering structures which
Present special problems.
Ship movements must be
synchronized with opera-
tion of tidal checks. To
achieve the year 2040 re-
quirement at 2- and 3-knot
current restrictions, a two-
lane configuration would
be needed unless the Pan-
ama Canal were kept in
service and operated in
comunciion with Route
Route 14S
Peak tidal currents in the
canal would be expected to
limit transit capacity unless
controlled. Divide cut re-
gion has known = areas
where flat slopes will be
required.
Gatun Lake area would be
reduced by over 50 per-
cent. Net flowinto theAtlan-
tic would be relatively high
unless controlled by tidal
gates.
Weak materials in the
divide reach present prob-
lems in designing stable
slopes. Failure of the con-
version plugs is highly un-
likely but would have a
serious effect on lock canal
Operations and new con-
struction. Construction in
and near the present canal
alinement would involve a
risk of slides and interfer-
ence with lock canal opera-
tion. Construction barge
traffic would present a
hazard to canal shipping
during several years in
which traffic would be at
Or near capacity of the
lock canal. Tidal checks are
Massive engineering struc-
tures which present special
problems.
Ship movements must be
synchronized with opera-
tion of tidal checks. To
achieve year 2040 require-
ments at 2- and 3-knot
current restrictions, a two-
lane configuration would
be needed. Construction of
this route would eliminate
the Panama Canal as a
usable alternative or an ex-
Pansion facility.
Route 25
Poor harbor potential and
limited protection exist on
the Pacific approach. Ex-
tensive river diversion
would be required.
A 3,100 square mile area,
estimated to include about
10,000 people, would re-
quire evacuation for about
four or more years. Radia-
tion monitoring would be
required for several addi-
tional years.
The feasibility of nuclear
excavation must be estab-
lished before construction
could begin. Experience
with megaton level row
craters is lacking. Nuclear
operations would be con-
strained by weather to
Prevent adverse fallout pat-
terns and possible acoustic
damage up to hundreds of
miles from the site. Facili-
ties required to support
construction and operation
would have to be provided.
The configuration and cCa-
pacity of this canal is based
on the assumption that op-
eration in a maximum cCur-
rent of 3 knots would be
Practical on this route.
*To the extent that these problem areas are quantifiable, they have been accounted for in estimating costs.
V-283
TABLE 23-3
DATA SUMMARY FOR OPTIONAL CONFIGURATIONS
1. MEETING MINIMUM REQUIREMENTS (35,000 transits/year)
Route 10 Route 14S Route 25°
Configuration Single lane Single lane Single bypass
Construction cost $2,880,000,000 $3,040,000,000 $2,100,000,000
Operation and maintenance cost $57,000,000/year $56,000,000/year $84,000,000/year
Design and construction time 14 years 16 years 13 years
Current restriction® 2knots 3knots 4knots 2knots 3knots 4knots 3knots
Capacity (transits/year)> 38,000 45,000 66,000 39,000 42,000 59,000 65,000
Average TICW (at 35,000
transits/year) 12 hr 14hr 12 hr 10 hr 15 hr 12 hr 16 hr
Average net flow (cu ft/sec) neg. 4,000 33,000 neg 1,000 28,000 30,000
I. FIRST EXPANSION STEP CONSIDERED (60,000 transits/year target)
Configuration Single bypass Shortened restricted cut Not required.
Additional construction cost $460,000,000 $430,000,000 Basic configuration
permits
Additional construction time 4 years 4 years 65,000 annual
transits.
Current restriction® 2knots 3knots 4knots 2knots 3knots
Date required® 2001 2007. +=2040+ 2002 2004
Capacity (transits/year)° 56,000 56,000 Nogain 55,000 55,000
Average TICW (at 60,000
transits/year) d d 38 hr d d
Average net flow (cu ft/sec) neg neg 13,000 neg neg
Ill. SECOND EXPANSION STEP CONSIDERED (100,000 transits/year target)
Configuration Two lane Two lane Two lane
Additional construction cost $1,520,000,000 $1,670,000,000 $630,000,000
Additional construction time 7 years 7 years 5 years
Current restriction? 2knots 3knots 4knots 2knots 3knots 4knots 3 knots
Date required© 2017 2017 2018 2016 2016 2019 2040+
Capacity (transits/year) 114,000 114,000 195,000 82,000 82,000 113,000 268,000
Average TICW (at 100,000
transits/year) 6 hr 6 hr 5 hr d d 12 hr 12 hr
Average net flow (cut ft/sec) neg. 1,000 50,000 neg. : 50,000 60,000
2F or safe navigation, currents are held at or below the value shown by use of tidal checks.
Capacities are given for 20 hours average time in canal waters (TICW)
“Date when the requirement for transits would exceed the capacity of the preceding configuration when operating
under the indicated current restriction. The transit requirement is taken from Annex IV, Study of /nteroceanic
and Intercoastal Shipping, for the “‘potential’’ tonnage projection, assuming 46% of the cargo is carried in freighters.
This is the highest of the three predictions accepted by the Commission.
Desired capacity cannot be obtained at any TICW.
“Because the application of nuclear excavation to ‘this project has not been established, figures shown in this column are
tentative.
fOperation of Route 25 with a two-knot restriction is feasible but not proposed. The physical characteristics of the
route would prevent currents from exceeding about three knots.
V-284
Cost savings that might be realized by constructing the preferred routes with the
smaller (450- by 75/85-foot) channel are:
Route 10 Route 14S Route 25
Estimated total costs
with design channel $2,880,000,000 $3,040,000,000 $2,100,000,000
Estimated total costs
with 450- by 75/85-ft
channel $2,660,000,000 $2,800,000,000 $2,030,000,000
Estimated savings
through smaller
channel $ 220,000,000 $ 240,000,000 $ 70,000,000
(7.6%) (7.9%) (3.3%)
— Use of a 3-knot current limitation: A 2-knot current was selected as the limiting
condition for navigation, although channel design was based on operating in 4-knot
currents. The costs and capabilities of the routes have been compared on the basis
of the 2-knot operating rule. A less conservative approach would be to hold
currents on all routes to 3 knots, or less. This would increase transiting capacity
and could lead to minor savings. Under those conditions, the gain in annual transits
for the basic configuration of each route would be:
Route 10 Route 14S Route 25
Three knots 45,000 42,000 65,000
Two knots 38,000 39,000 —*
Gain 7,000 3,000 65,000*
At the first level of expansion (bypass on Route 10, extension of the two-lane
channel on Route 14S) increasing limiting current velocities to 3 knots would
produce no gain in capacity, although it would reduce TICW.
— Possible increases in transiting speed: Limiting currents to 2 knots in a channel
designed for 4-knot currents implies that an operating speed of greater than 7 knots
relative to land-may be possible. Increased capacity would result if tidal gates were
sited to take advantage of the higher land speeds for transiting ships. Possibilities in
this regard are discussed in Appendix 6.
*With an average TICW of 20 hours, the capacity of Route 25 in the single bypass configuration would be extremely small
if operations were limited to 2-knot tidal currents. Ships could transit only under favorable conditions. If a higher TICW
of 24 hours were acceptable, the capacity would rise to about 40,000 annual transits. Alternatively, a dual bypass
configuration with tidal checks would allow 45,000 transits at 21 hours average TICW with a 2-knot current limitation.
V-285
Although the adoption of any or all of these design alternatives could lead to minor changes
in costs and capacities, the relative costs — both quantified and unquantified — and
capacities of the several sea-level canal options would not be changed. Route 10 appears to
be preferable under all conditions.
Sea-level/lock canal comparison: The fact that the Panama Canal already exists suggests
incremental improvements in its capabilities, rather than its total replacement, as a means of
meeting increased transiting requirements. Analyses made for this study show that the lock
canal option preferred for meeting design criteria would be the Deep Draft Lock Canal Plan
along Route 15, as discussed in Chapter 12. Table 23-4 compares the salient features of that
plan with those of Route 10, the preferred sea-level canal alternative.
The principal advantages of Route 15 are its much lower initial cost for increased
capacity and its low currents. Route 10 would offer better opportunities for expansion,
either by raising the allowable operating current, by adding a bypass, or by using the
capacity of the lock canal; it also would have lower maintenance costs.
Lock canal capacity is based on one-lane (‘‘clear-cut’’) passage through the Gaillard Cut.
If passing in the cut were possible for most ships, the capacity of Route 15 would approach
40,000 transits per year. Similar, but less, enhancement of capacity could be attained by
allowing ships to pass in the design channel reaches of a sea-level canal.
Although enlargement of the Panama Canal would require the least capital outlay to
meet minimum design requirements, its limited possibilities for subsequent expansion, its
relatively high operation and maintenance costs, and the indeterminate life of its locks tend
to offset this advantage of low construction cost. More significantly, the enlargement of the
lock canal does not meet the Commission’s stated requirements for transit. Hence, it is an
unacceptable alternative.
TABLE 23-4
LOCK CANAL — SEA-LEVEL CANAL COMPARISON
Feature Route 15 (Lock Canal)
Initial cost $1,530,000 ,000
Time for design and construction 10 years
Capacity at 20 hours average time 35,000 transits/year®
in canal waters 40,000 transits/year with passing
possible in the Gaillard Cut for
most ships
Maximum ship size 150,000 dwt, but not modern
attack aircraft carriers
Operation and maintenance cost:
Fixed $51 ,000,000/year
Variable $580 /transit
Environmental concern Pumping salt water into Gatun
Lake would make it brackish.
Expansion possibilities It is doubtful if the year 2040
requirement of 60,000 transits
per year could be met witha
fourth lane of locks.
Operations Careful navigation is required in
entering locks, but currents would
be no problem.
Maintenance Scheduled lock maintenance
would require periodic lane
outages, thus limiting capacity
temporarily.
Miscellaneous The existing 55-year old locks
eventually may require replacement
at an estimated cost of
$800,000,000. The date of replace-
ment cannot be predicted.
4 Average TICW is 25 hours for Route 15.
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Route 10 (Sea-Level Canal)
$2,880,000 000
14 years
38,000 transits/year at 2-knot current
55,000 transits/year at 3-knot current
66,000 transits/year at 4-knot current
150,000 dwt
250 ,000 dwt in favorable currents
$35 ,000,000/year
$640/transit
Transfer of marine biota between
oceans would occur, with the extent
depending on the amount of use of
tidal checks. Spoil areas would be
much more extensive than for Route
15.
A bypass section could be construc-
ted for $460,000,000 and would
provide a capacity of 56,000 transits/
year at a 2-knot limiting current.
Additional capacity would require
raising the current limitation or
providing a two-lane configuration.
Use of the Panama Canal offers
another means of expansion at
least cost.
Convoy movements would require
tight control to synchronize with
operations of tidal checks. Currents
may be a help to some ships; head
currents may help some, tail currents
may help others.
Periodic tidal check gate maintenance
would restrict operations but transit
of smaller ships should be unaffected.
Route 10 could be used in conjunction
with the Panama Canal, resulting in a
system with a high degree of flexibility
and dependability.
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PART V
PROJECT EXECUTION
Following a decision to build a sea-level canal, a number of issues would have to be
resolved. They relate to:
— Management, funding, and organization of the project during both its construction
and operational phases;
— Disposition of the Panama Canal; and,
— Further investigations which should be made prior to the initiation of construction.
CHAPTER 24
MANAGEMENT, ORGANIZATION AND FUNDING
The construction and operation of several large engineering projects were examined to
discover those strengths and weaknesses which significantly influenced their effectiveness.
These factors were analyzed to determine which would be relevant to a sea-level canal
project. Such factors were translated into guidelines for future projects. The complete
analysis is given in Appendix 4.
Construction: The construction projects considered are described briefly in Table 24-1.
TABLE 24-1
CONSTRUCTION PROJECTS EXAMINED
St. Lawrence Seaway: Seven locks and connecting channels were constructed in a
5-year period through a 189-mile reach of the St. Lawrence River at a cost of $140
million, exclusive of power plants constructed by the State of New York. The St.
Lawrence Seaway Development Corporation, established by Congress and the
President of the United States, managed and directed the design, construction and
Operation of the United States portion of the seaway. The Corporation designated
the Corps of Engineers to design and construct the locks and ship channel. Revenue
bonds were used for financing. The United States cooperated with Canada on the
project.*?
V-289
TABLE 24-1
CONSTRUCTION PROJECTS EXAMINED (Cont'd)
Tennessee Valley: A 40,600-square mile watershed was developed for navigation, flood
control, and generation of power. Twenty-six dams, 9 coal-fired power plants, and other
facilities were constructed by the Tennessee Valley Authority, a government corporation.
From 1933 to 1944 when the last major dam was completed, the project costs totalled
$718 million. Funds were appropriated annually by Congress. The Authority was licensed
to sell bonds for additional financing.**
Aswan High Dam: This $1.12 billion project on the Nile River in Egypt is being constructed
under the High Dam Committee which reports to the Ministry of Public Works, United
Arab Republic. The main feature of the project, a rockfill dam, has a width of 1/2 mile
at the base and a crest length of 2 1/2 miles. The Union of Soviet Socialist Republics has
loaned funds for the construction of the project and requires the use of Soviet equipment.
Total construction time will be about 12 years.*4
Intercontinental Ballistic Missile Operational Bases: More than 1,000 launch silos were
constructed at 23 sites throughout the United States from 1958 to 1966 at a cost of
$1.85 billion. The Corps of Engineers Ballistic Missile Construction Office (CEBMCO)
acted as the design review and construction supervision agency under the U.S. Air
Force which monitored the development, design and construction of the bases. Funds
were appropriated by Congress.**
Snowy Mountain Scheme: This project includes 15 dams, 100 miles of tunnels, 80 miles
of aqueducts, and power stations with a total capacity of 3.8 million kilowatts. It
was started in 1949 and at completion in 1974 will have cost almost $900 million.
The Snowy Mountain Authority, an agency of the Australian government, is responsible
for the construction, maintenance, management and control of the project.*
Taconite mines and processing plant: An inland crushing and loading plant, a 47-mile
railroad to Lake Superior, a pelletizing plant, a harbor, an ore loading facility, and
towns for 4,000 employees were built between 1951 and 1955 at a cost of $187
million. The facilities were constructed by the Reserve Mining Company, jointly
owned by ARMCO Steel and Republic Steel Corporation.*â€
The Panama Canal: The 51-mile Isthmian lock canal involved over 5 million cubic
yards of concrete and 280 million cubic yards of excavation. It was built between
1904 and 1914 at a cost of $275 million; defense facilities cost another $111 million.
The planning, design and construction were supervised initially by an Isthmian Canal
Commission of seven appointed by the President of the United States. Funds were
appropriated by Congress. Rights to build the canal were granted to the United States
by a treaty with the Government of Panama.*®
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TABLE 24-1
CONSTRUCTION PROJECTS EXAMINED (Cont'd)
The Suez Canal: This 109-mile sea-level canal, involving 97 million cubic yards of
excavation and connecting the Red and Mediterranean Seas was built between 1861
and 1869 at a cost of $189 million. A private company under Ferdinand de Lesseps
managed and directed all funding and construction activities. The Government of
Egypt agreed to permit the company to build the canal and to operate it for a period
of 99 years.*®
Missouri River development: Five large dams along a 600-mile reach of the Missouri
River involving about 200 million cubic yards of earthfill, 5 million yards of concrete
and power plants with a capacity of 1.8 million kilowatts were built between 1947 and
1967 at a cost of $994 million. The Chief of Engineers, U.S. Army, delegated re-
sponsibility for design and construction to two Engineer Districts. Funds were appropriated
annually by Congress.*?
These projects were analyzed to determine their desirable and undesirable features, as might
pertain to a sea-level canal. From this analysis, the following guidelines were derived:
— The project should be under the direction of an autonomous government authority
empowered to seek funds as described below and to manage and direct all elements
of planning, design, and construction. The authority should have no responsibilities
other than those involved in building the sea-level canal. It should be governed by
commissioners who work full time on the project and who would be expected to
serve for the duration of the construction phase. The number of commissioners
could be limited to three, including:
— An individual highly qualified in corporate management involving construction.
— An individual highly qualified in financial management of large projects.
— Ahighly qualified engineer who would be designated chief engineer.
— The public law establishing the authority should be specific in defining the
responsibility and functions of the authority.
— A satisfactory treaty should be negotiated with the host country prior to design
and construction. The treaty should establish means for resolving routine problems
associated with the construction effort.
— Funds for the total estimated cost of the project should be authorized by Congress
concurrently with establishment of the authority. Project funds should be
appropriated and allocated as required for orderly progress of the work. The
authority should be empowered to issue revenue bonds for about ten percent of the
estimated total project cost to supplement appropriated funds as necessary to
assure orderly progress of work.
— Elements of one or more existing governmental agencies or departments having the
requisite capability, experience and professional staff should be assigned and made
responsible to the authority for designing the canal and its appurtenances, and
contracting for and supervising its construction.
— Design and construction should be under the supervision and control of the chief
engineer, who should be resident on site with his design staff. Construction should
be accomplished on an area basis rather than a functional basis.
V-291
Construction should be accomplished by contract. Contract duration should be
made as long as practicable without penalizing contractors with the effects of
inflation. Contract sizes should be varied to make best use of individual and joint
contractors.
To a limited extent, specialized equipment should be procured and owned by the
authority and made available to contractors as needed, under rental agreements. All
other plant should be furnished by the contractors.
Division of direction and control of projects between the United States and the
host country which would result in controversy and friction between the nations
must be avoided.
Operation: Table 24-2 describes the projects analyzed to develop guidelines for
operating the complete project. These guidelines are:*
Management of operations at the sea-level canal should be accomplished by an
independent government agency similar to the Panama Canal Company.
Policy making authority should be vested in a Board of Directors, composed of
representatives from industry, commerce and government. The Canal Director, a
member of the Board, would be responsible for all elements of canal operations and
would reside at the project. Supervisors responsible to the Canal Director would be
in charge of operational elements such as traffic control, maintenance and
engineering. Agency headquarters should be on site.
The operating agency should not be formed by assuming the organization of the
constructing agency and absorbing its personnel.
The agency should have continuing authority to obtain funds from capital markets,
as needed, for effective short-range and long-range planning, although specific
authorization must be obtained from Congress prior to any issue of stocks or
bonds.
The agency should have a revolving fund upon which it could draw for minor
capital improvements, operation and maintenance, and replacement of equipment.
Funds for major capital improvement should be authorized and appropriated by
item.
Agreements with the host country on operational responsibilities and procedures
must be made before construction begins. They should be specific and not subject
to different interpretations which would adversely affect operation and mainte-
nance.
Maximum participation of the private economic sector of the host country in
providing support services for shipping and operational personnel should be
obtained.
*Guidelines concerning financial management are not included.
V-292
TABLE 24-2
OPERATIONAL PROJECTS EXAMINED
The Panama Canal: This is a 51-mile-long (land cut plus ocean approaches) lock
canal across the American Isthmus. In FY 1970 the canal transited 15,523 ships
carrying 119 million tons of cargo. Average time spent in canal waters was 18
hours, of which transit time was about 7 hours.
The Suez Canal: This 109-mile-long sea-level canal connects the Red Sea with the
Mediterranean. In 1965, 20,300 ships transited the canal carrying 250 million
tons of cargo, mostly petroleum. Transit time varied from 12 to 18 hours. The
canal has been closed since 1967.
The Cape Cod Canal: This is a sea-level canal 17 miles long (almost 8 miles is
land cut) connecting Cape Cod Bay with Buzzards Bay in Massachusetts. Large
boat traffic averages 6,000 transits annually carrying about 10 million tons of
cargo. Small boat traffic averages an additional 12,000 transits annually. Transit
through the land cut usually takes less than an hour.*°
St. Lawrence System: This lock canal system connects the Great Lakes with
the Atlantic Ocean. The system includes the St. Lawrence Ship Channel, the
St. Lawrence Seaway and the Welland Canal. Of these, the Welland Canal carries
the most traffic, averaging more than 9,000 ships a year and 50 million tons
of cargo, mostly bulk materials.
The Upper Mississippi River: This includes a 9-foot navigation channel 663
miles long with 28 locks and dams. In 1968, cargo amounted to about 50
million tons. The system is closed during the winter.
V-293
V-294
CHAPTER 25
DISPOSITION OF THE PANAMA CANAL
Considering the long time required for design and construction of a sea-level canal, the
on-going program of the Panama Canal Company to increase yearly transit capacity to
26,800 should be continued because it represents the most economical method of
accommodating increased traffic for the next 20 to 30 years.
At the time of completion of a sea-level canal along any alinement except Route 14, the
Panama Canal would retain its capability of transiting ships for a number of years, provided
it is kept in operable condition. To make effective use of this capability would require that
the two canals be considered as a single transiting system, even though the Panama Canal
might not be in actual operation. Asa part of this system, the lock canal might be operated
at a low level of transits, be maintained on a standby status, or be placed in “‘mothballsâ€â€™.
Ultimately, it might be dismantled or even abandoned.
Initial use: For a period of about ten years after the sea-level canal is opened to traffic,
the Panama Canal should be kept as an emergency standby facility. During that period, most
of the potential slope adjustments along the sea-level canal should occur, and if the
adjustments were sufficiently large to interrupt traffic, the lock canal would be available to
meet demands for transiting the Isthmus. As assurance of slope stability is increased with
time, maintenance dredging, without interrupting traffic, should be able to remove any
slides that occur. Operating plans developed by this study call for maintaining the Panama
Canal on standby for 10 years after opening of the sea-level canal.
Ultimate role: After that time the need to maintain the lock canal as a readily available
emergency alternative might not warrant the expense involved, particularly if lock
replacements became necessary. By then, operation of ships in the sea-level canal in currents
greater than 2 knots should have been tested thoroughly. If such operation proved
impossible, limiting the sea-level canal’s capacity to about 38,000 transits per year, the lock
canal would be needed to supplement the system’s capacity until the sea-level canal is
enlarged by the addition of a bypass or extension of the approach channels. The
combination of unimproved sea-level and lock canals would be capable of accommodating
more than 60,000 transits annually, with the sea-level canal transiting all ships larger than
65,000 dwt and both canals transiting smaller ships. Utilization of the system at this level
probably would justify major maintenance expenditures for the lock canal.
V-295
If operation of most ships in currents up to 4 knots were to prove feasible, a one-way
sea-level canal would meet traffic requirements past the year 2040, making dependence on
the Panama Canal unnecessary. In that case, further maintenance of the lock canal would be
of questionable value, and its salvage or abandonment should be considered.
If it appears that a full two-lane sea-level canal capacity is needed, conversion of the
Panama Canal to sea level should be considered as an alternative to double-laning the
sea-level canal.
The ultimate role of the Panama Canal cannot be determined at this time; and until the
sea-level canal is a reality, no decision should be made which would preclude selection of the
Panama Canal as the probable least expensive and quickest means of providing a larger
number of additional transits if expansion of sea-level canal capacity becomes necessary.
Costs: The cost of operating and maintaining the Panama Canal is about $75 million per
year for about 15,500 annual transits. A limited capability to respond to emergency
requirements could be retained by operating the canal continuously at greatly reduced
traffic levels. For example, instead of operating both of its lanes full time, a single lane
could be operated on a one-shift basis, 5 days a week. This could be accomplished at an
operation and maintenance cost of $4 million per year. It would serve to keep the lock canal
machinery in working condition and would keep available at least one trained crew out of
which to build a larger operating force quickly if the need arose. Compared to the operating
costs of a sea-level canal, the cost of maintaining the lock canal appears insignificant; yet,
the insurance it provides would be great.
Another method of maintaining the lock canal in operable condition would be to
“mothball†it. This would cost an estimated $1 million initially; annual maintenance costs
would be less than $1 million. These costs are relatively low but restoring the canal to
operational status would take about a year and would cost about $5 million, including the
cost of recruiting and training operating personnel. If reactivation could be phased over a
period of several years, ‘““mothballing†would offer an inexpensive means of maintaining the
canal.
V-296
CHAPTER 26
FURTHER INVESTIGATIONS
Forecasts of transit requirements given in Annex IV, Study of Interoceanic and
Intercoastal Shipping, show that the present canal, even after substantial improvements have
been made, could reach its capacity as early as the year 1990.* Consequently, planning for
construction of a sea-level canal should permit meeting that date. Estimates for Route 10
show a 14-year construction period, including a 2-year period of preconstruction
engineering and design. To meet a 1990 opening date, a firm decision to proceed should be
made no later than 1975, accompanied by a commitment of funds to permit detailed design
to begin in 1976. Before these actions are taken, however, several specific aspects of
engineering technology should be improved to permit design work to proceed expeditiously.
Investigations which should be undertaken to support eventual design of a sea-level
canal fall into two general categories: those which expressly facilitate economic canal
construction and those of much broader scope than the specific problems of an interoceanic
canal project. In the first group are ecological studies to determine the risk of mixing the
oceans; and subsurface geological investigations along the preferred route to assure the best
siting for the canal and to increase the reliability of the slope designs. Those investigations
which have a scope broader than canal construction include an analysis of existing clay shale
slopes to improve design in certain large earthmoving projects, definitive investigations into
the problems of navigating large ships in confined waters, and nuclear excavation, which
should be pursued energetically to the point of establishing its feasibility.
Environment: The unanswered questions concerning the environmental impact ofa
sea-level canal center around the mixing of biota between the oceans. Recognizing the lack
of agreement on this problem, the Commission asked the National Academy of Sciences to
propose a program for further investigations in the event a canal is to be built.2° The
summary and recommendations of the National Academy report are shown in Inclosure E.
In substance, the National Academy’s program calls for further studies of:
— the commercial and sport fishing industries in the countries that might be affected
by biotic interchange through the canal;
— the movement of water through the canal;
— the eventual disposition of excavation material;
— physical and biological oceanography in the Gulf of Panama and the Caribbean,
including nearshore zone processes;
*This date is based on highest of the 3 transit projections accepted by the Commission. The other two accepted projections
show that the capacity of the Panama Canal would be exceeded about the year 2000. Financial evaluation of the canal
was based on these lower transit projections.
V-297
— dispersal and colonization processes;
— biotic barriers; and
— sampling and taxonomic analysis of inshore waters to a depth of 100 meters. This
program would be accomplished by a separate commission established to conduct
this work before, during, and after canal construction.
The Battelle Memorial Institute also proposed objectives for a marine ecological
research program. Included among these is a mathematical simulation of critical components
of the ocean mixing process to provide quantitative predictions of its ecological effects.
Table 26-1 presents a comparison of data needed with those available to perform such
model studies.
There are several qualified organizations which could undertake the recommended
ecological studies, including the Smithsonian Institution which operates scientific centers in
the Canal Zone.
Subsurface investigations: Excavation costs are governed by the type and quantity of
material to be removed. In general, unit costs for excavating hard rock are higher than those
for soft rock; however, hard rock can support steeper side slopes. Consequently, all other
factors being equal, the volume of excavation through hard rock is considerably less than
that through soft rock. Minimum excavation costs, then, are achieved by choosing that
alinement which best balances unit costs — a function of the type of rock — and total
volume — a function of the terrain elevations and the strength of the foundation material.
Selecting the alinement which minimizes excavation costs would be possible only after
extensive subsurface exploration. The cost of this exploration and accompanying analysis
would be more than offset by possible savings in construction costs. The accomplishment of
this work prior to the start of design is essential to the timely initiation and completion of
the project.
Such a program is time consuming. It would require drilling closely spaced bore holes
along and adjacent to the prospective route for geologic and soil analyses and boring several
shafts for in place examinations. The program should be initiated in 1971 if optimum results
are to be obtained by 1976. (See Table 26-2). Its costs would be about $15 million, or $3.0
million per year. Although experience indicates that, no matter how detailed design studies
might be, some slides in a new canal would be inevitable because of adverse geological
structures, every effort must be made to minimize their effects.
Conventional excavation of a test section: The slope criteria on which estimates in this
study are based were derived largely from Panama Canal Company experience. The materials
along Routes 10 and 14 are similar, but not identical, to those through which the present
canal was excavated, but the slopes on the sea-level canal would be higher than those of the
Panama Canal. Thus, criteria used in this study may not be suitable for all conditions to be
encountered in building a new canal. A prototype section along the divide cut of the
sea-level canal would provide the best means of improving and refining current slope criteria.
But a suitable full-size test section with adequate length would be too large an excavation
project* to undertake prior to commitment of substantial funds to the canal. Therefore,
*Estimated to cost approximately $100 million for Route 10.
V-298
(1)
(2)
(3)
(4)
(5)
(6)
(1)
(2)
(3)
(4)
(5)
(6)
TABLE 26-1
COMPARISON OF PHYSICAL AND ECOLOGICAL DATA NEEDED AND DATA
AVAILABLE FOR MATHEMATICAL MODELING OF MARINE MIXING
Data Needed Data Available
: : za ae Physical
Concentration profiles of limiting wee (1)
nutrients in the oceans at the termini
and in the freshwater discharge into
the canal
Reaction rate constants for chemical (2)
reactions which produce or consume
limiting nutrients
Concentration profiles of salinity, (3)
suspended solids, and other materials
characteristic of habitats near termini
Speed and direction of currents as a (4)
function of time (tide and season)
nearshore, offshore, and in the canal
Measurements of turbulent diffusivities
in the canal and in the oceans (e.g.,
by dye studies) (5)
Temperature profiles in the oceans
and in the freshwater inputs to the (6)
canal
Ecological
Trophic structure of each ecosystem (1)
of interest
Biomass of each trophic level
Biomass and energy transfer rates
between trophic levels (2)
Biomass, trophic level, and life history
for each species of interest
Biomass and energy transfer rates (3)
between species of interest and other
trophic levels, predator-prey relations
Physiological tolerances of major species (4)
to principal environmental variables
and effects of these variables on biomass
transfer rates
(5)
(6)
V-299
Average concentrations of a few
elements of radioecological import-
ance, including some nutrient
elements.
Qualitative descriptions of a few
typical reactions but no reaction
rate constants
Scattered, uncertain concentration
profiles for salinity and suspended
solids, chiefly on the Pacific side
Good estimates for average currents
in the canal, scattered estimates of
offshore currents in the oceans, no
estimates of nearshore currents in the
the oceans
Estimates of turbulent diffusivities
from other localities
Scattered temperature profiles in the
oceans, none for freshwater
Qualitative dietary information for
numerous species, but no detailed
information of trophic structure
of any ecosystem considered
Crude biomass estimates for
phytoplankton, zooplankton,
anchoveta, and shrimp in the Gulf
of Panama
Crude estimates of biomass transfer
rates for above-listed groups in the
Gulf of Panama
Crude estimates of phytoplankton
biomass and productivity for one
station in Caribbean and speculative
estimates for crown-of-thorns
starfish
None except as metioned above
Gross speculations only
TABLE 26-2
SUBSURFACE INVESTIGATION PROGRAM (ROUTE 10)
Program for adjusting alinement
Number of holes 184
Total footage 73,600 linear feet
Drilling cost $2,160,000
Downhole logging 200,000
Laboratory testing 500,000
Subtotal $2,860,000
Program after alinement is firm
Number of holes 1,450
Total footage 193,000 linear feet
Drilling cost $5,800,000
Downhole logging 700,000
Laboratory testing 1,600,000
Shafts and adits (7,200 LF) 2,160,000
Subtotal $10,260,000
Total program cost
Total direct costs $13,120,000
15% contingency 1,980,000
Total $15,100,000
consideration was given to excavating a test section at the start of the excavation period.
This, too, was found to be undesirable because it would require that a considerable portion
of the total excavation effort be mobilized prematurely. Consequently, construction of a
prototype section was dropped from further consideration as an item to be included in the
predesign investigation program. Instead, the subsurface investigations program discussed
above has been designed to provide requisite data relating to slope stability.
Clay shales and soft altered volcanic rocks: Neither the short nor the long-term stability
of such materials as are found along the divide cuts on Routes 10 and 14 is well understood.
V-300
Consequently, conservative slope criteria have been used in preparing estimates for this
study. Substantial savings might be realized if it were possible to construct the canal initially
with slopes steeper than called for in this study. If necessary, slopes could be brought to
their final configuration through maintenance after the canal has been put in operation. This
would involve an element of risk. The study of clay shale slopes now being conducted by
the Corps of Engineers and the Panama Canal Company should be augmented and carried
forward to minimize the risk of using steeper slopes. The cost of this augmented program
would average about $150,000 annually.
Navigation: The design channel used in this study is considered to be conservative in
terms of its dimensions and the provisions it makes for tidal gates and tugs. Further
analyses and model studies might point the way to safe navigation in a smaller channel, in
faster currents or without reliance on tugs. A change in any of these factors could produce
substantial savings in construction and operating costs. An investigative program costing
about $300,000 per year for 5 years should either confirm navigational criteria used in this
study or lead to better criteria for designing confined waterways. The investigations should
combine the fields of tidal hydraulics, hydrodynamics of ship design, civil and marine
engineering, mathematical and scale model simulation, ship handling procedures, and
waterway management. The objectives of the program would be:
— To identify the relevant factors in the safe and economic design of confined
waterways suitable for large ship navigation. This identification process should
include a search and analysis of pertinent literature.
— To design processes for evaluating the relevant factors. If a simulation process is
necessary, as appears likely, mathematical and scale model investigations should be
planned in detail. These investigations should encompass information gained from
the performance of ships in operating canals, with particular emphasis on pilot
performance and its impact on the relationship between the ship and its behavior in
a channel. Variable currents, current reduction methods, assistance from tugs and
different methods of operating waterways should be considered in planning the
evaluation processes.
— To perform the necessary evaluation processes.
— To analyze the results and prepare appropriate technical reports.
— To prepare a manual which would permit the design of the most economical safe
channel in confined waters for large ships of specified sizes.
Nuclear excavation: Although nuclear excavation technology has not yet been fully
established, it still offers prospects of substantial savings in large excavation projects.
Investigations performed in connection with this study have highlighted what remains to be
done to demonstrate the feasibility of this technique and the need to continue and intensify
the joint nuclear excavation program of the Atomic Energy Commission and the Corps of
Engineers. Its objectives should include those appropriate to nuclear excavation of the
sea-level canal, as enumerated in Chapter 6. They should include a large-scale on-site
cratering experiment. If for reasons not now foreseen, initiation of a sea-level canal is
deferred, nuclear excavation, given sufficient impetus, might prove feasible for its
construction.
V-301
Summary of further investigations: A program to investigate those problems which
must be resolved prior to the initiation of detailed design is summarized in Table 26-3.
Subprogram
Ecological
investigation
Subsurface
investigations
Slope stability
investigations
Navigation of
large ships in
confined waters
Nuclear
excavation
technology
TABLE 26-3
PRE-DESIGN INVESTIGATING PROGRAM
Objective
Programs oriented toward a
specific interoceanic canal route
To conduct a continuing investigation into possible
ecological consequences of constructing a canal, with
emphasis on the mixing of marine biota.
To determine enough detailed information about local rock
characteristics to choose the optimum alinement and appraise
material properties before detailed design begins.
Programs applicable to canal
construction in general
To investigate the stability characteristics of clay shale and
soft altered volcanic rocks to a point where the most
economical sections through such material can be specified.
To develop theory and data which will allow the design of
the most economical navigation prism to meet specified
requirements in large ship canals.
To develop the technology to the point where it can be
demonstrated feasible or infeasible for constructing an
interoceanic canal. The program should emphasize high-
yield row detonations in saturated rock.
*Assuming initiation of design in 1975.
V-302
Estimated Average
Annual Cost
1971 on $ 2,000,000
1971-1975
1971-1975
1971-1975
1971 on $10,000,000
PART VI
CHAPTER 27
CONCLUSIONS
Concerning the engineering feasibility of a sea-level canal:
Construction of an interoceanic sea-level canal is feasible now.
The feasibility of employing nuclear excavation techniques for this purpose has not
yet been established; consequently, if excavation of the canal were undertaken
within the next several years, it would have to be by conventional means.
No ecological factors have been identified which would preclude construction of a
sea-level canal; however, a number of possible environmental problems should
receive further study if it is decided to proceed with this project.
Concerning the best alternative for meeting projected traffic demands:
The best present means of meeting the initial requirement for a capacity of about
35,000 annual transits for ships with maximum size of 150,000 to 250,000 dwt is a
conventionally-excavated sea-level canal along Route 10.
— That canal should consist of a single channel 550 feet wide at a depth of 75
feet below mean sea level at its edges, with a parabolic bottom 10 feet deeper
along its centerline. Provision should be made for tidal gates until the
feasibility of operating the canal with unregulated flow is demonstrated.
— The Panama Canal should be retained as a supplemental facility and operated,
as needed, in conjunction with Route 10 as a single system.
— A canal built along Route 14 Separate having the characteristics described
above would meet the initial requirement at approximately the same cost as
Route 10. However, Route 14 is less desirable because it entails some risk of
prolonged interruption to Panama Canal traffic, its adverse environmental
impact is greater than that of Route 10, its construction eliminates the Panama
Canal as a supplemental facility, and its expansion capabilities are more limited
than those of Route 10.
Determination of the best means to achieve additional capacity should be deferred
until the sea-level canal has been in operation for several years. Alternatives
considered at that time might include:
— Relaxation of the conservative operating procedures that are contemplated in
this study.
— Construction of a bypass or lengthening of two-lane reaches in the sea-level
canal.
— Increased utilization of the Panama Canal, including construction of additional
locks.
— Conversion of the Panama Canal to provide a second sea-level canal.
— Construction of a second sea-level canal by nuclear means.
V-303
Concerning the use of nuclear excavation:
— If the decision to build a sea-level canal is deferred, the use of nuclear explosives for
its excavation should be reconsidered.
Concerning construction of a sea-level canal:
— Construction of a sea-level canal along the Route 10 alinement would take about
14 years, including 2 years for preconstruction planning and design.
— Total construction costs for this canal are estimated at about $2.88 billion.
— These estimates should be updated when authorization of construction is sought.
Concerning organization of the construction effort:
— Construction should be controlled and directed by a commission reporting directly
to the President.
— All funds required for construction should be budgeted and justified by the
commission which should have supplemental independent financing authority as
necessary to assure uninterrupted progress of the work.
— The commission’s organization in the field should be drawn from existing federal
construction agencies but should be made responsible only to the commission.
— Design and supervision of construction should be performed by the field
organization, with sufficient authority delegated to its chief to enable him to carry
out his responsibilities effectively.
— To the fullest extent possible, construction should be carried out under contract;
items of equipment which by their nature or size are peculiar to this project should
be Government-owned and made available to the contractors.
— The commission and its field organization should be dissolved upon completion of
construction.
Concerning the operation of a sea-level canal:
— The sea-level canal and the Panama Canal should be operated as a single system
under an independent Government agency or Government-owned corporation.
— The operating agency should have limited financing authority to provide for
maintenance and necessary improvements.
Concerning increasing Panama Canal capacity in lieu of constructing a sea-level canal:
— It is not practicable to meet the Commission’s stated transiting requirements
through major improvements of the Panama Canal.
Concerning actions to be taken now, unless the decision to build a sea-level canal is to be
deferred at least 10 years:
— Specific studies of the effects of a sea-level canal upon regional ecology should be
undertaken immediately.
— An extensive subsurface exploratory program should be conducted along the route
selected to determine the precise alinement of the canal before detailed design
begins. The Corps of Engineers, working in coordination with the Panama Canal
Company, appears to be most appropriate for this task.
V-304
Concerning actions to be taken now, regardless of when the decision is made to build a
sea-level canal:
The modernization program of the Panama Canal Company to expand the capacity
of its existing facilities to 26,800 annual transits should be pursued vigorously.
Nuclear excavation technology should be developed to the point where its
feasibility will be known by those who must make decisions on canal construction.
To that end, the joint Atomic Energy Commission — Corps of Engineers nuclear
excavation research program should receive continuing support.
The dynamics of ships moving through confined waterways should be fully
determined. The Corps of Engineers, in consultation with the Department of the
Navy and the Maritime Administration, should formulate and execute a program to
develop basic understanding of this subject.
Stability of high slopes in clay shales and soft altered volcanic rocks should be
investigated to the point where safe and economical slopes in such materials can be
designed. The Corps of Engineers, operating in coordination with the Panama Canal
Company, should continue its work toward that objective.
V-305
V-306
REFERENCES
Public Law 88-609; S.2701; 88th Congress, 2nd Session; 22 September 1964.
A Plan for Study of Engineering Feasibility of Alternative Sea-Level Canal Routes
Connecting the Atlantic and Pacific Oceans; Mimeographed with 12 Appendixes;
presented to the Atlantic-Pacific Interoceanic Canal Study Commission 17 September
1965.
Second Annual Report of the Atlantic-Pacific Interoceanic Canal Study Commission;
Atlantic-Pacific Interoceanic Canal Study Commission; July 1966.
Fifth Annual Report of the Atlantic-Pacific Interoceanic Canal Study Commission;
Atlantic-Pacific Interoceanic Canal Study Commission; July 1969.
Duval, Miles P.; And the Mountains Will Move; Greenwood Press; 1947.
Isthmian Canal Commission, Report... 1899-1901; Senate Document 222, 58th
Congress, 2nd Session; 1904.
Public Resolution #99; S.J. Rec. 117; 70th Congress; 1929.
Report of Interoceanic Canal Board; H.D. #139; 72nd Congress, 1st Session; 1931.
Public Resolution #85; 74th Congress, 2nd Session; 1936.
Report on the Panama Canal for the Future Needs of Interoceanic Shipping; H.D.
#210; 76th Congress, Ist Session; 1939.
Public Law 280; H.R. 4480; 79th Congress, Ist Session; 1945.
Report of the Governor of the Panama Canal Under P.L. 280, 79th Congress, Ist
Session; Mimeographed with 8 Annexes and 21 Appendixes; Governor, Panama Canal
Company; 1947.
Report on a Long-Range Program for Isthmian Canal Transits; H.R. #1960; 86th
Congress, 2nd Session, 1960.
V-307
20
22
23
24
27
28
Isthmian Canal Plans — 1960; Board of Directors, Panama Canal Company; 1960.
Isthmian Canal Studies — 1964; Panama Canal Company; 1964.
Report of the Interoceanic Canal Commission; Ex. Doc. #15; 46th Congress, Ist
Session; 1879.
Special Report of the Governor of the Panama Canal on the Atrato-Truando Canal
Route; Panama Canal Company; 1949.
Improvement Program for the Panama Canal — 1969; A.T. Kearney and Company,
Inc.; Chicago, Illinois; 1969.
Lothrop, S.K.; Handbook of Middle American Indians, Vol. 4, Archaeology of Lower
Central America; University of Texas Press; 1965.
Sander, D.; Panama Archaeolo., Vol. 2, No. 1, Fluted Points from Madden Lake; 1959.
Biese, Leo P.; The Prehistory of Panama Viejo; Smithsonian Institution, Bureau of
American Ethnology, Bulletin 191; 1964; pp. 1-52.
Kley, Ronald J. and Lutton, Richard J.; A Study of Selected Rock Excavations as
Related to Large Nuclear Craters; U.S. Army Engineer Nuclear Cratering Group; 1967.
Field Reconnaissance of Open-Pit Mines; 1OCS Memorandum JAX-44; Jacksonville
District Corps of Engineers; 1968.
Ideas for Peaceful Nuclear Explosives in USSR; Bulletin of the International Atomic
Energy Agency; May 1970; pp. 11-21.
Hirschfeld, R.C., et al; Engineering Properties of Nuclear Craters (T.R. 3-699), Report
3, Review and Analysis of Available Information on Slopes Excavated in Weak Shales;
U.S. Army Engineer Waterways Experiment Station; Vicksburg, Mississippi; Aug. 1965.
Final Report on Modified Third Locks Project; Department of Operation and
Maintenance, Panama Canal Company; 1943.
Herrmann, H.G. and Wolfskill, L.A.; Engineering Properties of Nuclear Craters (T.R.
3-699), Report 5, Residual Shear Strength of Weak Shales; U.S. Army Engineer
Waterways Experiment Station, Vicksburg, Mississippi; Dec. 1966.
Fleming, R.W., et al; Empirical Study of the Behavior of Clay Shale Slopes; Technical
Report #15; U.S. Army Engineer Nuclear Cratering Group; 1970.
V-308
30
31
32
SS
34
35
36
37
38
39
40
41
Summary of Discussions — Meeting of Board of Consultants for Conventional
Earthwork Construction Methods; 1OCS Memorandum JAX-96; Jacksonville District
Corps of Engineers; 1970.
Maclver, B.N.; The Formation of Initial Stability of Slopes in Cohesionless Materials;
PNE-5009; U.S. Army Engineer Waterways Experiment Station, Vicksburg, Mississippi;
Aug. 1967.
Engineering Properties of Craters and Principles of Crater Stability; 10CS Memo-
randum NCG-35; U.S. Army Engineer Nuclear Cratering Group; 1970.
Lutton R.J.; Natural Rubble Slopes and Their Relevance to Crater Fallback Slopes;
NCG TR-14; U.S. Army Engineer Waterways Experiment Station, Vicksburg, Missis-
sippi; 1969.
Slope Stability in the Choco Volcanics; 1OCS Memorandum NCG-34; U.S. Army
Engineer Nuclear Cratering Group; 1970.
Report of the Study Group on Interoceanic and Intercoastal Shipping; mimeographed,
submitted to the Atlantic-Pacific Interoceanic Canal Study Commission, Apr. 1970.
McAleer, J.B., et al; Evaluation of Present State of Knowledge of Factors Affecting
Tidal Hydraulics and Related Phenomena, Report #3, Chapter 10, Design of Channels
for Navigation; Committee on Tidal Hydraulics, Corps of Engineers, U.S. Army; May
1965.
Harleman, Dr. Donald R.F.; Numerical Computations of Tidal Currents in the
Proposed Sea-Level Canal; 1|OCS Memorandum JAX-27; Jacksonville District Corps of
Engineers; 1969.
Summary of Discussions — Meeting of Technical Associates for Geology, Slope
Stability, and Foundations; {OCS Memorandum JAX-93; Jacksonville District Corps of
Engineers; 1970.
Martin, W.E. et al; Possible Effects of a Sea-Level Canal on the Marine Ecology of the
American Isthmian Region; Battelle Memorial Institute; 1970.
Report of the National Academy of Sciences on Ecological Research for the
Interoceanic Canal; National Academy of Sciences; 1970.
H.R. 3792 and S. 2228; 91st Congress, 2nd Session; 1970.
Deep Draft Lock Canal Plan Conceptual Design and Cost Estimate; {OCS Memorandum
JAX-105; Jacksonville District Corps of Engineers; 1970.
V-309
42
43
44
48
$0
Questions and Answers on the St. Lawrence Seaway; St. Lawrence Seaway Develop-
ment Corporation; 1960.
Avery, Robert S.; Experiment in Management; University of Tennessee Press; 1954.
Little, Tom; High Dam at Aswan; John Day Company, New York; 1965.
CEBMCO Historical Report; U.S. Army Corps of Engineers Ballistic Missile Construc-
tion Office, Ballistic Systems Command, Air Force Systems Command; 1964.
The Snowy Mountain Scheme, History of Scheme; Snowy Mountain Authority;
Cooma, New South Wales, Australia; 1964.
Davis, E.W.; Pioneering with Taconite; Minnesota Historical Society, St. Paul,
Minnesota; 1964.
Siegfried, Andre; Swez and Panama; Harcourt, Brace and Company, New York; 1940.
Annual Report, Chief of Engineers; Department of the Army, Corps of Engineers;
1951-1960.
Cape Cod Canal, Gateway to America’s Intracoastal Waterways; U.S. Army Engineer
Division, New England; 1964.
V-310
TECHNICAL ASSOCIATES FOR GEOLOGY, SLOPE STABILITY
AND FOUNDATIONS
OF THE
ATLANTIC-PACIFIC INTEROCEANIC
CANAL STUDY COMMISSION
CONSULTING GEOLOGISTS CONSULTING ENGINEERS
FRANK A. NICKELL — San Mateo, Calif. ARTHUR CASAGRANDE — Cambridge, Mass.
ROGER RHOADES — San Francisco, Calif. PHILIP C. RUTLEDGE — New York, N.Y.
THOMAS F. THOMPSON — Reno, Nevada
March 2, 1970
Mr. Robert B. Anderson, Chairman
Atlantic-Pacific Interoceanic Canal Study Commission
726 Jackson Place, N.W.
Washington, D.C. 20506
RE: COMPARISONS OF
INTEROCEANIC CANAL ROUTES
Dear Mr. Chairman:
The scope and organization of the following report result from discussions during the
meeting with Commissioners Hill and Fields in San Francisco on January 28 and 29, 1970.
It consists of two main sections, one concerned with Routes 17 and 25 that require nuclear
excavation and the other with Routes 10, 14C and 14S that would be constructed wholly
by conventional excavation. The concepts and conclusions have evolved from association
with the investigation since its beginning in 1965 and from continuous review of the
extensive investigations and reports of the Corps of Engineers’ study groups. Detailed
technical recommendations, which were reported to the Corps of Engineers periodically
during the study, are not repeated herein.
The comparisons between routes have been based on considerations of geology and
engineering related to design and construction of a canal, in light of the existing state of
knowledge of effects on slope stability, to result in an evaluation of the relative merits,
disadvantages, uncertainties and risks of routes for a sea-level interoceanic canal. In the first
main section Routes 17 and 25 are compared assuming feasibility of nuclear excavation and
the feasibility assumption is then considered. In the second section comparisons of
conventional excavation routes are made between Route 10 and Routes 14C and 14S and
then between the latter two routes within the Canal Zone.
V-A-1
ROUTES REQUIRING NUCLEAR EXCAVATION OVER
PORTIONS OF THEIR LENGTH
Routes 17 and 25 require nuclear excavation of very deep cuts through the
mountainous sections to make them economically feasible. These routes are first compared
in their entirety and then the feasibility of nuclear excavation for canal construction is
discussed. Assuming that nuclear excavation is feasible, comparison of Routes 17 and 25
logically divides itself into the mountainous sections requiring nuclear excavation, the
lower-lying sections excavated by conventional methods, and requirements for diversion of
flood waters.
(1) Mountainous Sections
The continental divide on Route 17 is near the Atlantic side and is near the Pacific on
Route 25. The highest elevations are roughly the same but the length of high elevation for
Route 25 is somewhat less. The geology and basic types of rocks are similar and will permit
relatively steep excavation slopes such as might be produced by nuclear blasting.
On Route 25 it seems possible for reasons of geology that nuclear excavation could be
extended farther to the east than shown on the construction plan, thereby reducing the
requirement for more costly conventional excavation.
On Route 17 there is a second high ground section near the Pacific entrance. This
presents two distinct disadvantages; first, the geologic structure of the Pacific highland is
more complicated than in the continental divide and the rocks are less competent, creating
some uncertainty as to stability of slopes produced by nuclear excavation; and second, the
two separated sections requiring nuclear excavation doubles the number of interfaces with
conventional excavation sections. Such interfaces and transition zones between the two
types of excavation introduce uncertainties into design and construction. Design problems
include: (1) the selection of the points where the transition can safely be made, and (2)
determination of stable slopes for the transitions. Construction problems exist in extending
conventional excavation into the deep masses of broken rock created by larger nuclear
explosions.
In balance, the problems of nuclear excavation are less on Route 25 and this route is
the more favorable for nuclear construction if and when feasibility of the method can be
established.
(2) Conventional Excavation Sections
Route 17 includes a length of about twenty miles across the Chucunaque Valley where
the average ground surface is about Elev. 200. The underlying rocks are clay shales of the
Sabana beds in which the possibility of creating stable slopes by nuclear excavation
procedures is very unlikely. In fact, proper slopes for conventional excavation would have to
be developed for these weak rocks and some trial excavations would be required to establish
economical safe slopes. In addition, it is not yet known how far the weaker rocks of
formations bordering the Sabana Beds extend into the foothills of the Atlantic and Pacific
V-A-2
divide sections but geologically it seems possible that conventional excavation might have to
extend into relatively high ground, further increasing difficulties and costs.
In comparison Route 25 has a length of eighty miles across the Atrato Swamps but the
surface elevation for most of this length is close to sea level. Generally, the materials for the
full depth of the canal prism are soft organic deposits and unconsolidated soils which can be
removed by hydraulic dredging. Techniques for building a canal in such materials are well
established, no unprecedented methods are required, and no significant difficulties are
anticipated. It would also be easy to widen or to divide the canal into separate channels in
this section if sufficient space is left between protective levees in the initial planning.
In summary, the greater length of conventional excavation on Route 25 is more than
offset by absence of grave uncertainties in design and construction as compared with Route
17.
(3) Flood Diversion Requirements
Route 25 has the disadvantage of large volume rivers with heavy silt loads flowing
toward the alignment in its lower reaches. These flows would create unacceptable conditions
in the sea-level canal; large and long flood diversion channels are required on both sides of
the canal to carry the flood waters to safe discharge into the Atlantic, particularly on the
east side where the flood channel for the Atrato River approaches the size of the canal itself.
The penalty lies in volume of required excavation and cost, but no particular design and
construction difficulties are anticipated.
Head water river flows on Route 25 will enter the canal but the volumes of flow are
small and no particular difficulties are anticipated. On Route 17 it is planned to drop the
flows of the Sabana and Chucunaque Rivers into the canal. The flood flows here are
somewhat larger than the head water river flows into Route 25 and the silt load is expected
definitely to be larger, creating a requirement for maintenance dredging in the Route 17
channel. No particular difficulties are anticipated in developing a design for safe dissipation
of energy where the waters of these rivers are dropped into the canal.
Feasibility of Nuclear Excavation
Feasibility of excavation by nuclear explosions is discussed in terms of: (1) the present
situation, i.e., the possibility of its being used with assurance for interoceanic canal
construction within the next ten years; (2) the requirements for a continuing program of
nuclear testing to assure future feasibility: and (3) the possibilities of future applicability to
weak rocks such as the clay shales of the Chucunaque Valley. These discussions apply
exclusively to the physical development and configuration of craters which would result in a
usable canal and exclude all other effects of nuclear explosions such as seismic, air blast, and
radiological hazards.
(1) Present Feasibility
The Technical Associates are in unanimous agreement that the techniques for nuclear
excavation of an interoceanic canal cannot be developed for any construction that would be
planned to begin within the next ten years.
V-A-3
The reasons for this opinion are:
a. Extension of the scaling relations now established by tests to the much higher
yield explosions is too indefinite for assured design and the “enhancement†effects
due to saturated rocks and row charge effects now assumed have not been proved
by large scale tests.
There is a definite possibility of a major change in the mechanics and shape of
the crater formed by the much higher yield explosions required for the canal
excavations as compared to extrapolations from the relatively small-scale tests
carried out to date.
b. The effects of the strength of rock on the stability of “‘fall-backâ€â€™ slopes and the
broken rock crater slopes projecting above the fall-back to the great heights
required for an interoceanic canal have not yet been established.
Therefore, the Technical Associates conclude that nuclear excavation cannot
safely be considered as a technique for assured construction of an interoceanic
canal in the near future.
(2) Future Development
The economic advantages of nuclear explosions for excavation of the very deep cuts
required by an interoceanic canal are so great that the present ‘“Plowshare†program should
be continued, extended, and pursued vigorously until definitive answers are obtained.
Assured application of this technology to design and construction of an interoceanic canal
will require an orderly progression of tests up to full prototype size, including full-scale row
charge tests, in generally comparable rock types, terrain and environment. Such a program
may well require another ten to twenty years to establish whether or not nuclear excavation
technology can be used with positive assurance of success for construction ofa canal along
Routes 17 or 25.
(3) Application to Excavation in Clay Shales
A growing body of knowledge and experience indicates that high slopes in clay shales,
as in the Chucunaque Valley, or in more competent rocks underlaid by clay shales, as in
parts of the existing canal, may have to be very flat for long-term stability and to avoid the
danger of massive slides in the first few years after excavation. Some attempts have been
made to produce such flat slopes by elaborate explosive techniques, such as over-excavation
in anticipation of slides, multiple row charges, and successive series of explosions or
“nibbling†techniques for application to problems such as construction of a sea-level canal
across the Chucunaque Valley. The Technical Associates believe this to be a highly
unpromising line of investigation with minimal chances of developing procedures that could
be used with assurance in the foreseeable future.
ROUTES CONSTRUCTED BY CONVENTIONAL EXCAVATION
Routes which would be constructed wholly by conventional methods are Route 10
about ten miles to the west of the existing canal and generally outside of the Canal Zone
V-A-4
and Routes 14 Combined and 14 Separate both in the Canal Zone and near the existing
canal. The relative advantages, disadvantages, risks and uncertainties will be discussed first as
between Route 10 and either of the Routes 14 and second as between Route 14C and
Route 14S.
Experiences with slides in the excavated slopes of the existing canal near the
continental divide clearly demonstrate that achieving reasonably permanent slope stability is
a major problem and would be a large economic factor in the design and construction on
any of these routes. Comparisons herein are based primarily on uncertainties and risks of
instability of excavated slopes, with some attention to the stability of structures and
excavation spoil placed on top of the soft Atlantic mucks of the Gatun Lake area. All
comparisons relate to the alignments and excavation slopes presented in the final reports
prepared by the Corps of Engineers’ study groups operating under the supervision of the
Engineering Agent. It is recognized that some of the risks discussed herein have been
partially compensated for by adoption of different slope design criteria for the three routes,
as earlier recommended by the Technical Associates. The following discussion pertains to
remaining advantages, disadvantages, uncertainties and risks.
Comparison of Route 10 with Routes 14C and 14S
Route 10 has the following advantages: (a) it could be constructed and placed in
operation without hazard to or interferences with the existing lock canal which could be
maintained on a standby basis. A slide during construction or in the first few years of
operation, while undesirable, would not result in complete blockage of trans-isthmus ship
passages as it would on Route 14C or 14S. (b) A large part of Gatun Lake could be
maintained permanently at its present elevation by barrier dams, which would not be
particularly difficult to construct where Route 10 crosses the lake. (c) By virtue of its
separation from the existing canal and Gatun Lake, a large part of the excavation could be
accomplished in the dry by well-established construction methods. (d) Large portions of the
tremendous volume of excavation spoil could be transported to the Pacific and Atlantic
Oceans for useful construction of breakwaters and for disposal with the least effect on the
environment. (e) The terrain lends itself well to economical construction of a ship by-pass
channel near the middle third of the length, if increases in traffic should make this
necessary. This is not possible on Route 14.
A major disadvantage and uncertainty of Route 10 along the alignment presently
explored is that about eight miles of the length across the continental divide, the highest and
largest excavation volume part of the route, appears to be underlain by soft altered volcanic
rocks at depths which would have major unfavorable effects on stability of excavation
slopes. There is no precedent of excavation experience for the slope stability characteristics
of these soft altered volcanics but results of laboratory testing indicate that they may be at
least as weak as the clay shales which have caused severe slope instability along the existing
canal. Thus, relatively flat excavation slopes have had to be assumed, even when adopting an
“observational approach†in which trial slopes would be excavated and observed as full-scale
tests to determine the steepest safe slopes.
The critical geology and structure of the underlying formations on Route 10 is
completely masked by a thick basalt capping across the divide area. It must be assumed,
V-A-5
however, that similar structures and faulting as along the existing canal underlie the basalt.
Some geologic evidence indicates that lateral shifting of the alignment of the reach through
the continental divide, perhaps by a mile or so, might encounter more competent underlying
rocks. If so, the disadvantage of higher terrain might be more than compensated for by use
of steeper slopes, thereby reducing both excavation volumes and uncertainties. Therefore,
design studies for Route 10 should include explorations of offset alignments in search of the
best rock and geologic structure. This will require a very large number of core holes to
depict the geologic conditions adequately for reasonable design and will necessitate one or
more years’ lead time for accomplishment of these required investigations. It is the
geological consensus, however, that design explorations will not disclose subsurface
conditions that are worse than those along the line now explored and which are reflected in
use of conservative soft rock slopes for the entire eight mile length.
Routes 14C and 148 have the advantages of more extensive and complete subsurface
and surface geological explorations in the area of the existing canal and of smaller
excavation volumes due to the generally lower topography. An exception is the crossing of
Gatun Lake at its widest point where barrier dams to establish differences in water levels
may require large excavations and massive quantities of fill. Their disadvantages are almost
certain interferences with operations of the existing canal during construction, complete loss
of the existing canal during and after conversion to a sea-level canal, and loss of Gatun Lake
in its present form. There are also uncertainties and risks of major slides which are discussed
more fully in the comparison between Routes 14C and 14S.
Comparison of Route 14C with Route 14S
(1) Slope Stability
In the continental divide section Route 14C involves hazards of major slides which
could close the existing canal for long periods of time during construction of the new canal,
and which thereafter could block the sea-level canal. These hazards result from much deeper
excavations through sections where landslides have already been activated by construction
of the existing canal. They would be particularly serious during the period of rapid
drawdown required for conversion to a sea-level canal. While allowances for this hazard have
been made in recommendations for slope design, there still remain unknowns and
uncertainties concerning the effects of the rapid drawdown (in a period of about ten days)
on the stability of slopes where past sliding and stress readjustment have created major
planes of weakness.
Gold Hill presents a particular hazard to Route 14C. Observational records indicate that
this rock mass is moving erratically and is squeezing softer materials below its base upward
into the existing canal. It is believed that safe construction of Route 14C would require
unloading of Gold Hill which will significantly increase the volume of excavation.
By virtue of its separation through the critical divide cut length, the hazard of slides
blocking the existing canal are much less for Route 14S. It is possible that its excavation
could still endanger the stability of Gold Hill but both the hazard and magnitude of any
corrective unloading would be greatly reduced.
V-A-6
(2) Excavation and Excavation Spoil
Due to its location contiguous to the existing canal, Route 14C requires underwater
excavation of large volumes of rock, excavation to depths greater than 150 feet below the
operating water surface by construction procedures which are without precedent. In
addition, a large part of the divide cut excavation spoil would have to be hauled to disposal
in Gatun Lake which would drastically change the configuration of the residual lake. In
contrast, practically all of the divide cut excavation for Route 14S could be made in the dry
by methods for which there is ample precedent and a large part of the excavation spoil
could be disposed of in the Pacific.
Excavation spoil deposited in Gatun Lake, whether it be in the form of barrier dams or
non-functional waste areas, will rest on the soft Atlantic muck deposits forming the lake
bottom. Stability studies for barrier dams in the central portion of the lake have shown that
these weak materials create major dangers of massive slides during the rapid drawdown of
the lake to sea level, which is certainly required on the canal side of any spoil piles. Thus,
regardless of the intended purpose of the spoil piles, very flat side slopes and all of the
protective measures incorporated in the design of barrier dams will be required wherever the
spoil is not confined by existing rock islands. This condition applies equally to Routes 14C
and 14S although, for the latter, the volumes of spoil in the lake could be greatly reduced.
CONCLUSIONS AND RECOMMENDATIONS
On the basis of the considerations summarized in the preceding sections, the Technical
Associates for Geology, Slope Stability and Foundations have reached the following
conclusions and recommendations:
1. The physical feasibility of excavation of a sea-level canal by nuclear explosions is
not now established. Therefore, nuclear excavation cannot be recommended for
consideration for any canal that should enter construction within the next ten
years. However, if design and construction of a new interoceanic canal are to be
deferred one or more decades, nuclear excavation techniques hold promise of such
great economic advantages that investigational and testing programs, as recom-
mended in this report, should be pursued vigorously, but with the following
exception. Attempts to excavate stable slopes in deep cuts in clay shale rocks by
explosive procedures are so unlikely to produce acceptable or safe result that
further investigations or tests in this direction are not recommended.
2. Assuming that nuclear excavation is now a feasible assured construction technique
and in terms of the technical uncertainties and risks then remaining, the choice
between Routes 17 and 25 is decisively in favor of Route 25 in spite of its greater
length.
3. For routes constructed by conventional excavation the advantage of Route 10
being separated from the existing canal far outweighs potential difficulties and
uncertainties in comparison with Routes 14C and 14S. If this route is selected, the
Technical Associates recommend that the existing canal be maintained in an
operational condition for at least ten years after a new separate canal has been
placed in operation. By having the existing canal available in the event of a
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temporary blockage of the new canal, Route 10 would justify economies which are
inherent in an observational approach to the selection of design slopes, but which
involve some risk of slides after completion of construction.
If for reasons not considered herein a route within the Canal Zone is considered
imperative, construction of Route 14S introduces substantially fewer hazards and
uncertainties than Route 14C. Route 14C would result in filling large portions of
the Gatun Lake area with excavation spoil, which is not necessary for Route 14S,
and has substantially increased hazards of canal blocking slides caused by the
drawdown of water levels accompanying conversion to a sea-level canal. Major
geologic surprises are not anticipated on these routes.
A valid comparison cannot be made between Routes 10, 14C and 14S, all of which
would be excavated entirely by conventional means, and Routes 17 and 25, both
of which require nuclear excavation for the planned construction. Nuclear
excavation is not yet a proven construction technique and there is no assurance
that construction plans and cost estimates based on present knowledge are valid.
Therefore, dollar cost comparisons at this time have no true significance. The
comparisons presented herein between Routes 17 and 25 are based on the
assumption that assured feasibility of nuclear excavation can be developed by tests
over the next decade or two, at which time construction on Route 25 might be
planned with some confidence. If earlier construction of a sea-level canal should be
recommended by the Commission, it is urged that the route selection be restricted
to Routes 10 and 14S which can be constructed by presently known techniques of
design and excavation.
The Technical Associates for Geology, Slope Stability and Foundations hope that this
report, based solely on technical considerations of risks, uncertainties and favorable aspects
of the several routes considered for a sea-level canal, will be of assistance to the Commission
in its final deliberations and recommendations.
PCR:he
Respectfully submitted:
thir (A
Arthur Casagrande, Consulting Engineer
Fach awn ;
Frank A. Nickell, Consulting Geologist
Roger enoaien Consulting Geologist
Thomas F. ompson, Consyiting Geoldgist
V-A-8
BOARD OF CONSULTANTS ON CONVENTIONAL
EARTHWORK CONSTRUCTION METHODS
OF THE
ATLANTIC-PACIFIC INTEROCEANIC
CANAL STUDIES
L. Garland Everist J. Donovan Jacobs
Western Contracting Corporation Jacobs Associates
Grant P. Gordon Lyman D. Wilbur
Guy F. Atkinson Company Morrison-Knudsen Company, Inc.
July 9, 1970
General R.H. Groves, Engineering Agent
Atlantic-Pacific Interoceanic Canal Study Commission
Office of the Chief of Engineers
Washington, D.C. 20315
Dear General Groves:
The Board of Consultants on Conventional Earthwork Construction Methods was
organized in the latter part of 1966. It visited the Panama Canal Zone in October 1966 and
has met on six subsequent occasions, the last being in July of 1970. All meetings except the
last were arranged by the Jacksonville District of the Corps of Engineers of the United
States Army with presentations by the Corps of the status of studies to date and proposed
method of attack to arrive at the best solution to date. At each meeting the Board was asked
a number of questions that were answered in writing. During discussions at each meeting the
Board was asked to criticize freely the work that had been accomplished by the Corps since
the previous meeting. The Board did so, as well as offer suggestions as to methods,
production, equipment systems and type of management and construction organization.
Since the Corps’ report reflects most of the Board’s suggestions and comments, we will not
try to repeat them here. However, it may be of interest and useful for the Board to make
the following observations with reference to the studies:
1. PRESENT SCOPE OF INVESTIGATIONS. The studies on conventional excavation
methods prepared by the Commission have been made in an excellent manner and
result in sound conclusions using the data presently available. It appears that all
reasonable alternates have been considered and properly weighed in an effort to
arrive at the best solutions of construction systems and costs. Since it will be some
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time before construction will actually begin, new information and factors will no
doubt cause some changes in methods and estimates. We believe that the estimates
are adequate to compare the various alternates and properly evaluate their relative
merits and determine the probable actual cost.
CONTINGENCY FACTORS. We have found that the Corps has been most anxious
to get the best thinking possible into their studies. They have welcomed our
suggestions and modified their estimates to conform to our ideas with one
exception and that is an item of contingency. Most contractors in estimating a
project of the magnitude of the proposed sea-level canal take into account the
uncertainties of effect of weather, production, support items left out of the
estimate, and other factors by making their best estimate of cost and then adding a
contingency factor of from 5 to 10% in addition to their expected profit. We
believe that the 6% included in the estimates for contractor’s profit should be
increased by another 5 to 10% to cover the construction contingency. This is not
to be confused with the usual engineer’s contingency of 5 to 10% to cover changes
in quantities or design. The contractor’s profit usually does not exceed 6% but the
extra costs represented by the contingency item do occur.
This addition to cost is not important in making comparisons for route selection,
as all costs would be adjusted proportionately. Also this increment of cost will no
doubt be overshadowed by the effects of escalation, and changes in available
equipment before the project is actually constructed. This item should be
considered as indicative of the range of accuracy of the estimates. In making
authorizations and appropriations, it should be taken into account.
EFFECT OF SLOPE CHANGES AFTER START OF CONSTRUCTION. It is
recognized that it is uneconomical to excavate side slopes to an absolutely safe
slope that would eliminate all slides. It has been suggested that an experimental
section of the canal be excavated to assist in determining the best slopes for the
balance of the excavation. Because of the high cost of such an experiment, the time
involved and the effect of its interference with the overall construction scheme, the
Board believes it to be more desirable to spend efforts on drilling to obtain more
subsurface information on which to base the design of side slopes.
The slopes should then be designed reasonably safe based on the best practice
and interpretation of subsurface exploration and the experience on the present
canal. After construction starts the slopes can be changed as the work progresses if
found necessary. It must be recognized that the cost of flattening the slopes will be
considerably greater per unit of quantity than the original excavation.
FEASIBILITY. The proposed interoceanic canal will be the largest earthmoving
operation ever attempted. Nevertheless construction on any of the routes can be
accomplished with conventional equipment and within a construction period of 10
to 14 years. Because of the large numbers of giant-sized equipment units needed,
two years will be required to mobilize for the major excavation effort. Because of
the much greater quantities of excavation on Routes 17 and 25, the cost will
greatly exceed the cost for Routes 10 and 14 unless nuclear excavation is proved
feasible.
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Although improved construction equipment and methods will tend to reduce
costs, it can be expected that the increasing wage and price spiral will more than
offset equipment advances so that excavation costs will increase during the next
decade.
EQUIPMENT SYSTEMS USED. The equipment systems used in the estimates are
all well established and have proven out in actual practice on many of the
construction jobs and mining operations being performed today. The principal
difference between present operations and those proposed for the interoceanic
canal is the magnitude of the job and the requirement to assemble in one place and
at one time the largest fleet of jumbo-sized equipment ever attempted to date. No
two construction projects are ever exactly the same so that it is impossible to base
estimates on actual overall costs on previous jobs. However, the various elements in
a job have usually occurred previously on some other work so that the elements
can be combined to represent the overall conditions expected on the project under
consideration. This has been the approach for the interoceanic canal studies.
In an area of high rainfall the effect of weather must be taken into account. A
barge or waterborne equipment system is the least affected by rainfall. Systems
involving rail operations are affected less than systems relying on trucking, which is
the most adversely affected in areas of high rainfall.
Use of barrier dams to permit excavation of the Gatun Lake portions of Route
14 has been considered. However, the final estimates have been based on deep
dredging with suction dredges, draglines and dipper dredges without the use of
barrier dams. Although the depth of dredging required has only recently been
successfully accomplished with suction dredges, the Board anticipates no serious
problems in using this method in Gatun Lake. The Board believes the problems
involved using this method will be less than with barrier dams.
The cost estimates have taken into account the weather factor by utilizing a
truck-oriented system to excavate only in the higher elevations where rail or barge
transportation is the most costly. Comparative estimates have been made for both
barge and rail-oriented systems for various parts of each route with the least costly
system being adopted as the project estimate. Suction dredging for the Atlantic and
Pacific approaches rounds out the four systems used in the cost estimates for the
various parts of conventionally excavated routes. The Board concurs in this
selection as being most appropriate for arriving at the soundest cost estimates based
on present technology.
OTHER EQUIPMENT SYSTEMS. The wheel excavator with transportation by
conveyor belt has been adapted to large scale excavation in recent years. Under
suitable conditions, this is an ideal system but unfortunately the conditions of
weather and material along the various canal routes do not appear to fit this
system.
The front end loader is rapidly replacing power shovels for excavating and
loading hauling equipment. It may be that by the time construction on the
interoceanic canal starts that this tool would be further developed so that it would
replace some of the power shovels now contemplated. However, it is unlikely that
the cost estimates would be greatly affected by such a change.
V-B-3
8.
Self-propelled scrapers are an effective tool for excavating and moving
equipment medium distances. It is probable that some of the excavation estimated
for shovel and trucks will actually be accomplished with scrapers. However, the
effect on overall costs will be negligible.
Some of the excavation in the medium hard rocks has been estimated using
barge mounted draglines and shovels (dipper dredges). Some of this excavation
could be handled by suction dredge but the Board believes this method would not
result in any reduction in cost.
PREFERABLE ROUTES FOR INTEROCEANIC CANAL. Of the five routes (10,
14C, 14S, 17 and 25) considered by the Board, Route 10 is the most preferable
from a conventional construction standpoint. Access and interference with other
installations or activities are important considerations. None of the routes present
any obstacle that cannot be met and overcome by the competent constructor.
However, Routes 17 and 25 are in remote areas and will require more effort to
provide support facilities as nothing is presently available, thus requiring the
building of 100% of the support. This will take time as well as money and would
delay start of construction on the canal. Also the local labor supply is negligible as
compared to Routes 10 and 14C or 14S. The adverse effect on these two routes
can be measured by the cost involved. Route 10 is more remote than either 14C or
14S and would require some additional support facilities, such as roads. However,
it is close enough to the existing Canal Zone, Panama City and Colon, so that the
housing, personnel, utilities and other facilities now available to the existing canal
could be utilized to the fullest extent. Some additional transportation of personnel
would be required for Route 10 as compared to Route 14 (about 10 miles per
day). This would also involve another quarter hour of time for personnel living in
existing facilities to be away from home. This is not considered a serious matter
but might add a little to cost of labor.
The principal advantages in Route 10 over Routes 14 are two-fold; (1) that it is
sufficiently remote from the existing canal to remove the restrictions that would be
required for blasting and waterborne traffic on Routes 14, and (2) that it permits a
wider choice of equipment systems. Route 14C requires the most wet excavation
with waterborne equipment. Route 14S requires less wet excavation but much
more than for Route 10, where all excavation except the Atlantic and Pacific
approaches could be in the dry. Alternatively, practically all of Route 10 could be
accomplished by barge haul if that ultimately was determined to be the cheapest.
In the Board’s review of the cost of conventional excavation portions of Routes
17 and 25, we did not give any consideration to the additional cost of excavating
through the large masses of broken rock that would have to be excavated where the
conventional excavated canal connects to the nuclear excavated canal. The costs of
this excavation might greatly exceed that of non-disturbed material. Although
allowances have been made in the estimates for the extra cost of excavating this
broken material, there is no past experience that gives a firm basis for being assured
of the costs involved.
ORGANIZATION AND MANAGEMENT OF THE CONSTRUCTION EFFORT.
To manage the construction of the canal, anew Government agency, not bound by
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tradition and present rules, should be established, drawing on personnel from the
Corps of Engineers, Naval Facilities Engineering Command, Bureau of Reclama-
tion, and outside sources.
The canal should be constructed by competitive unit price contracts, with
provisions covering escalation of costs and advance payment for equipment. By
proper advance planning, this can result in the use of the most efficient equipment
system.
In order to take advantage of the ingenuity of American contractors, the
equipment required for the job should be purchased and owned by the contractors
with advance payments being made to cover its cost, transportation and
installation. While some advantages would accrue in standardization if the
Government were to buy and own the equipment, this gain would be more than
offset by the loss in efficiency in a contractor being required to utilize equipment
that was not suitable to the job as units that he might devise or procure.
9. TYPE OF CONTRACT. Because of the size of the contracts and the overall time
for constructing the project, it will be necessary to provide unusual features in the
contracts. Most contractors hesitate to enter into fixed price contracts that will
extend for more than a period of four or five years. The construction period for
the interoceanic canal will last 10 to 14 years in addition to the two years required
for equipment procurement. The objection to long term fixed price contracts may
be alleviated by providing for escalation of labor and material costs and/or by
providing for renegotiation at the end of five or six years. One type of contract
that we believe would be suitable to the construction industry would provide for
(a) operations during the entire equipment procurement and construction period;
(b) firm prices for a four-year period from date of contract (although escalation
from start of construction would reduce the contingency and might lower
costs);
(c) payment for equipment, freight and erection as costs are incurred by the
contractor;
(d) escalation payments to cover 90% of increased costs of labor, materials and
supplies after the first four years of the contract.
Another type of contract could require firm prices for a fixed period, after
which the contract would be renegotiated on the basis of proven increases in cost
due to escalation and possibiy other factors. If a price satisfactory to all parties
could not be negotiated, the Government agency would take over the contractor’s
equipment on a predetermined basis and re-advertise for the completion of the
work.
For any type of contract the Government agency in charge should require the
bidder to list in detail the major items of plant, equipment and plan of operation to
be used with the requirement that there be no changes unless such changes are
approved by the agency. The agency should reserve the right to award the contract
to other than the low bidder if it is not satisfied with the system proposed by the
low bidder. Prequalification of bidders should be considered.
10. CONTRACT PACKAGES AND THEIR SIZE: Construction of housing, roads,
utilities, power supply, docks and other support facilities should be let by separate
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contract at as early a date as possible after it is decided to proceed with
construction of the canal. These contract awards should be followed as soon as
possible by the letting of the major earthwork contracts so as to allow for as much
time as possible to procure plant and equipment.
In order to give the smaller contractors a chance to obtain a portion of the work,
the shovel and truck operations planned for the upper levels in the Continental
Divide section of the canal should be broken down into the smallest sizes that the
agency believes can be effectively administered. (The size of these packages would
be in the $5-20 million range.) However, a number of these smaller packages should
be let at the same time with the bidders being given an opportunity to tie together
any number of the packages they may want to accept, if by so doing the price is
lower than would be the case if the packages were let separately. Presumably most,
if not all, of the smaller contracts would be for a relatively short construction
period and it might not be necessary to provide for escalation or renegotiation.
Dredging might be let in small individual packages but in order to attain the
lowest costs any small packages should be bid simultaneously so that bidders could
tie together as much as they would want to accept in order to give the best price.
In order to take advantage of large equipment the major part of the work,
presently scheduled to be accomplished by shovel and rail or shovel, dragline and
barge haul, must be let in as large packages as is possible without eliminating the
desirable competition. Although not many contractors are able to bid on jobs in
the $100-400 million range, recent years have seen contractors forming joint
ventures to bid on jobs in excess of $400,000,000 (Tarbella Dam). The Board
believes that there would be adequate competition if the work packages were kept
under $500 million (1970 dollars). This is particularly true if the contractor is
relieved of the financial burden of the plant and equipment as recommended
herein. If the design of the canal involves required fill as well as excavation, the fill
must be tied to the excavation from which it will come, in a single package.
11. ADVANCE PLANNING, AUTHORIZATION AND APPROPRIATIONS. Advance
planning will require appropriations of funds before construction funds are
required. These should be made available at an early date.
Before construction starts, the Congress should give assurance that appropria-
tions will be made in sufficient amount and over a sufficient period of time so as to
permit construction of the canal by the use of the most efficient equipment
systems and economical contractual arrangements.
The estimates of cost above referred to are predicated on adequate financing to
meet the requirement of the work program. Delay in the planning sequence will
develop an inordinate increase in costs.
We recommend that during the precontractual stage the planning agency
convene at least three nationwide conferences of contractors, equipment suppliers,
and other interested parties for the purpose of familiarizing them with the project
and its problems. The conferences spaced six months or more apart should be
carefully organized and skillfully conducted over a period of two days or more.
The Board of Consultants on Conventional Earthwork Construction Methods trusts that
this report will be of assistance in the determination of the route and construction
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management of the Interoceanic Canal. Representatives of the Construction Industry
welcome the opportunity of participating in the development of projects such as the
interoceanic canal as it gives an opportunity to present its views and thereby assist the
Government in arriving at the best solution to its problem. A wealth of construction
knowledge and experience is available for the asking. The Board considers it a privilege to
have been given an opportunity to express its views to the Commission.
Respectfully submitted:
L. Garland Everist
Pikes
Grant P. Gordon
Lyman D. Wilbur
V-B-7
V-B-8
ROUTE 15 ENVIRONMENTAL IMPLICATIONS STATEMENT
Environmental Statement Pursuant to National Environmental Policy Act of 1969 (P.L.
91-190), Section 102(2) (C) for Modification of Panama Lock Canal.
Project description: The plan for modernization and expansion of the Panama lock
canal is designed to improve upon the capability of the present facility by increasing
capacity, updating operations and maintenance characteristics and reducing its vulnerability
to military attack or sabotage. The need for such improvements is indicated by the
limitations of the present canal. In 1970 there were approximately 1,300 ships afloat, under
construction or on order which could not pass through the existing locks under any
conditions. Approximately 1,700 others could not pass through fully laden. An even more
serious limitation is that part of the route is above sea level, and a considerable volume of
water is required for the operation of the locks needed to raise and lower the ships during
passage. The steady increase in transits, now over 15,000 per year, points out the need for
providing more lockage water. Recycling lockage water or pumping seawater must begin
within the next several years, undoubtedly before a sea-level canal would be built. As the
demand increases, the average transit time will also increase, causing expensive delays.
Projections of the postwar demand rate indicate that the number of ships desiring to use the
canal would exceed 19,000 per year before the year 2000.
The Panama Canal runs generally in a northwesterly direction from Balboa on the
Pacific coast to Cristobal on the Atlantic. The Miraflores Locks, a double-lift twin-lock
structure which raises vessels 54 feet from the level of the Pacific Ocean to Miraflores Lake,
are about 6 miles inland from the Pacific. Pedro Miguel Locks, a single-lift twin-lock
structure at the other end of this 1-mile-long lake, raises vessels to Gatun Lake at elevation
85 feet. From these locks the canal passes directly into Gaillard Cut, which extends for 8
miles through the Continental Divide. From the cut’s north end near Gamboa, the canal
follows a 23-mile irregular course through Gatun Lake to avoid islands and peninsulas. At
the north end of the lake are the Gatun Locks, triple-lift twin-locks which lower vessels to
sea level about 2 miles inland from Limon Bay. The total length of the Panama Canal,
including approaches, is 48 miles. The 12 lock chambers are 1,000 feet long, 110 feet wide
and have limiting depths of 40 feet over the sills. The minimum navigation prism is 500 feet
wide by 42 feet deep, with about 3 additional feet of overdepth. The existing facilities will
accommodate ships up to about 65,000 dwt.
The plan developed for an improved lock canal incorporates the most desirable features
of previously proposed lock canal plans. Provision was made for transiting 150,000-dwt
ships and flatter excavation slopes were assumed than those of earlier designs. This plan calls
for adding a lane of triple-lift locks to the existing 2 lanes at Gatun, and constructing a
separate lane of triple-lift locks at Miraflores to raise 150,000-dwt ships into a bypass
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around Pedro Miguel at the level of Gatun Lake. It has the advantage of permitting
continued operation of all existing locks throughout their useful lives and could
accommodate 35,000 transits per year. When the existing locks could no longer be used
economically their replacement could be accomplished with minimum interference to traffic
and would consolidate all three lifts on the Pacific side at Miraflores, raising Miraflores Lake
to the level of Gatun Lake.
An improved lock canal would have the inherent handicap of requiring extremely large
quantities of lockage water. This requirement can be met by pumping ocean water into
Gatun Lake, or possibly by recirculating fresh water. The first method would render Gatun
Lake brackish, thus changing some ecological characteristics of the area, while the second
would involve unusual engineering problems. Both methods would entail costly pumping
operations.
Construction would interfere with traffic through the Gaillard Cut, Miraflores Lake,
and Pedro Miguel and Miraflores Locks.
The construction effort involved would be about evenly divided between lock
construction and channel excavation. The new locks would take advantage of the Third
Locks excavations made in 1940-1942. Excavation would be accomplished mainly by dipper
dredges and spoil would be removed in scows. Construction would take about 10 years and
cost about $1.5 billion. Additional costs would be incurred when the existing locks require
replacement.
The authority for this study was established by PL.88-609 on 22 September 1964, with
a basic charge to create a Commission to investigate, study and determine a site for the
construction of a sea-level canal connecting the Atlantic and Pacific Oceans. The date of the
Commission’s report to the President, as amended by PL. 90-359 on 22 June 1968, is 1
December 1970.
The environmental setting without the project: The narrowest part of the American
Isthmus lies in and adjacent to the existing Panama lock canal. It is also the area of lowest
topography. The isthmus at this point runs nearly east and west and at its narrowest point is
about 40 miles in width (between Limon Bay on the Atlantic and the Gulf of Panama on
the Pacific). The Continental Divide roughly parallels the Pacific coast, about 10 miles
inland. Local hills in the divide in this area rise to about elevation 1,200 feet. A secondary
divide at a lower elevation parallels the Atlantic coast. It was geologically pierced by the
Chagres River at Gatun, but the original gap has been closed by Gatun Locks and Dam. The
drainage area of Gatun Lake lies between the two divides.
The existing Panama Canal has been constructed across the narrowest portion of the
isthmus generally following the river valleys. The Canal Zone is a strip of land across the
Isthmus of Panama extending generally 5 miles on each side of the centerline of the canal. It
includes also the areas contained within the 100-foot contour around Gatun Lake and the
260-foot contour around Madden Lake, but excludes the cities of Panama and Colon.
Panama’s population centers, Panama City (population 415,000) and Colon (population
85,000), are situated at the ends of the Panama Canal and linked by a railroad and a two-lane
highway. Both cities have available the excellent harbor facilities of the Panama Canal
Company at Cristobal on the Atlantic side and Balboa Harbor on the Pacific.
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The geology of the divide area is complex and characterized by wide variations over
short distances between competent rock and materials of very low strength. The terrain on
the Pacific side, which includes the Continental Divide, is dominated by conical hills capped
by basalt or agglomerate and surrounded and underlain by weak sedimentary and
pyroclastic rocks. Materials in the central sector of this area vary from clay shales and soft
altered volcanics to relatively strong sandstone basalts. The ridges of the Atlantic coast
consist of medium hard sandstones.
The Canal Zone has a typical low-latitude tropical climate. Temperatures are
moderately high, averaging about 80 degrees, and rarely exceeding the extremes of 65 and
95 degrees. Relative humidity varies with rainfall. Annual average humidity is about 80
percent and has an average variation from 75 percent in the dry season to 90 percent during
the wet season. The Atlantic coast generally experiences higher winds and almost twice the
precipitation of the Pacific coast. Annual migration northward in the spring and southward
in the fall of the northeast tradewinds and doldrums divides the year into well-defined wet
and dry seasons. The dry season is normally from mid-December to mid-April and the wet
season the other eight months. October and November have the highest precipitation with
rain occurring nearly every day. Seasonal changes may vary as much as one month either
way. High-intensity thunderstorms have occurred in every month except February.
The Atlantic and Pacific marine species are closely related, even though few are
identical. This condition reflects the fact that these oceans were united until recent
geological time, probably three to four million years ago. In general, the Atlantic ecosystems
provide more habitat diversity than the Pacific. The differing adaptations and competitive
abilities of the biota reflect the differences in environment on either side of the Isthmus.
The Atlantic coastal environment would generally be characterized as mild and constant
compared to relatively rigorous and variable features on the Pacific coast. The Pacific
undersea slopes are very gently sloping with the 10-fathom isobath varying between 5 to 7
miles offshore. The Atlantic shelf is much steeper with very little area less than 5 fathoms
deep.
The Pacific tide is semidiurnal with a maximum range of about 21.1 feet and a mean
range of about 12.7 feet. The Atlantic tide is very irregular with a maximum range of about
2 feet and mean range of about | foot.
The Atlantic waters exhibit a narrow temperature range for depth and season compared
to the slightly cooler Pacific. While the salinities at the Pacific end of Route 15 may
approach those of the Caribbean during the dry season, wet season salinities are 4 to 6
percent lower.
Turbidity of Pacific waters tends to be higher than that of the Atlantic. Its nutrient
content, benthic biomass and primary productivity are also higher. Food chains are longer in
Atlantic ecosystems.
The environmental impact of the proposed action: The proposed plan will produce two
prime environmental conversions. One modification involves altering Gatun Lake by
pumping in seawater to increase the supply of lockage water. This would render the lake
slightly saline and modify its ecology considerably.
Excavations would produce spoil that would have to be placed in adjacent forested
areas with a resulting regression in successional status. The rate of biotic development would
V-G-3
be largely determined by the fertility and diversity of the spoil. Igneous material from deep
excavations would resist weathering and would be expected to require many years before
reestablishment of mature plant communities. Due to differences in geologic origin of spoil
as well as differences in regional and internal drainage, parent material weathering history
and successional status, returning plant and animal communities would not be fully identical
to the original ones.
Associated with the environmental conversions and the attendant construction activities
are additional environmental impacts. Hard rock haul roads and access roads would modify
considerable terrain through surfacing and clearing. The increased size and number of ships
and the increased salinity of Gatun Lake would allow increased passage of ocean biota
through the canal in ballast water, attached to ship hulls or by being locked through.
Any adverse environmental effects which cannot be avoided should the proposal be
implemented: Project construction would commit areas of land and water to the
environmental conversions previously discussed. Existing flora and habitats would be
eliminated through these changes while fauna would be either displaced or eliminated
depending on its specific nature.
Hydraulic and dry spoil placed in forested areas would result in destruction of
vegetation, burial of detritus layers of the soil and increased sediment load on the region’s
waterways. This has the effect of regressing successional stages to less diverse, less
productive, and thus less stable ecosystems. Unvegetated spoil areas may be considered by
some to present a stark contrast (aesthetically) to the lush tropical vegetation of the region.
As increasing quantities of seawater are introduced into Gatun Lake, manyof the plant
and animal species would be expected to be eliminated.
Alternatives to the proposed action: The alternatives of location and method of
construction have been narrowed down to Routes 10 (Chorrera-Lagarto, Panama), 14
(Panama Sea-Level Conversion) and 25 (Atrato-Truando, Colombia). All routes involve
concerns of mixing biota from the two oceans through sea-level construction. Similarly,
these alternatives present greater modification of environment through more extensive
excavation, spoil disposal and associated stream diversion and flood control structures.
Routes 10 and 14 are comparable in terms of environmental impacts but Route 14 has
the disadvantages of interfering with operation in the present canal during construction and
eliminating it at the time of its completion. Route 25 is about twice their length, and
requires a much greater volume of excavation. Nuclear excavation on this route introduces
the concerns of radionuclide transfer and accumulation; genetic alteration of organisms;
airblast, ground shock and ejecta damage; and the need for human evacuation and exclusion
during excavation and for many months thereafter. All these sea-level routes would
accommodate more and larger ships than would an improved lock canal at an increased cost.
Panama’s geographical setting is its greatest natural resource, one which can be
exploited indefinitely without being expended. The short-term goal of increasing canal
capacity will serve a long-range goal of general economic development without significant
ecological concern.
V-C-4
The relationship between local short-term uses of man’s environment and the
maintenance and enhancement of long-term productivity: An interoceanic canal already
exists in Panama and the development of the region depends primarily upon it. Plans are
underway to increase its capacity by pumping seawater into Gatun Lake for increased
lockages. Construction of the proposed major modifications to the canal will change only
the rate of environmental evolution in the region.
Any irreversible and irretrievable commitments of resources which would be involved in
the proposed action should it be implemented: The loss of the flora, fauna and habitats of
the construction areas and spoil disposal sites would be inherent in the project. More rapid
salinization of Gatun Lake would occur with probably deleterious effects on some of the
lacustrine ecology.
ROUTE 10 ENVIRONMENTAL IMPLICATIONS STATEMENT
Environmental Statement Pursuant to National Environmental Policy Act of 1969 (P.
L. 91-190), Section 102(2)(C) for an interoceanic sea-level canal across Panama.
Project description: Route 10 is the designation given to a proposed sea-level canal to
be constructed by conventional techniques along a 53-mile route adjacent to the Canal Zone
region of central Panama. This project is designed to improve upon the capability of present
Isthmian transit by increasing capacity, updating operations and maintenance characteristics
and reducing vulnerability to military attack or sabotage. The need for such a canal is
indicated by the limitations of the present facility. In 1970 there were approximately 1,300
ships afloat, under construction or on order which could not pass through the existing locks
under any conditions. Approximately 1,700 others could not pass through fully laden. An
even more serious limitation is that part of the route is above sea level, and a considerable
volume of water is required for the operation of the locks needed to raise and lower the
ships during passage. The steady increase in transits, now over 15,000 per year, points out
the need for providing more lockage water. Recycling lockage water or pumping seawater
must begin within the next several years, undoubtedly before a sea-level canal would be
built. As the demand increases, the average transit time will also increase, causing expensive
delays. Projections of the postwar demand rate indicate that the number of ships desiring to
use the canal would exceed 25,000 per year before the year 2000. A sea-level canal would
avoid these limitations and be less expensive to operate and maintain. Blockages by scuttled
ships or bomb-induced slides are likely to do no more than slow down passage of combat
vessels and medium size merchant ships, and could be removed relatively rapidly.
The Pacific terminus of Route 10 is at the town of Puerto Caimito at the mouth of the
Caimito River. The alinement heads northwesterly over the Continental Divide and Chorrera
Gap and across arms of Gatun Lake near La Laguna and Escobal. The route terminates at
the point where the Lagarto River joins the Caribbean coast.
Most of the excavation along Route 10 would employ open-pit mining techniques,
using rail haul for spoil disposal. Truck haul would be used at higher elevations, while
WEC"S
dredges would excavate the approach channels. Barrier dams would maintain Gatun Lake at
levels needed for operating the Panama Canal during construction, at the same time
permitting excavation at controlled water levels or in the dry. Muck underlying the sites of
these dams would be removed by hydraulic dredging, after which spoil from dry excavation
would be brought in to construct the embankments.
Diversion of streams on Route 10 would be relatively simple because their drainage
basins are small. Most streams would be diverted into the Caribbean Sea; the Caimito River
would be the only stream of consequence to discharge into the canal.
Because construction and operation of Route 10 could be supported largely from
existing facilities in the Canal Zone and the metropolitan area of Panama, supporting
construction requirements would be minimal. Required items would include a transisthmian
highway crossing Gatun Lake over the barrier dams; breakwaters on the Caribbean coast; a
jetty on the Pacific; and a high-level bridge over the canal.
Reduction of tidal current velocities within the canal would require the use of tidal
checks. Under a 2-knot current limitation, expansion beyond the minimum design capacity
would require construction of a bypass. The alinement is well suited for a centrally located
bypass, excavated through the Gatun Lake reach.
The relatively short length of Route 10 and the high Pacific tides would cause currents
greater than 2 knots in an unrestricted channel for short periods of almost every tidal cycle.
Unless experience proves that ships can transit safely in currents faster than 2 knots,
continuous use of tidal checks would be required. This would set capacity at 38,000 transits
per year.
Physical conditions at either end of the alinement are not favorable to shipping. On the
Atlantic side, breakwaters would be necessary to overcome the lack of natural protection.
The Pacific offers more protection but the approach channel would have to be dredged
about 15 miles into the Gulf of Panama. Both approaches would be dredged to 85- by
1,400-foot dimensions.
The design channel would cost about $2.88 billion and take 14 years to construct,
including 2 years for preconstruction design. Inclusion of a centrally located bypass section
would raise construction costs to about $3.3 billion.
The authority for this study was established by P.L. 88-609 on 22 September 1964, with
a basic charge to create a Commission to investigate, study and determine a site for the
construction of a sea-level canal connecting the Atlantic and Pacific Oceans. The date of the
Commission’s report to the President, as amended by P.L. 90-359 on 22 June 1968, is 1
December 1970.
The environmental setting without the project: The alinement of Route 10 lies in the
narrowest part of the American Isthmus adjacent to the existing Panama lock canal. It is
also the area of lowest topography. The isthmus at this point runs nearly east and west and
at its narrowest point is about 40 miles in width (between Limon Bay on the Atlantic and
the Gulf of Panama on the Pacific ). The trace for the route begins at the village of Lagarto,
about 15 miles west of Colon on the Atlantic coast, and extends southeasterly over a range
of low hills lying parallel to the coast. This minor divide was geologically pierced by the
Chagres River at Gatun, but the original gap has been closed by the Gatun Locks and Dam.
V-C-6
The drainage area of Gatun Lake lies between this range and the Continental Divide that
parallels the Pacific coast.
Route 10 crosses arms of Gatun Lake near the towns of Escobal and La Laguna before
passing through the divide at Chorrera Gap. It continues south through generally open,
rolling terrain crossing the Pan American Highway about 3 miles northeast of La Chorrera.
The Pacific terminus of the route is at the town of Puerto Caimito at the mouth of the
Caimito River.
The area is relatively undeveloped. The coastal towns are accessible by highways but
interior roads are poor to unusable in the rainy season. Gatun Lake in conjunction with the
present lock canal provides limited water access to a portion of the route. The area between
the Pacific Ocean and Gatun Lake is generally rolling country while the area between Gatun
Lake and the Atlantic is quite rugged. The area is sparsely populated and devoted to
small-scale farming and livestock production.
The Panama climate is a typical low-latitude tropical climate. Temperatures are
moderately high, averaging about 80 degrees, and rarely exceeding the extremes of 65 and
95 degrees. Relative humidity varies with rainfall. Annual average humidity is about 80
percent and has an average variation from 75 percent in the dry season to 90 percent during
the wet season. The Atlantic coast generally experiences higher winds and almost twice the
precipitation of the Pacific coast. Annual migration northward in the spring and southward
in the fall of the northeast tradewinds and doldrums divides the year into well-defined wet
and dry seasons. The dry season is normally from mid-December to mid-April and the wet
season the other eight months. October and November have the highest precipitation with
rain occurring nearly every day. Seasonal changes may vary as much as one month either
way. High-intensity thunderstorms have occurred in every month except February.
The region of Route 10 is characterized by four main physiographic provinces. The
Pacific littoral swamp province extends inland at the lower elevations of the major streams
where subsidence of the stream valleys has caused deposition of stream loads forming thick
deposits of muck. Igneous complex areas extend from the southern shores of Gatun Lake
southward to the swamps of the Pacific shore. The topography is typically steep and rugged
at elevations of over 400 feet above sea level. Maximum relief of about 1,200 feet is
developed in this rough and irregular terrain. Igneous complex areas are characterized by
steep gullies with irregular patterns. The upper portions of hills consist of hard basalts and
agglomerates. A stratified rock province extends from the Atlantic littoral swamps and
lowlands along the Atlantic coast to the southern shore of Gatun Lake. The province is
composed of stratified sediments forming a young coastal plain which gently dips toward
the Atlantic Ocean. The Atlantic littoral swamps and lowland comprise portions of Cafio
Quebrado, the Chagres, Trinidad, and Gatun River Valleys with associated inland and coastal
swamp areas. Thick deposits of silt and organic material are intermingled with Pleistocene
marine sediments in these valleys.
The Atlantic and Pacific marine species in the vicinity of the route are closely related,
even though few are identical. This condition reflects the fact that these oceans were united
until recent geological time, probably three to four million years ago. In general, the
Atlantic ecosystems provide more habitat diversity than the Pacific. The differing
adaptations and competitive abilities of the biota reflect the differences in environment on
either side of the Isthmus.
V-C-7
The Atlantic coastal environment would generally be characterized as mild and constant
compared to relatively rigorous and variable features of the Pacific coast. The Pacific
undersea slopes are very gently sloping with the 10-fathom isobath varying between 5-7
miles offshore. The Atlantic shelf is much steeper with very little area less than 5 fathoms
deep.
The Pacific tide is semidiurnal with a maximum range of about 21.1 feet and a mean
range of about 12.7 feet. The Atlantic tide is very irregular with a maximum range of about
2 feet and mean range of about | foot.
The Atlantic waters exhibit a narrow temperature range for depth and season compared
to the slightly cooler Pacific. While the salinities of the Pacific end of Route 10 may
approach those of the Caribbean during the dry season, wet season salinities are 4 to 6
percent lower.
Turbidity of Pacific waters tends to be higher than that of the Atlantic. Its nutrient
content, benthic biomass and primary productivity are also higher. Food chains are longer in
Atlantic ecosystems.
The environmental impact of the proposed action: The proposed plan would produce
several prime environmental conversions. Canal construction would convert a 5-mile
segment of the Chorrera upland ecosystems, a 5-mile strip of the Colon Province upland
ecosystems and segments across about 40 miles of semi-agricuitural upland ecosystems to
more complex systems containing terrestrial, canal and contact zone components. Similarly,
diversion channels for Cano Quebrado and the Trinidad/Ciri Rivers would modify two 5- to
10-mile segments of semi-agricultural ecosystems.
Much of the hydraulic and dry spoil would be placed in adjacent forested areas with a
resulting regression in successional status. The rate of biotic development would be largely
determined by the fertility and diversity of the spoil. Igneous material from deep
excavations would resist weathering and would be expected to require many years before
reestablishment of mature plant communities. Due to differences in geologic origin of spoil
as well as differences in regional and internal drainage, parent material weathering history
and successional status, the returning plant and animal communities would not be fully
identical to the original ones.
Barrier dams across segments of Gatun Lake would be required to permit control of
water levels within work areas. These structures, measuring 2000 feet wide at their crests,
would require prior excavations of about 50 feet of muck to provide a firm base. The lake
would be reduced by the area of the structures and subdivided into four separate bodies of
water.
Associated with the environmental conversions and the attendant construction activities
would be additional environmental impacts.
Hard rock haul roads, access roads and railroad rights-of-way would modify
considerable areas of terrain through surfacing and clearing.
Canal construction would create an additional barrier to overland movement and
migration of man and wildlife. The salinity of the canal waters coupled with steep banks in
areas of hard rock excavation would be expected to create an effective obstacle.
The estuarine ecosystems at the ends of the canal would be considerably altered by the
changes in salinity, temperature, turbidity and currents. This modification would act to
increase the present diversity of aquatic organisms.
V-C-8
Breakwaters at the Atlantic canal entrance and a jetty at the Pacific entrance would be
expected to modify shore currents and littoral drift.
The creation of an unobstructed sea-level canal would greatly amplify the movement
between oceans of marine and estuarine life beyond that now passing through the Panama
Canal. Such transfer would occur by organisms actively swimming or drifting through the
channel, as well as being attached to ship hulls or carried in ballast tanks. There is a
reasonable probability that movement of some organisms will constitute new introduction
of biota. The likelihood of successful establishment of alien biota in either the ecosystems
of the Caribbean Sea or the Pacific Ocean is a subject of debate and is not predictable at the
present state of knowledge.
Any adverse environmental effects which cannot be avoided should the proposal be
implemented: Project construction would commit considerable areas of land and water to
the environmental conversions previously discussed. Existing flora and habitats would be
eliminated through these changes while fauna would be either displaced or eliminated
depending on its specific nature.
Hydraulic and dry spoil placed in forested areas would result in destruction of
vegetation, burial of detritus layers of the soil and increased sediment load on the region’s
waterways. This would have the effect of regressing successional stages to less diverse, less
productive, and thus less stable ecosystems. Unvegetated spoil areas might be considered by
some to present a stark contrast (aesthetically) to the lush tropical vegetation of the region.
The migration of biota from one side of the Isthmus to the other would be possible
through a sea-level canal; however, the probability of transfer and subsequent effects are not
reasonably predictable at present. The prime concern would be for the successful
establishment of an undesirable organism with the interrelated possibilities for elimination
of critical native biota. Such elimination is visualized through exotic parasite introduction,
sterile progeny produced from interbreeding, new predator introduction and merely by the
injection of related but more competitive organisms. Since neither the probability of transfer
and establishment nor the eventual consequences of “mixing†is assessable for any given
class of organisms, it is impossible to categorically state that undesirable introductions can
be avoided. There is, however, a justifiable confidence that if pre-construction/pre-operation
research indicates a need for a biotic barrier, such a barrier can be implemented utilizing
bio-regulators like salinity or temperature.
Alternatives of the proposed action: The alternatives of location and method of
construction have been narrowed down to Routes 14 (Panama Sea-Level Conversion) and 25
(Atrato-Truando, Colombia). Route 14 is comparable to Route 10 in terms of environ-
mental impacts but has the disadvantages of interfering with the present canal during
construction and eliminating it as a useful facility. Route 25 is about twice the length, and
requires a much greater volume of excavation than Route 10. Nuclear excavation on this
route introduces the concerns of radionuclide transfer and accumulation; genetic alteration
of organisms; airblast, ground shock and ejecta damage; and the need for human evacuation
and exclusion during excavation and for many months thereafter.
Another alternative to the proposed action is to recommend against a sea-level canal.
This would forego the national defense and shipping benefits of the waterway and permit
V-C-9
both these factors to become major concerns for the present canal in the near future.
Overland highways and pipelines would likely be constructed if expanded facilities are not
developed. This might have the effect of transferring major environmental concerns from
the marine environment to the terrestrial environment. The alternative of modifying the
present canal has the obvious disadvantage of impeding traffic during the construction
period.
The relationship between local short-term uses of man’s environment and the
maintenance and enhancement of long-term productivity: Considering the interdependence
of the components and organisms of an ecosystem, the elimination of a critical species
could potentially have far-reaching consequences—to include affecting the long-term
productivity of a region. While it is unlikely that elimination of any species would occur
over the full extent of its range, the prospect of even restricted elimination is undesirable. It
is anticipated that pre-construction research would provide further evaluation of the need
for biotic barriers. Investigations to date have not established the need for such barriers.
Areas of infertile spoil would be slow to revegetate and provide balanced land use. While
the productivity of these sites would be low, the overall productivity of the region would
not be significantly affected.
Any irreversible and irretrievable commitments of resources which would be involved in
the proposed action should it be implemented: The loss of the flora, fauna and habitats of
the construction areas and spoil disposal sites would be inherent in the project.
The concern over the introduction and amplification of undesirable organisms through
a sea-level canal is an expression of a never-ending chain of unquantifiable risks. In this case,
regardless of the size of the research effort carried out in the immediate future on the
ecology of marine organisms, there will remain imposing areas of scientific ignorance. Thus a
certain risk of an irretrievable commitment of marine resources would remain with such a
project. Continuing research, coupled if necessary with appropriate actions such as the
construction of barriers, would be expected to minimize these risks to a level acceptable to
those most affected by the consequences.
ROUTE 14 ENVIRONMENTAL IMPLICATIONS STATEMENT
Environmental Statement Pursuant to National Environmental Policy Act of 1969 (P.L.
91-190), Section 102(2)(C) for an interoceanic sea-level canal generally along the route of
the Panama Canal.
Project description: Route 14 is the designation given to a proposed sea-level canal to
be constructed by conventional techniques along a 53-mile route through the Canal Zone
region of central Panama. This project is designed to improve upon the capability of present
Isthmian transit by increasing capacity, updating operations and maintenance characteristics
and reducing vulnerability to military attack or sabotage. The need for such a canal is
indicated by the limitations of the present facility. In 1970 there were approximately 1,300
ships afloat, under construction or on order which could not pass through the existing locks
V-C-10
under any conditions. Approximately 1,700 others could not pass through fully laden. An
even more serious limitation is that part of the route is above sea level, and a considerable
volume of water is required for the operation of the locks needed to raise and lower the
ships during passage. The steady increase in transits, now over 15,000 per year, points out
the need for providing more lockage water. Recycling lockage water or pumping seawater
must begin within the next several years, undoubtedly before a sea-level canal would be
built. As the demand increases, the average transit time will also increase, causing expensive
delays. Projections of the postwar demand rate indicate that the number of ships desiring to
use the canal would exceed 25,000 per year before the year 2000. A sea-level canal would
avoid these limitations and be less expensive to operate and maintain. Blockages by scuttled
ships or bomb-induced slides are likely to do no more than slow down passage of combat
vessels and medium size merchant ships, and could be removed relatively rapidly.
The alinement of Route 14 is entirely within the Canal Zone and roughly parallels the
present lock canal. Construction of a sea-level canal along this route would preclude
continued operation of the existing facility.
Route 14 construction would require two principal excavation efforts: dredging across
Gatun Lake and cutting through the divide. Across Gatun Lake, deep dredging techniques
would be employed, using hydraulic dredges for soft muck, dipper dredges for rock at
shallow depths and barge-mounted draglines for rock below elevation +15 feet. Construction
plugs would keep the lake at its present level (+85 feet) to sustain operations in the Panama
Canal while this work is being accomplished. Scows would move excavated material to
underwater spoil areas in the lake. Much of this material would be used as fill in the
permanent flood control dams on either side of the alinement. Where practicable, shovels
and large dump trucks would be employed to excavate the higher elevations. As the final
step of the construction phase, Gatun Lake would be drawn down and the sea-level canal
placed in operation. Pools behind the lateral flood control dams would be maintained at an
elevation of 55 feet.
Along the Route 14 alinement, about 80 percent of the material could be removed by
open-pit mining/rail haul methods; the remainder would be excavated by dipper dredges and
hauled in scows to Gatun Lake and the Pacific Ocean.
Flood control and stream diversion involve no serious problems. The two major
reservoirs remaining in the Gatun Lake basin would be discharged into the Caribbean, one
through the spillway at Gatun, the other through a new outlet east of Cristobal. The Chagres
River would be diverted to the Pacific through the existing canal. Smaller streams in either
case would be channeled into the canal through inlet structures.
Costs of facilities to support construction and operation of Route 14 are affected by
the existing state of development within the Canal Zone. The necessary harbors,
communications, and utilities already exist and can be used as they are. Other facilities such
as channels and anchorages might have to be modified. In general, however, mobilization for
construction on this route would be relatively easy.
The project cost would be approximately $3.04 billion and would require nearly 16
years to complete. Transiting capacity could be increased by extending the two-lane
Atlantic approach 9 miles across Gatun Lake at an additional cost of about $430 million.
The authority for this study was established by P.L. 88-609 on 22 September 1964, with
a basic charge to create a Commission to investigate, study and determine a site for the
V-C-11
construction of a sea-level canal connecting the Atlantic and Pacific Oceans. The date of the
Commission’s report to the President, as amended by PL. 90-359 on 22 June 1968, is 1
December 1970.
The environmental setting without the project: The alinement of Route 14 lies in the
narrowest part of the American Isthmus adjacent to the existing Panama lock canal and
entirely within the Canal Zone. It is also the area of lowest topography. The isthmus at this
point runs nearly east and west and at its narrowest point is about 40 miles in width
(between Limon Bay on the Atlantic and the Gulf of Panama on the Pacific). Route 14 lies
west of the existing canal on the Pacific side and east of it on the Atlantic, crossing the
existing channel near Gamboa at the southerly end of Gatun Lake. The existing canal,
railroad and highway provide good access. Towns at either end, Panama City and Balboa on
the Pacific and Colon and Cristobal on the Atlantic, are available to support
the construction and operation and maintenance efforts. One major concern in the
construction and, to a lesser degree, operation and maintenance would be the effect of
construction on the stability of the canal slopes through the divide area. This area has a long
record of slope failure. Slides during the early life of the Panama Canal closed the canal for
extended periods. While recent interference with canal operation has not occurred,
continuing efforts to maintain stability are a necessity, even today.
The Canal Zone has a typical low-latitude tropical climate. Temperatures are
moderately high, averaging about 80 degrees, and rarely exceeding the extremes of 65 and
95 degrees. Relative humidity varies with rainfall. Annual average humidity is about 80
percent and has an average variation from 75 percent in the dry season to 90 percent during
the wet season. The Atlantic coast generally experiences higher winds and almost twice the
precipitation of the Pacific coast. Annual migration northward in the spring and southward
in the fall of the northeast tradewinds and doldrums divides the year into well-defined wet
and dry seasons. The dry season is normally from mid-December to mid-April and the wet
season the other eight months. October and November have the highest precipitation with
rain occurring nearly every day. Seasonal changes may vary as much as one month either
way. High-intensity thunderstorms have occurred in every month except February.
The region of Route 14 is characterized by four main physiographic provinces. The
Pacific littoral swamp province extends inland at the lower elevations of the major streams
where subsidence of the stream valleys has caused deposition of stream loads forming thick
deposits of muck. Igneous complex areas extend from the southern shores of Gatun Lake
southward to the swamps of the Pacific shore. The topography is typically steep and rugged
at elevations of over 400 feet above sea level. Maximum relief of about 1,200 feet is
developed in this rough and irregular terrain. Igneous complex areas are characterized by
steep gullies with irregular patterns. The upper portions of hills consist of hard basalts and
agglomerates. A stratified rock province extends from the Atlantic littoral swamps and
lowlands along the Atlantic coast to the southern shore of Gatun Lake. The province is
composed of stratified sediments forming a young coastal plain which gently dips toward
the Atlantic Ocean. The Atlantic littoral swamps and lowlands comprise portions of Cano
Quebrado and the Chagres, Trinidad, and Gatun River Valleys with associated inland and
coastal swamp areas. Thick deposits of silt and organic material are intermingled with
Pleistocene marine sediments in these valleys.
V-C-12
The Atlantic and Pacific marine species in the vicinity of the route are closely related,
even though few are identical. This condition reflects the fact that these oceans were united
until recent geological time, probably three to four million years ago. In general, the
Atlantic ecosystems provide more habitat diversity than the Pacific. The differing
adaptations and competitive abilities of the biota reflect the differences in environment on
either side of the isthmus.
The Atlantic coastal environment would generally be characterized as mild and constant
compared to relatively rigorous and variable features of the Pacific coast. The Pacific
undersea slopes are very gently sloping with the 10-fathom isobath varying between 5 to 7
miles offshore. The Atlantic shelf is much steeper with very little area less than 5 fathoms
deep.
The Pacific tide is semidiurnal with a maximum range of about 21.1 feet and a mean
range of about 12.7 feet. The Atlantic tide is very irregular with a maximum range of about
2 feet and mean range of about | foot.
The Atlantic waters exhibit a narrow temperature range for depth and season compared
to the slightly cooler Pacific. While the salinities of the Pacific end of Route 14 may
approach those of the Caribbean during the dry season, wet season salinities are 4 to 6
percent lower.
Turbidity of Pacific waters tends to be higher than that of the Atlantic. Its nutrient
content, benthic biomass and primary productivity are also higher. Food chains are longer in
the Atlantic ecosystems.
The environmental impact of the proposed action: The proposed plan would produce
several prime environmental conversions. Canal construction would convert a 40-mile
segment of upland ecosystems, about half of which is semi-agricultural, to more complex
systems containing terrestrial, canal and contact zone components.
Much of the hydraulic and dry spoil would be placed in adjacent forested areas with a
resulting regression in successional status. The rate of biotic development would be largely
determined by the fertility and diversity of the spoil. Igneous material from deep
excavations would resist weathering and would be expected to require many years before
reestablishment of mature plant communities. Due to differences in geologic origin of spoil
as well as differences in regional and internal drainage, parent material weathering history
and successional status, the returning plant and animal communities would not be fully
identical to the original ones.
Flood control dams across Gatun Lake on both sides of the sea-level canal would be
constructed to isolate the canal from the lake. These dams would subdivide the lake into
four separate bodies of water. Lake water level would be drawn down from elevation 85 feet
to elevation 55 feet, thus converting over 100 square miles from a lacustrine ecosystem to
wetland and upland tropical ecosystems.
Associated with the environmental conversions and the attendant construction activities
would be additional environmental impacts.
Hard rock haul roads, access roads and railway rights-of-way would modify considerable
areas of terrain through surfacing and clearing.
Canal construction would create an additional barrier to overland movement and
migration of man and wildlife.
M-C-1/3
The estuarine ecosystems at the ends of the canal would be considerably altered by
changes in salinity, temperature, turbidity and currents. This modification would act to
increase the present diversity of aquatic organisms.
The lowering of Gatun Lake would reduce the quantity and probably the diversity of
the lacustrine biota.
Construction of dams on the Trinidad/Ciri Rivers and Gatun River would slow
free-flowing streams and inundate segments of the valleys.
The creation of an unobstructed sea-level canal would greatly amplify the movement
between oceans of marine and estuarine life beyond that now passing through the Panama
Canal. Such transfer would occur by organisms actively swimming or drifting through the
channel, as well as being attached to ship hulls or carried in ballast tanks. There is a
reasonable probability that movement of some organisms would constitute new introduc-
tion of biota. The likelihood of successful establishment of alien biota in either the
ecosystems of the Caribbean Sea or the Pacific Ocean is a subject of debate and is not
predictable at the present state of knowledge.
Any adverse environmental effects which cannot be avoided should the proposal be
implemented: Project construction would commit considerable areas of land and water to
the environmental conversions previously discussed. Existing flora and habitats would be
eliminated through these changes while fauna would be either displaced or eliminated
depending on its specific nature.
Hydraulic and dry spoil placed in forested areas would result in destruction of vegetation,
burial of detritus layers of the soil and increased sediment load on the region’s waterways.
This would have the effect of regressing successional stages to less diverse, less productive,
and thus less stable ecosystems. Unvegetated spoil areas might be considered by some to
present a stark contrast aesthetically to the lush tropical vegetation of the region.
The migration of biota from one side of the Isthmus to the other would be possible
through a sea-level canal; however, the probability of transfer and subsequent effects are not
reasonably predictable at present. The prime concern would be for the successful
establishment of an undesirable organism with the interrelated possibilities for elimination
of critical native biota. Such elimination is visualized through exotic parasite introduction,
sterile progeny produced from interbreeding, new predator introduction and merely by the
injection of related but more competitive organisms. Since neither the probability of
transfer and establishment nor the eventual consequences of “‘mixingâ€â€™ is assessable for any
given class of organisms, it is impossible to categorically state that undesirable introductions
can be avoided. There is however, a justifiable confidence that if pre-construction/pre-
operation research indicates a need for a biotic barrier, such a barrier can be implemented
utilizing bio-regulators like salinity or temperature.
Alternatives to the proposed action: The alternatives of location and method of
construction have been narrowed down to Routes 10 (Chorrera-Lagarto, Panama) and 25
(Atrato-Truando, Colombia). Route 10 is comparable to Route 14 in terms of environmental
impacts and has the advantage of not interfering with the operation of the present canal.
Route 25 is about twice the length, and requires a much greater volume of excavation than
Route 10. Nuclear excavation on this route introduces the concerns of radionuclide transfer
V-C-14
and accumulation; genetic alteration of organisms; airblast, ground shock and ejecta damage;
and the need for human evacuation and exclusion during excavation and for many months
thereafter.
Another alternative to the proposed action is to recommend against a sea-level canal.
This would forego the national defense and shipping benefits of the waterway and permit
both these factors to become major concerns for the present canal in the near future.
Overland highways and pipelines would likely be constructed if expanded facilities are not
developed. This might have the effect of transferring major environmental concerns from
the marine environment to the terrestrial environment. The alternative of modifying the
present canal has the obvious disadvantage of impeding traffic during the construction
period.
The relationships between local short-term uses of man’s environment and the
maintenance and enhancement of long-term productivity: Considering the interdependence
of the components and organisms of an ecosystem, the elimination of a critical species
could potentially have far-reaching consequences — to include affecting the long-term
productivity of a region. While it is unlikely that elimination of any species would occur
over the full extent of its range, the prospect of even restricted elimination is undesirable. It
is anticipated that pre-construction research would provide further evaluation of the need
for biotic barriers. Investigations to date have not established the need for such barriers.
Areas of infertile spoil would be slow to revegetate and provide balanced land use.
While the productivity of these sites would be low, the overall productivity of the region
would not be significantly affected.
Any irreversible and irretrievable commitments of resources which would be involved in
the proposed action should it be implemented: The loss of the flora, fauna and habitats of
the construction areas and spoil disposal sites would be inherent in the project.
The concern over the introduction and amplification of undesirable organisms through
a sea-level canal is an expression of a never-ending chain of unquantifiable risks. In this case,
regardless of the size of the research effort carried out in the immediate future on the
ecology of marine organisms, there will remain imposing areas of scientific ignorance. Thus
certain risk of an irretrievable commitment of marine resources would remain with such a
project. Continuing research, coupled if necessary with appropriate actions such as the
construction of barriers, would be expected to minimize these risks to a level acceptable to
those most affected by the consequences.
ROUTE 25 ENVIRONMENTAL IMPLICATIONS STATEMENT
Environmental Statement Pursuant to National Environmental Policy Act of 1969 (P.L.
91-190), Section 102(2)(C) for an interoceanic sea-level canal across northwestern
Colombia.
Project description: Route 25 is the designation given to a proposed sea-level canal to
be constructed by a combination of conventional and nuclear techniques along a 103-mile
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route through the Choco Region of northwestern Colombia. This project is designed to
improve upon the capability of present Isthmian transit by increasing capacity, updating
operations and maintenance characteristics and reducing vulnerability to military attack or
sabotage. The need for such a canal is indicated by the limitations of the present facility. In
1970 there were approximately 1,300 ships afloat, under construction or on order which
could not pass through the existing locks under any conditions. Approximately 1,700 others
could not pass through fully laden. An even more serious limitation is that part of the route
is above sea level, and a considerable volume of water is required for the operation of the
locks needed to raise and lower the ships during passage. The steady increase in transits, now
over 15,000 per year, points out the need for providing more lockage water. Recycling
lockage water or pumping seawater must begin within the next several years, undoubtedly
before a sea-level canal would be built. As the demand increases, the average transit time will
also increase, causing expensive delays. Projections of the postwar demand rate indicate that
the number of ships desiring to use the canal would exceed 25,000 per year before the year
2000. A sea-level canal would avoid these limitations and be less expensive to operate and
maintain. Blockages by scuttled ships or bomb-induced slides are likely to do no more than
slow down passage of combat vessels and medium size merchant ships, and could be
removed relatively rapidly.
Route 25 starts in Humboldt Bay on the Pacific coast of Colombia, approximately 200
miles southeast of Panama City. After crossing a narrow coastal strip, the alinement runs
eastward for about 10 miles through the Choco Highlands which form the Continental
Divide. Turning to the northeast, the trace crosses the upper Truando Valley and the
Saltos Highlands and then parallels the Truando River to its confluence with the Atrato
River. From there it passes through the Atrato Lowlands for about 50 miles, entering the
Caribbean Sea at Candelaria Bay in the Gulf of Uraba at a point 2 miles from deep water.
The plan for building Route 25 assumes the feasibility of nuclear excavation in a
20-mile reach from the Pacific coast through the Continental Divide, the upper Truando
Valley, and the Saltos Highlands. The design channel through this region would be over
1,000 feet wide and from 225 to 360 feet deep.
Nuclear excavation would require about 150 individual explosives detonated in 21
separate explosions. Detonations would be scheduled in two passes, the first requiring about
8 months and the second 6 months, with an interval of about 18 months to prepare for the
second pass. The largest single detonation would be 13 megatons: the total yield of all
explosives in the two passes would be about 120 megatons.
The exclusion area is about 3,100 square miles and has about 10,000 inhabitants.
Radiological surveys would be conducted continuously to determine when the area might be
reoccupied. Some portions of the area could be re-entered shortly after the last detonation:
however, it would probably be more practical to reoccupy the entire exclusion area
simultaneously 6 to 12 months after the last detonation. Conventional excavation of a
78-mile reach would begin at an elevation of about 300 feet in the Truando Valley, with
shovel excavation and truck haul used at elevations above 75 feet. Over 90 percent of the
conventional excavation would be at elevations lower than 75 feet and would be
accomplished by hydraulic dredging. The design channel would be 550 feet wide and 75 feet
deep at the edges, with a parabolic bottom having a centerline depth of 85 feet. The
approach channels would be dredged to 85- by 1400-foot dimensions.
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Flood diversion measures would be extensive, since most of the Atrato River would
have to be discharged into Colombia Bay through a 1,000- by 50- foot diversion channel
east of the canal alinement. Bank revetment would be used to prevent meandering of the
realined river and breaching of the separation between the diversion channel and the canal.
A smaller but similar floodway west of the alinement would divert runoff from about 2,000
square miles of drainage area into Candelaria Bay. An inlet structure and several diversion
channels, excavated with nuclear explosives, would be required to provide flood control and
river diversion along the nuclear reach of the canal.
Hydraulic dredges would begin work on the canal within the Atrato Floodplain early in
the construction period. During periods of nuclear operations, they would work at the north
end of the alinement.
Because of the general lack of development in this region, all facilities required for
constructing and operating the canal would have to be provided. These would include a
transisthmian highway; harbor facilities; an all-weather airfield; administrative, maintenance,
and residential facilities; and bridge or ferry crossings.
Construction of a sea-level canal on this alinement, with a 28-mile bypass channel,
would cost approximately $2.1 billion and take about 13 years.
The authority for this study was established by P.L. 88-609 on 22 September 1964,
with a basic charge to create a Commission to investigate, study and determine a site for the
construction of a sea-level canal connecting the Atlantic and Pacific Oceans. The date of the
Commission’s report to the President, as amended by P.L. 90-359 on 22 June 1968, is 1
December 1970.
The environmental setting without the project: The American Isthmus in the
Atrato-Truando region of the Choco Province in northwestern Colombia is characterized by
extremes of high, rugged terrain within sight of low-lying swampland. The distance between
the Atlantic and Pacific is approximately 100 miles. The dominating terrain feature is the
Atrato River which flows through the northern half of the region from its confluence with
the Truando River to the Gulf of Uraba on the Atlantic. The canal alinement would traverse
approximately 20 miles of mountainous terrain through which there are passes at elevations
between 900 and 1,000 feet. The Curiche River has its headwaters in the Continental Divide
highlands and flows westward for about 20 miles before emptying into Humboldt Bay on
the Pacific.
The Atrato Valley is a low, broad swamp of post-miocene, unconsolidated alluvial
sediments. The Choco Highlands, which form the Continental Divide in this region, are high,
narrow ridges of uplifted volcanic rocks.
The area, except for the Atrato River Floodplain, is covered with a dense tropical
forest. Trees at higher elevations are short, closely spaced evergreens with a continuous
interlaced canopy. Epiphytes and lianas are abundant throughout the tree crowns. Forests
of less-dense deciduous trees may be found at upper floodplain elevations. The Atrato
floodplain is covered with tall grasses, cane-like palms and shrubs that form almost
impenetrable thickets, Rivers are the primary means of natural access into the area.
The Atlantic and Pacific marine species in the vicinity of the route are closely related,
even though few are identical. This condition reflects the fact that these oceans were united
V-C-17
until recent geological time, probably three to four million years ago. In general, the Pacific
estuarine ecosystem provides more habitat diversity than the Atlantic. The differing
adaptations and competitive abilities of the biota reflect the differences in environment on
either side of the Isthmus.
The Atlantic coastal environment would generally be characterized as mild and constant
compared to relatively rigorous and variable features of the Pacific coast. The ten-fathom
contour is two miles offshore on the Atlantic side while deep water is reached in one-half
mile at the Pacific coastal terminus. Average rainfall varies from 80 inches at the Gulf of
Uraba to 200 inches along the mountainous Pacific coast. The Atlantic tides are irregular,
with a mean range of 1.1 feet and a maximum of 2.9 feet. The Pacific tides are regular,
having a mean range of 8.4 feet and an estimated maximum range of 14.0 feet.
The Atlantic waters exhibit a narrow temperature range for depth and season compared
to the slightly cooler Pacific. The salinity of Atlantic waters is lower and more stable than
the Pacific, reflecting higher fresh water inputs from surface runoff waters. Turbidity of
Caribbean waters tends to be higher than Pacific while its nutrient content, benthic biomass
and primary productivity are generally lower. Food chains are longer in the Atlantic
ecosystems.
The environmental impact of the proposed action: The proposed plan would produce
several prime environmental conversions. Canal construction would convert a 20-mile
stretch of upland ecosystems in the Choco-Saltos Highlands and an 80-mile reach of wetland
ecosystems of the Atrato Floodplain to more complex systems containing terrestrial, canal
and contact zone components.
Hydraulic spoil (alluvium, overburden, claystone) would be disposed of behind
spoil-retaining dikes creating extensive areas of upland ecosystems within the floodplain.
Successful invasion by upland vegetation would be relatively rapid.
Nuclear excavation would deposit spoil (primarily igneous materials with small amount
of sedimentary rock) in depths up to several hundred feet over an area extending up to 2
miles from the canal. It is predicted that the postexcavation topography will be
characterized by a high continuous ridge bounding the canal on either side and standing as
much as 500 ft above the present topography. These ridges would have steep slopes into the
canal and relatively gentle slopes away from the canal, phasing out and interfingering with
the zone of discontinuous ejecta. These ridges would intercept several large streams and
numerous lesser drainages. It may be anticipated that numerous artificial lakes would form,
varying in size from small to rather large. The calculations indicate that a large part of the
Nercua Valley might be inundated. If so, that area (about 16 sq mi) would be lost to
potential agricultural development or forest production. The headwaters of several small
streams would be buried or diverted by this material.
The effect of the ejecta would be to regress the area’s successional status. The rate of
biotic development would be largely determined by the fertility and diversity of the spoil.
Igneous material from deep excavations would resist weathering and would be expected to
require many years before reestablishment of mature plant communities. Due to differences
in geologic origin of spoil as well as differences in regional and internal drainage, parent
material weathering history and successional status, the returning plant and animal
communities would not be fully identical to the original ones.
V-C-18
Associated with the environmental conversions and the attendant construction activities
would be additional environmental impacts.
Hard rock haul roads, access roads and railroad rights-of-way would modify
considerable areas of terrain through surfacing and clearing.
Canal construction would create an additional barrier to overland movement and
migration of man and wildlife. The salinity of the canal waters coupled with steep banks in
areas of hard rock excavation would be expected to create an effective obstacle.
The estuarine ecosystems at the ends of the canal would be considerably altered by
changes in salinity, temperature, turbidity and currents.
Nuclear excavation on this route introduces the concern of effects of radioactivity,
airblast, ground shock and ejecta on the environment; requiring the evacuation of the
human population from the area and its exclusion during excavation and for a number of
months thereafter.
The Truando, Nercua and Salado Rivers would be diverted to flow directly into the
canal. The Truando consequently would become much smaller downstream.
Extensive diversion channels would be excavated on both sides of the canal to
accommodate the flows of the Salaqui, Cacarica and Atrato Rivers. Spoil disposal in this
area would be behind levees and would raise extensive marsh areas several feet above sea
level. The high organic content of this material would aid its rapid revegetation to brush and
small trees. The extent of forest development on these areas might be limited by the
root-firmness of the fill. The economic value of this land would be enhanced.
The extensive stream diversions, flood control and filled land would alter the entire
hydrology and physical characteristics of much of the Atrato Floodplain. The effect on the
nearby estuaries would be detrimental. Changes in the frequency, depth and duration of
flooding would alter (probably reduce) the nutrient and biotic contribution of the
marshlands to the coastal regions. Flora and fauna dependent on these supplies would
suffer.
The creation of an unobstructed sea-level canal would greatly amplify the movement
between oceans of marine and estuarine life beyond that now passing through the Panama
Canal. Such transfer would occur by organisms actively swimming or drifting through the
channel, as well as being attached to ship hulls or carried in ballast tanks. There is a
reasonable probability that movement of some organisms would constitute new introduc-
tion of biota. The likelihood of successful establishment of alien biota in either the
ecosystems of the Caribbean Sea or the Pacific Ocean is a subject of debate and is not
predictable at the present state of knowledge. Present knowledge does, however, permit the
mathematical modeling and estimation of many of the physical processes governing canal
transit by an organism.
Any adverse environmental effects which cannot be avoided should the proposal be
implemented: Project construction would commit considerable areas of land and water to
the environmental conversions previously discussed. Existing flora and habitats would be
eliminated through these changes while fauna would be either displaced or eliminated
depending on its specific nature.
Hydraulic and dry spoil placed in forested areas would result in destruction of
vegetation, burial of detritus layers of the soil and increased sediment load on the region’s
V-C-19
waterways. This would have the effect of regressing successional stages to less diverse, less
productive, and thus less stable ecosystems. Unvegetated spoil areas might be considered by
some to present a stark contrast (aesthetically) to the lush tropical vegetation of the region.
The migration of biota from one side of the Isthmus to the other is possible through a
sea-level canal; however, the probability of transfer and subsequent effects are not
reasonably predictable at present. The prime concern would be for the successful
establishment of an undesirable organism with the interrelated possibilities for elimination
of critical native biota. Such elimination is visualized through exotic parasite introduction,
sterile progeny produced from interbreeding, new predator introduction and the injection of
related but more competitive organisms. Since neither the probability of transfer and
establishment nor the eventual consequences of “mixing†is assessable for any given class of
organisms, it is impossible to categorically state that undesirable introductions can be
avoided. There is, however, a justifiable confidence that if pre-construction/pre-operation
research indicates a need for a biotic barrier, such a barrier can be implemented utilizing
bio-regulators like salinity or temperature.
Nuclear excavation would require evacuation of all people from an area of about 3,100
square miles with subsequent exclusion until residual radioactivity would be reduced to
below acceptable levels. Because of low population density, there would be little damage to
buildings or structures from airblast, ground shock or ejecta. Explosions of the planned
magnitude have a potential for triggering local earthquakes and earth slides. Such effects are
not considered likely. The flora and fauna within the exclusion area, however, would suffer
varying damage from effects of ejecta, airblast, ground motion and radioactivity.
Radionuclides which may be accumulated in the biota could potentially reach man through
native food chains (both terrestrial and aquatic). Tritium, occurring mainly as tritiated
water, would likely contaminate local surface and ground water supplies.
Alteration of the Atrato Floodplain by filling and diking would considerably change the
inland areas of the entire Colombia bay estuary. Effects such as altered and reduced nutrient
input to the estuaries could be detrimental to resident biota.
Alternatives to the proposed action: The alternatives of location and method of
construction have been narrowed down to Route 10(Chorrera-Lagarto, Panama)and Route
14 ( Panama Sea-Level Conversion). Both routes have similar environmental impacts, but
Route 14 has the disadvantages of interfering with the present canal during construction and
eliminating it as a useful facility. Since these routes are excavated conventionally, the
environmental impacts related to nuclear excavation would not exist with these plans.
Another alternative to the proposed action is to recommend against a sea-level canal.
This would forego the national defense and shipping benefits of the waterway and permit
both these factors to become major concerns for the present canal in the near future.
Overland highways and pipelines would likely be constructed if expanded facilities are not
developed. This might have the effect of transferring major environmental concerns from
the marine environment to the terrestrial environment. The alternative of modifying the
present canal has the obvious disadvantage of impeding traffic during the construction
period.
V-C-20
eae
The relationship between local short-term uses of man’s environment and the
maintenance and enhancement of long-term productivity: Considering the interdependence
of the components and organisms of an ecosystem, the elimination of a critical species could
potentially have far-reaching consequences — to include affecting the long-term productivity
of a region. While it is unlikely that “mixing†of biota would eliminate any species over the
full extent of its range, the prospect of even restricted elimination is undesirable. It is
anticipated that pre-construction research would provide further evaluation of the need for
biotic barriers. Investigations to date have not established the need for such barriers.
The pathways and effects of radionuclides incorporated in an ecosystem are not known
with certainty for detonations of the size programmed for canal excavation. Thus many
unknowns remain to be cleared before long-term productivity may be assured.
Nuclear excavation introduces a concern for the genetic alteration of organisms through
radiation effects. While the possibility of an undesirable mutation exists, it cannot be
assessed at the present state of knowledge.
Areas of infertile spoil would be slow to revegetate and provide balanced land use.
While the productivity of these sites will be low, the overall productivity of the region
would not be significantly affected.
Any irreversible and irretrievable commitments of resources which would be involved in
the proposed action should it be implemented: The loss of the flora, fauna and habitats of
the construction areas and spoil disposal sites would be inherent in the project.
The concern over the introduction and amplification of undesirable organisms through
a sea-level canal is an expression of a never-ending chain of unquantifiable risks. In this case,
regardless of the size of the research effort carried out in the immediate future on the
ecology of marine organisms, there will remain imposing areas of scientific ignorance. Thus
certain risk of an irretrievable commitment of marine resources will remain with such a
project. Continuing research, coupled if necessary with appropriate actions such as the
construction of barriers, would be expected to minimize these risks to a level acceptable to
those most affected by the consequences.
Water supplies, food chain organisms and ecosystem components will be subjected to
contaminating radiation with a potential for genetic alteration. The state of our knowledge
does, however, permit the prediction of allowable dose estimates such that nuclear devices
could present a minimal likelihood of increasing the natural mutation rate of organisms.
V-C-21
V-C-22
SUMMARY OF THE BATTELLE MEMORIAL INSTITUTE REPORT
ON POSSIBLE EFFECTS OF A SEA-LEVEL CANAL ON THE
MARINE ECOLOGY OF THE AMERICAN ISTHMIAN REGION
Construction of a sea-level canal connecting the Atlantic and Pacific Oceans would
provide a new pathway for the intermingling of two marine biotas which have been
separated by the isthmian land bridge for one to three million years. Some interested
observers of sea-level canal feasibility studies have viewed this possibility with alarm, and
many suggestions or predictions of deleterious or catastrophic ecological consequences have
appeared in both the scientific and the popular literature. Other interested parties, noting
that the passage of marine organisms through the present Panama Canal has had no adverse
effects on the Pacific or Atlantic Oceans, have argued that construction of a sea-level canal
would have virtually no detectable effect on the marine ecology of the Isthmian region. Still
others have called attention to the fact that constructionof a sea-level canal would constitute
a magnificent experiment and provide a great variety of unprecedented opportunities for
scientific studies. Our studies have led to the conclusion that present knowledge of the
marine ecology of the Isthmian region is not sufficient to permit anyone to predict, with
certainty, either the short-term or the long-term ecological consequences of a sea-level canal
construction. All we can do at present, on the basis of inadequate evidence, is to offer our
educated opinions on the subject and to suggest further studies which would improve the
scientific basis for making the desired predictions with less uncertainty. In all probability
the basic question, ““What would be the ecological consequences of connecting the Atlantic
and Pacific Oceans by means of a sea-level canal?’’, can be resolved only by empirical means.
Until the scientific basis for considering this question has been improved by means of
pertinent field, laboratory, and theoretical studies, it is likely to remain unresolved and
controversial.
This preliminary study was undertaken to: (1) summarize existing information
concerning the marine ecology and physical oceanography of the Isthmian region, (2)
describe the marine habitats and biotic communities on both sides of the Isthmus, (3)
develop preliminary mathematical models to simulate the physical and biological mixing
processes that could take place through a sea-level canal, (4) predict the possible economic
and ecological consequences of these processes, and (5) recommend further field,
laboratory, and modeling studies needed to improve such predictions.
On the basis of the limited ecological information currently available we are unable to
predict precisely the specific ecological consequences of marine mixing via a sea-level canal.
Preliminary modeling studies indicate that the net flow of water would be from the Pacific
to the Atlantic. This would result in minor environmental changes near the ends of the canal
and near the shore to the east of the Atlantic terminus. Passive migration of planktonic
V-D-1
organisms would occur almost entirely in the same direction. Active migration of nekton
could occur in either direction, but environmental conditions in the canal would favor
migration from the Pacific to the Atlantic. We have found no evidence for predicting
ecological changes that would be economically deleterious to commercial, sport, or
subsistence fisheries. We have found no firm evidence to support the prediction of massive
migrations from one ocean to another followed by widespread competition and extinction
of thousands of species.
Evidence currently available appears to indicate a variety of barriers to migration of
species from one ocean to another and/or the subsequent establishment of successful
breeding colonies in the latter. Environmental conditions in the canal would constitute
barriers to the migration of both plankton and nekton, and the effectiveness of these
barriers could be enhanced by engineering manipulations of freshwater inputs to the canal
and other artificial means. The marine habitats and biotic communities at the opposite ends
of most proposed sea-level canal routes are strikingly different. Where similar habitats do
occur on both sides of the Isthmus, they are already occupied by taxonomically similar or
ecologically analogous species. These differences in environmental conditions on the two
sides of the Isthmus and the prior occupancy of similar niches by related or analogous
species would constitute significant deterrents to the establishment and ecological success of
those species which may manage to get through the canal.
It is highly improbable that blue-water species like the sea snake and the crown-
of-thorns starfish could get through the canal except under the most unusual circumstances.
On the other hand, we can be fairly certain that some Pacific species could pass through the
canal and could become locally established in the Pacific waters of the Atlantic. It is also
improbable that these species would be able to survive in the Atlantic outside the region of
environmental modification due to water flow through the canal. The Pacific species most
likely to become established along the Caribbean shore are those of estuarine and other
shallow-water habitats, the very habitats that have been least thoroughly studied.
To improve the precision and reliability of these and similar ecological predictions
would require additional information and quantitative data which could be provided only
by a comprehensive program of field, laboratory, and theoretical (modeling) studies.
Extensive taxonomic surveys would be required to improve our knowledge of the biota of
the Tropical Western Caribbean and Tropical Eastern Pacific. Except for a few economically
important species, ecological life history data are virtually nonexistent. Basic biological
studies would be required to obtain such information. The geographical extent and
physicochemical characteristics of the marine habitats on the two sides of the isthmus are
imperfectly known from a few cursory surveys. The species composition and functional-
ecological structure of the biotic communities that characterize these habitats are
imperfectly known and inadequately understood. The parameters required to predict the
flow of water and plankton through the canal have not been adequately measured. The
processes of migration, establishment, and competition have been but little studied and are
not well-understood. To remove these deficiencies in our knowledge would require a
comprehensive, long-term program of well-coordinated physical oceanography, marine
ecology, and basic marine biology studies.
V-D-2
SUMMARY AND RECOMMENDATIONS OF THE COMMITTEE ON
ECOLOGICAL RESEARCH FOR THE INTEROCEANIC CANAL,
DIVISION OF BIOLOGY AND AGRICULTURE,
NATIONAL RESEARCH COUNCIL
1. Summary
Available evidence indicates that the Pacific and Atlantic Oceans were separated when
the Central American Atrato Trench closed in the late Pliocene, about five million years ago.
The formation of the land bridge resulted in different patterns of selective pressure on the
marine biota on either side, leading to unequal rates of speciation and extinction of species
in the two oceans. Of unique significance in this regard are the geminate species, because
among them can be found examples of every stage in the process of evolutionary divergence.
By conservative estimate there are 7,500 Atlantic and 8,500 Pacific species of marine
benthic algae and animals now living in Central American waters at depths of 0 to 100
meters. Of those some 700 species are common to both sides, ranging from about two
percent of the scleractinian corals to perhaps 20 percent of the polychaetes.
The inherent fragility of natural communities is exemplified by changes in the
mammalian faunas of North and South America after they intermingled following the
formation of the Isthmian land bridge. Man is now adding a whole new dimension of change
over a span of only a few decades. Witness the economic disaster to the fishing industry
brought on by the movement of the sea lamprey through man-made canals to the Great
Lakes, the introduction into Europe of the Canadian water weed and into Australia and
New Zealand of the European rabbit and other exotic mammals and birds. The reversal of
such ecological mistakes, even where possible, can be very difficult and costly.
Studies of the Suez Canal indicate that transmigration and colonization of marine biota
occur, chiefly from the ecologically more to the ecologically less saturated region; that
mobile, active organisms, and fouling organisms, are generally first to make the transit; that
large-scale population changes occur; that significant economic impact sometimes results;
and that barriers decrease the likelihood of dispersal. There are several possible major
consequences of a Panamanian sea-level canal:
— Changes in fisheries resources and the probability that these changes will be
uncritically attributed to the canal.
— Introduction of sea snakes and other troublesome marine biota, with consequent
danger to recreational users of the marine environment.
— Alteration of marine communities, precluding scientists from gathering information
on undisturbed habitats.
— Impact on the resident biota from introduced parasites and pathogens.
V-E-1
— Disruption of the distributions of endemic fresh water organisms before they can
be adequately studied.
— Destruction of marine communities, particularly coral reefs, by deposition of spoil
and subsequent longshore drift of silt.
Knowledge of the hydrology of a sea-level canal is adequate if not ideal, except for data
on disposal of spoil, littoral drift, specifications for tidal locks, and design characteristics of
a fresh water barrier. Oceanographic data are scant for inshore regions of Panama and for
the offshore Caribbean side; the former are the very waters that will pass with their
contained biotas through a sea-level canal. The taxonomy of the marine biota and of natural
communities is poorly known for a number of groups; their ecology in shallow waters is
virtually unknown. Key communities, particularly the soft bottom shelf, coral reefs and the
dominant neritic biota, would need to be monitored over a period of several years. The
establishment of biota banks as a permanent record of local biotas and the storage of
materials as representative of ecological communities are important corollaries to the
overall research. Support for training and research in taxonomy will be essential if adequate
surveys and assessments are to be carried out. In any event, manpower and fiscal limitations
will necessitate research emphasis on selected groups of organisms; other selected taxa are
recommended for studies on ecosystems, dispersal, parasitism, eurytopy, economics and
health. Available research resources for Panama, the adjacent coasts of Middle and South
America, and the Caribbean Islands are listed along with certain United States institutions
where supporting research can be conducted.
The larvae of many tropical invertebrate species seem capable of long-distance travel.
Marine organisms transported passively and established away from their place of origin are
generally tolerant of environmental fluctuations. Certain mobile, active organisms may
easily traverse the canal in either direction. Limited transmigration of pelagic species is
likely but there is only a slight chance that meso- and bathpelagic organisms will do so —
whether these would constitute propagules cannot be predicted. Early animal invaders might
arrive without their characteristic predators and, lacking new predators, become established,
forming a new biological balance. Studies on feeding habits of animals would provide
information of value in predicting the results of such encounters. Resistance to physiological
stress is singularly important in any organism’s capacity for dispersal and colonization.
Physiological measurements would identify subtle differences between existing populations
of the same species and between geminate species and would indicate to what degree the
tropical marine biota is stenotopic. Studies of colonization on transplanted substrates and
settling plates would offer important information on the potential for dispersal and
establishment. Finally, studies on mating behavior and reproductive isolating mechanisms
would be essential to an elucidation of evolutionary pathways taken by the biotas under
consideration.
Fresh water in the present Panama Canal constitutes a highly selective filter, permitting
only the occasional transit of organisms tolerant of a wide range of salinity. It is essential
that interoceanic migrations of marine biota through a sea-level canal be similarly prevented,
from the outset, by installing a fresh water thermal barrier. Specific salinities, temperatures
and lengths of the barrier are suggested; tidal gates would play a critical role.
It is recommended that an entirely new Commission be established, charged with
funding and supervising research, administering facilities and ships, soliciting and screening
V-E-2
proposals, and coordinating the activities of various other agencies and institutions. The cost
of the ecological research associated with the planning, construction and operating of the
sea-level canal is a fully legitimate part of the total cost of this canal and should be borne by
the users of the canal. To carry out the Committee’s recommendations, support for
facilities, staff, operation and maintenance is estimated to be:
Initial Capital Outlay = $4,080,000
Annual Budget (first year) = $2,668,000
Total Budget (first year) = $6,748,000
Annual Budget (second and later years) $2,118,000
The construction of a sea-level canal in Panama is a gigantic experiment with natural
ecosystems whose consequences are unforeseeable. A new canal will affect the animal and
plant life of the two oceans. What these effects are cannot be determined until and unless
the nature of the present differences between the biota and ecosystems of the two oceans is
first carefully established through perhaps a decade of intensive research. It is imperative
that studies be initiated immediately if a decision on constructing the sea-level canal, in the
affirmative, is made.
2. Recommendations*
a. Possible Major Consequences
e Many problems in applied and theoretical biology raised by the impending
sea-level canal urgently require solution.. The setting is international and calls
for involvement by the current CICAR Program (Cooperative Investigations of
the Caribbean and Adjacent Regions) of UNESCO, the International Biological
Programs, FAO (Food and Agriculture Organization) and other international
and national organizations. Because of the need for long-term research on a
broad international basis we recommend these problems for inclusion in the
International Decade of Ocean Exploration (see Introduction, 3 and II-3).
e Studies on the nature and extent of natural and fishery-induced population
changes are vitally needed in order to distinguish them from any effects of a
sea-level canal (see IJ-2a and IV-5). The following are recommended:
— Encourage the governments of Panama and other countries with marine
resources liable to be affected by the canal — Colombia, Nicaragua, Costa
Rica , Honduras, Cuba, Jamaica, Haiti and the Dominican Republic — to
develop and perfect their programs for the collection of fishery statistics
under FAO auspices.
* References are to the basic study contained in Appendix 16.
V-E-3
— Each of the countries involved should be encouraged through technical
assistance to initiate and develop programs of stock assessment in relation
to their own fishery resources. The cost of these programs should be shared
between the canal and the country concerned.
Studies on animals and plants of medical importance and those of potential
importance to tourism are recommended (see II-3bcd and IV-6).
b. Hydrology of the Canal
Although there is considerable information on the hydrology of the sea-level canal,
additional data are required on specific questions (see III-2 and IV-2).
More information is needed to determine (1) how tidal gates would affect
currents in the canal and how many hours the gates would have to be closed to
achieve zero net flow of seawater, (2) how much fresh water could be available
to create a barrier to the dispersal of marine organisms in the canal, (3) the
characteristics of temperature-salinity profiles throughout the year (also see
section V-4), and (4) specifically where the deposition of spoil would occur,
how much material would be spoiled there and what effects the spoilage would
have on benthic communities, especially coral reefs.
c. Oceanography
Nearshore zone processes. It is essential that basic physical data be collected
from the coastal zones of both sides of the isthmus in order to establish present
baselines for comparison with future conditions (see IIJ-3 and IV-3). The kinds
of data should include:
— A comprehensive budget of waves, including both swell and wind waves for
the offshore areas off each proposed entrance on the Pacific and Caribbean
coasts.
— A detailed study of the types of shore zones and sediments occurring along
each coast.
Coastal oceanography (see III-2 and IV-3).
— Gulf of Panama inshore survey. We recommend that an inshore current
survey be performed to elucidate the details of the westward coastal flow
in the inner Gulf of Panama, to determine the seasonal extent of such flow
and the nature of circulation in the Gulf. This coastal water will be the
source of supply for Canal water at the most probable environmental
monitoring sites.
— Gulf of Panama and Caribbean oceanographic surveys. Oceanographic
surveys should be made on both sides of the Canal, with high priority to
the Caribbean side, because: (1) general circulation is very much better
known on the Pacific side, and (2) it is on the Caribbean side that the
effects of the plume from the Canal effluent must be studied. Study of
circulation and mixing processes between oceanic and nearshore to coastal
waters should be closely coordinated and interrelated, with every effort
V-E-4
d.
being made to have the corresponding oceanic and inshore observations as
synchronous as possible.
Physical oceanographic studies after the installation of the canal can be
made at anytime but must be based on pre-canal observations. The
rationale for studies of flow patterns, etc. immediately after the canal is
opened is therefore to serve the needs of the biological program.
Biological oceanography (see III-3 and IV-3).
Large samples of biota, especially planktonic and pelagic organisms, should
be taken with comparable, standardized procedures in oceanic, nearshore
and canal sampling stations as quantitatively as the contemporary state of
the art will permit. These standardized sampling techniques must be
continued throughout the period of study in both Pacific and Caribbean
areas. Biological data banks should be provided for these samples. A
massive collecting effort is essential for detecting propagules.
A permanent sampling station should be established near the Caribbean
mouth of the canal to monitor on at least a weekly basis the biota present
in the effluent water.
Comprehensive collection of plankton and other pelagic biota on both sides
of the isthmus covering Marsden squares 008, 009, 44 and 45 must be
made before the canal is opened. Such a survey should be comprehensive
seasonally for at least one year and cover the biota of the upper kilometer
of the ocean.
Nearshore biological oceanographic studies that are comparable with those
on coastal oceanography and current studies must be done in the Gulf of
Panama in order to determine the biological quality of the water entering
the canal seasonally.
Biological oceanographic surveys must be made in the more open ocean,
mainly in the Caribbean, to determine, before and after the canal is open,
the gross effects on the oceanic biota in terms of the timing and effect of,
e.g., phytoplankton blooms associated with. the effluent plume. Area
covered should be the bight from Costa Rica to Colombia.
A repeat survey of biota should be undertaken over a much wider area of
the Caribbean than recommended above to trace the extent of movement of
Indo-Pacific forms into the Atlantic.
Marine Biota
Sampling.
We recommend that the marine biota be sampled to a depth of 100 meters
from Colombia to Costa Rica (both coasts), with emphasis on Panama and
particularly at and near the openings to the sea-level canal. Sampling on the
Pacific side must include both upwelling (Gulf of Panama) and, equally
important, nonupwelling (Gulf of Chiriqui) regions. Methods of sampling
are detailed in Appendix B; also see section IV-4a.
V-E-5
— Recommended study areas in Panama are given in section IV-7 for the
following habitats: soft bottom shelf, neritic plankton, sandy beach,
fouling communities, rocky intertidal, coral reefs and mangrove shores.
e Taxonomic analysis.
— The careful recording of much information on the marine biota must be
started as soon as possible. This will include an inventory of characteristic
elements of the biota, of the composition of the major marine com-
munities, and of the physiological tolerances, parasites, and pathogens of
the dominant components of the biotas (see IV-4b).
— We recommend that high priority be given to coral reef and subtidal soft
bottom communities and the dominant elements of the neritic biota as |
critical areas of study (see IV-7). |
— It is imperative that additional support be made available for systematic
research and for the training of graduate students prior to the opening of
the interoceanic canal.
— Detailed recommendations on taxonomic analysis are given in section
IV-4b and include:
— An intensive study of certain relatively well known groups of
organisms, such studies to serve as the base line for analysis of
post-constructional changes in the biota.
~ A study of groups of organisms that have particular significance for
ecosystem studies.
- A study of groups containing species with a strong likelihood of
dispersing.
— A study of groups that have species of particular economic or health
importance,
— We emphasize the recommendation that the research areas in the present
program be built about specifically solicited, highly qualified personnel.
e Establishment of biota banks.
— It is essential that collections of marine organisms be maintained in
permanent repositories in order to compare changes in the marine biota
after the canal is opened (see IV-4c). The concept of biota banks includes
two necessary functions:
— Long term storage of materials as a permanent record of a local biota,
particularly of taxa that cannot be studied at the present time.
— Storage of materials as representative of ecological communities.
— Storage of selected plant and animal material by freezing is recommended.
e. The Biology of Dispersal and Colonization
e Selected marine organisms should be reared under laboratory conditions
simulating the physical and chemical parameters they would be likely to ;
encounter during their natural dispersal. Emphasis should be placed on
eurytopic species, those of commercial importance, those thought to be
V-E-6
dominant species in communities and parasites that may be carried with their
hosts (see chapter V and section VI-2).
An attempt should be made to correlate the breeding habits and dispersal stages
of the organisms selected for study with an assessment of larval stages actually
predominating in the plankton. There should be included an analysis of the
proportion of species with planktotrophic larvae.
Rearing experiments to determine the length of larval life in the chosen species
are recommended. Ancillary information is needed on food requirements.
Studies on marine larvae must be closely allied with proposed physiological
research (see V-4 and VI-3).
f. Physiological Measurements
To provide a basis for prediction of possible colonization after transfer from
one ocean to the other and to seek subtle differences between existing
populations of the same species and between geminate species, measurements
are recommended on the following topics: behavior, protein specificity,
reproduction and rate of development, tolerance of environmental extremes,
metabolic measurements, and osmotic and ionic regulation (see V-4 and VI-3).
Particular care must be taken to obtain identical or geminate species from the
Bay of Panama and from the Caribbean.
It is recommended that a comparison be made between animals from
corresponding habitats in three areas — regions of upwelling, regions of the
Pacific where no upwelling occurs and areas of the Caribbean along northern
Panama. Further, it is recommended that to test the postulate that animals in a
nonvarying environment have limited capacity for acclimation, studies should
be made on similar species from Panama and from a temperate marine
environment.
It is important, if data from the physiological tests are to be used to predict
which species may successfully migrate from one ocean to the other, that the
preceding studies be initiated immediately.
g. Food Habits and Dispersal
Because of the relationship of food habits and success of dispersal, it is
recommended:
— That studies be carried out on feeding of selected benthic organisms,
inshore fishes, and sea snakes.
— That dominant species be chosen.
— That certain species of commercial importance and of aesthetic con-
sequence be studied.
— That species be chosen for research on both larval and adult nutrition (see
VI-4).
Emphasis should be placed on experiments both in the laboratory and under
natural conditions to obtain information on selected aspects of feeding
behavior (see VI-4).
V-E-7
Role of Passive Transport
Plankton carried through the canal by currents should be monitored,
particularly to test the effectiveness of the proposed biological barrier (see
II-2b, V-2a and VI-5).
Studies should be carried out on the nature and survival of fouling organisms
and of organisms in ship ballast (see II-2b, V-2b and VI-5).
Dispersal and Colonization Experiments
The empty island experiment is recommended as the best available approach to
the assessment of dispersal and colonizing ability (see VI-6). The colonization
of transplanted substrates should be studied under natural conditions and
experiments with settling plates should be carried out before, during and after
construction of the canal.
Parasites and Pathogens
An extensive survey of animal and plant parasites and pathogens should be
made on both sides of the proposed sea-level canal. The study should include
hosts belonging to all the major taxa — vertebrates, invertebrates, and plants
(see II-3d, IV-6 and VI-7).
Emphasis should be placed on selected species that are of potential economic
impact and that are deemed to be the most likely candidates to establish
themselves after traversing the canal and on those groups that frequently reach
epidemic proportions, that is, viruses, bacteria, fungi, protozoans and helminth
parasites or pathogens.
The economically most serious parasites and pathogens of the Atlantic and
Pacific should be tested in the laboratory for effects on the similar hosts in the
opposite area.
The degree of specificity of parasites and pathogens is an important subject for
research.
Geminate Species
Painstaking taxonomic analysis must precede the choice of forms for geminate
species studies.
Studies of pre-mating and post-mating reproductive isolating mechanisms
should be made by crossing and observing selected geminate species pairs (see
V-5 and VI-8).
Competition studies should be performed to learn how various closely related
animals will interact after a canal is built (should free access be permitted). The
ability of various territorial species to exclude resident species can be assessed
in a series of controlled behavioral experiments.
The behavior of geminate predators toward distasteful or dangerous prey
species should be studied, and information about the innate and learned aspects
of avoidance reactions should be obtained.
V-E-8
Biotic Barriers
Considering the grave potential dangers of interoceanic migrations of plants and
animals, it is essential that migration be prevented so far as possible by
installing the most effective barriers that can be devised. What is required is the
establishment of a freshwater-thermal barrier and a closing of tidal gates for
such lengths of time as needed to reduce the net flow through the canal to zero
(see chapter VII).
Assumed lethality for 48 hours exposure within a biological barrier:
— Utilizing salinity alone: 0.5 to 1.5°/oo (parts per thousand); a maximum
of 5 percent seawater is recommended.
— Utilizirig temperature alone, 45°C is recommended.
— Utilizing a combination of dilute seawater (salinity of 3.4°/.. or 10
percent seawater) and high temperature (37-38°C), 48 hours exposure
would be effective.
The size of the barrier needed would depend on the flow of water. Assuming a
period of 10 days for water to pass by tidal flow across the isthmus, the
above-specified barrier (dilution or heat, or both) should extend for a minimum
of 20 percent of the length of the canal, preferably for 40 percent.
Before the biotic barriers can be designed with confidence, a series of tolerance
studies on selected species should be performed. In general, a 48-hour lethal
test is sufficient for preliminary screening. However, tolerances should be
measured after different salinity and temperature acclimations. The tolerance
tests must be implemented at an early stage of planning, as they may influence
the specifications for a biotic barrier.
Provisions must be made to prevent flow through the canal in the event of a
mechanical breakdown in one set of tidal gates. The effectiveness of biotic
barriers will need to be assessed by continuous monitoring of physical
properties of canal waters and its biological components. Prior baseline research
on coastal waters is essential in order to permit accurate predictions of the
efficiency of the barriers.
Research on the feasibility of using novel barriers, a bubble curtain or a wall of
ultrasonic vibrations, is recommended.
m. Commission on the Ecology of the Interoceanic Canal
We recommend the establishment of a Commission charged with supervising
research, administering facilities and ships, soliciting and screening proposals,
funding research and facilities, and coordinating the activities of various other
agencies and institutions likewise interested in this area (see chapter IX). To do
this, a permanent office should be established in the Panamanian area as well as
in Washington, D. C. The Commission should have adequate staff support to
assist it in carrying out its tasks.
A distinguished Governing Board should be appointed, charged with supervising
the activities of the Commission. Government and nongovernment scientific
institutions and agencies should be represented on this Governing Board, as
should scientific institutions of the Americas, particularly the countries
V-E-9
bordering the Caribbean. As much of the research will be by contract, review
panels of the highest quality are essential.
n. Needed Facilities, Staff, Operations and Maintenance
Support of the ecological research associated with the planning, construction and
operation of the sea-level canal is to a large extent a legitimate element of the cost of the
canal. The Committee recommends that henceforth an item covering these funds be made
available from planning, construction and operation resources to the Commission
recommended in chapter IX. Until that mechanism can be established it will be necessary to
include a line item in the budget of an existing Federal agency to fund the researches that
are immediately essential (see Introduction and chapter X).
The budget given below does not include funding for recommendations on fisheries
given in section IV-S.
1. Initial Capital Outlay
a. Administrative Facilities $ 50,000
b. Research Laboratories $1,500,000
c. Special Equipment for Research $ 550,000
d. Equipment for Environmental Surveys $ 440,000
é: + Ships $ 940,000
f. Biota Bank $ 600,000
Total 1 = $4,080,000"
2. Annual Budget
a. Senior Scientists and Staff $ 800,000
b. Administrative Staff $ 100,000
c. Rental of Administrative Facilities $ 3,000
(see l-a) ;
Taxonomic Services $ 250,000
Operating Costs of Research Facility $ 70,000
(exclusive of 2-a)
f. Ship Operation, including Personnel $ 720,000
g. Service Personnel $ 40,000
h. Utilities $ 20,000
i. Travel $ 10,000
j. Publication Costs $ 10,000
k. Library, including Staff $ 20,000
1. Governing Board and Review Panels $ 25,000
m. Coordinated Programs $ 500,000
n. Contingency Funds $ 100,000
Total 2 (first year) = $2,668,000
GRAND TOTAL 1 and 2 (first year) = $6,748,000
TOTAL 2 (second and later years) = $2,118,000
V-E-10
#U. S. GOVERNMENT PRINTING OFFICE : 1971 O - 410-974
UNIVERSITY OF FLORIDA
TINO
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