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PANAMA CITY, PANAMA-In a move that will have substantial impact on the fortunes of real estate around various US ports, the Panama Canal Authority has opened the bids from a trio of engineering and contracting company consortia to build a third set of locks on the Panama Canal. Though the final decision has yet to be made, the authority announced that the “best value” bid came from Consortium Grupo Unidos por el Canal composed of Madrid-based Sacyr Vallehermoso SA, Milan-based Impregilo SpA, Luxembourg-based Jan De Nul nv and Panama City-based Constructora Urbana SA.

The authority has budgeted $5.25 to build the new lock and set a maximum price of $3.48 billion for the engineering work. Consortium Grupo Unidos’ bid came in at approximately $3.12 billion. The authority’s maximum price was not revealed to the bidders ahead of submissions. The other two consortia submitted bids of $4.19 billion and $5.98 billion.

The prospect of a third lock has already spurred expansion at several East Coast and Gulf Coast ports, which stand to benefit form the canal’s increased capacity. The new lock will allow passage of the new generation of super-sized freighters, which at this point cannot go through the canal. Today these ships have no choice but to unload their cargo at ports along the US, Canadian and Mexican west coasts, even if the merchandise is destined for points east of the Mississippi River. That means the cargo must be loaded on trucks or trains for cross-continental delivery. The new lock, which is slated to open in 2014, would enable super-freighters to carry the cargo closer to its ultimate destination by docking in Houston, Miami, Savannah, Charleston, SC and other more easterly ports.

Shippers already began diverting many smaller freighters to these ports over the past few years due to congestion and delays at the ports of Los Angeles and Long Beach, long the number-one destination for ships from Asia. Though effiency improvements at the Southern California ports and the decline in shipping due to the recession have effectively eliminated tie-ups in Los Angeles and Long Beach, shipping companies appear content with the new patterns and are unlikely to return to a freight model that depended so heavily on a single location. As a result, most analysts do not expect to see a return to the same high level of distribution development in areas like Southern California’s Inland Empire once the recession ends. They believe new development will still occur because of population growth projections for both Southern California and other Western states, but they anticipate a much more moderate pace of construction.

The canal expansion project was launched in ’06 and includes a variety of other improvements in addition to the new lock. When the expansion is complete, the canal will be able to handle twice its current cargo and passenger capacity.

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