Jun. 15, 2016


Jorge L. Quijano

Panama

Jorge L. Quijano

Administrator & CEO, Panama Canal Authority

BIO

Jorge L. Quijano is the CEO of the Panama Canal Authority. He is a graduate of the industrial engineering school of Lamar University in Beaumont, Texas, and holds a Master of Engineering Degree in Industrial Engineering and Management. Quijano began his professional development in the Texaco Oil Refinery in Panama, where he worked as a Process Engineer and Product Forecaster. He started his career with the Panama Canal in 1975 and became Maritime Operations Director in 1999. In September 2006, he was designated to manage the Panama Canal's $5.25 billion expansion program and was appointed Executive Vice President of the Engineering and Programs Management Department.

Why was a dedicated authority, separate from the government, established to manage the canal?

This organization evolved from the fact that the US managed the canal as a public utility for the better part of 85 years. The Panamanian people wanted to make sure that the canal would operate outside the political sphere and therefore decided that it needed to be totally independent both financially and operationally, unlike the other government institutions. We resorted to a constitutional amendment, which took place in two different legislatures in 1993 and 1994. The success of the Panama Canal has had to do with this marked independence from government rooted in the constitution, but contingent that it would be operated safely, uninterruptedly, efficient, and that it must be profitable.

What spillover effects will the expansion of the Canal have?

The spillover effect has already been felt. The construction of a project of this magnitude requires many workers to mobilize to the project, both from different areas of Panama and abroad. At peak of the construction some 14,000 workers were being employed on the many Panama Canal Expansion projects. This significantly increased consumption in goods and services including housing in Panama. We have already spent about $5 billion on the project, much of which has been pumped into Panama's healthy economy. Moving forward, the expansion will not only allow our present customers to benefit from the economies of scales provided by the larger vessels that will soon be able to transit the canal, but it will also allow the canal to exploit opportunities for growth in other sectors.

What opportunities will the new port of Corozal provide and why is this project so important?

Additional port capacity is needed on the Pacific side to attract more container trade to Panama. We have an area of 120ha in Corozal that can be developed into a transshipment container terminal. By having additional port capacity on this end we should be able to attract one or two additional services of the container trade. Just one container service per week means 104 vessels per year, or $70-80 million additional business for the canal itself, in addition to an expected $25 million in initial revenue that would come from the terminal concession. That is part of our new diversification strategy, as we are concentrating mainly on those activities that add to Panama's logistics strength on account of its favorable geographical position. We also see opportunities that go beyond the container terminal—we have reclaimed a considerable amount of land which was contaminated with unexploded ordnance left by the US military and which we cleared to make it suitable for the new locks and channels. We are currently working on a master plan for the first 257ha, which we want to develop into a logistics park, another business that we would we target for concessions. This would promote more use of the port on the west bank and add value to PSA's port that is now undergoing an expansion on account of a land concession awarded to it by the Panama Canal to add two post-Panamax berths.

What are your expectations for 2016?

Our outlook is that 2016 will probably be similar 2015. We are finishing the third set of locks, and our expansion should be operational by the end of 2Q2016; every effort is focused on not missing that deadline. This of course is not entirely in our hands since we dependent substantially on our contractors' ability to execute. With regard to contractor claims, they will take some time to resolve, and we have a strong team that represents us well in these processes. In the meantime, we are concentrating on getting the construction completed with the required quality, and to begin to see our customers making use of our new locks and channels. The pressure is on us, both locally and from abroad. This project is the largest expansion of the Panama Canal ever—it will be done when it is done, and we want it done right.

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