The locks contractor, Grupo Unidos por el Canal S.A. (GUPCSA), continues with design and construction activities in the areas of civil work, structures, dams, mechanical and electrical systems, and gates. The Panama Canal Authority (ACP) remains focused on GUPCSA design, safety, environmental and quality efforts. Excavation and structural-concrete placement are progressing at both sites (Atlantic and Pacific), as well as electromechanical activities such as grounding work and the installation of embedments for valves and other components.
Oversight surveillance by NDE Associates Inc. (a subcontractor of Expansion Program management-services consultant CH2M Hill Panamá S. de R.L.) continues at the Hyundai Samho Heavy Industries Ltd. facility in South Korea where the lock valves and associated elements are being fabricated, as well as at the Cimolai S.p.A. installations in Italy where the gate fabrication is taking place. Embedment fabrication is ongoing at both locations. A total of 26 valves were received on 2 May, and other shipments of completed valves are scheduled until November, when all deliveries of the fabricated valves must be completed. The fabrication and testing of the valve hydraulic cylinders by Bosch-Rexroth AG continues in China without any reported quality issues. Bosch-Rexroth is also directing the manufacture and testing of the hydraulic-power units in Pennsylvania, under a contract with Hyundai.
A quality-assurance assessment was performed for the completion of the four Atlantic-site intermediate gates by Cimolai, indicating that lock gates B1 and B2 could be considered substantially finished. Gates B3 and B4 required the completion of specified testing and the coating of internal and external areas. Gates B1 and B2 are now ready for shipment, while the finishing work on gates B3 and B4 is nearing completion. The assembly and block welding of the Pacific-site intermediate is likewise nearing completion, without significant quality issues reported. Block welding for the Atlantic lake gates continues, along with the panel welding for the Pacific lake and sea gates.
The locks design-oversight team continued to provide a resident engineer in Italy to oversee gate fabrication. A significant number of the submittals received by the team were associated with gate fabrication, gate-drive mechanisms and mechanical components.
Embankment work started for the 1W and 2E Borinquen dams (the northern dam on the west side and southern dam on the east, respectively). Repairs for the 2E dam were completed, and foundation treatment is being performed on the south end. In the area for the 2W dam (the southern dam on the west side), rock-fill protection has been placed. The cutoff wall construction for the Miraflores fault zone was completed. Grouting work for the dam was halted after rains flooded the core trench zone. Noncompliance notices for deficient surface-water control were issued because recent rains contaminated dam filter and clay-core work. GUPCSA implemented actions to improve drainage and remove and replace the affected embankments.
The Pacific-site volumes corresponding to the structural-concrete payments for April, May and June were 83,295, 84,722 and 103,218 cubic meters, respectively. The cumulative amount has increased to 1,282,014 cubic meters, while the cumulative excavation and dredging volume for the site is at 19.48 million cubic meters. In addition, 3,697 tons of steel arrived at the site in April, followed by 3,210 tons and the first electrical-equipment units in May. The second delivery of electric equipment — including transformers, motor control centers and switchgears — arrived in June.
The transportation of aggregate to the Atlantic site continued, with 227,014 tons of basalt delivered in April, 252,762 tons in May and 218,658 in June. The cumulative total is now close to 4.7 million. Steel deliveries of 2,096, and 2,768 tons, respectively, were made to the site in April and May. The volume corresponding to the monthly concrete-placement payment for the Atlantic site was 68,217 cubic meters for April, 70,353 cubic meters for May and 87,920 for June, bringing the cumulative total to 1,325,279. GUPCSA has been repairing concrete on hydraulic surfaces in the culvert, conduit and lock head areas. The adjusted cumulative excavation volumes for the Atlantic entrance channel and locks footprint are at 2.9 million and 15.5 million cubic meters, respectively.
The audit related to the construction of the Borinquen dams was completed, indicating general compliance in regard to the implementation of work procedures and plans. However, a meeting was held with the GUPCSA dam-management team and subcontractor representatives in regard to the surface-water control deficiencies. GUPCSA indicated that diversion and catch trenches and other control features would be installed.
A follow-up quality-assurance audit of the GUPCSA building designer was performed to review the implementation of the design-quality plan and the preparation and release of construction specifications and drawings. GUPCSA was issued a notice of rejection for defective concrete work in Atlantic-site monoliths after corrective actions taken over the last several months proved ineffective. The contractor has been instructed to develop a designer-approved repair procedure through its nonconformance process.
The initial compressive-strength results for new concrete mixes that are being used on both sites were in line with the design requirements. With respect to concrete batching, the project management team noted a number of instances where the required concrete-material proportions and the dosing of additives were either not in compliance with mix-design requirements or exceeded the allowable tolerances. A letter on this subject was sent to the contractor.
GUPCSA continued to demonstrate areas of improvement in the production, placement and finishing of concrete, although there were still some surface defects requiring eventual repair. The lack of adequate or effective GUPCSA supervision during concrete placement operations continued to be noted as a shortcoming. Concrete-repair work by GUPCSA increased at both sites. The contractor had several crews, of approximately 70 workers each, performing repairs on both sites. The project-management team noted that GUPCSA had adopted a systematic approach to mapping, completing and documenting repairs. Meetings were held with the contractor relative to the performance of concrete hydraulic-surface repairs; the design subcontractor needed to revise GUPCSA’s technical specification to include new tolerances and acceptance criteria for the hydraulic areas.
The interim-payment certificate application process was finalized for March, April and May, and the sixth and seventh interim-payment certificates for the advance payment for specified suppliers were issued.
On 30 April, the ACP received the decision of the dispute adjudication board (DAB) on the 10th case, which was related to the quantification of the variation for independent on-site testing laboratories. The DAB decided in favor of the contractor in regard to the scope of subcontracted testing. ACP rejoinders to the replies that GUPCSA had made to the ACP responses to GUPCSA’s statement-of-case documentation for the eighth and ninth cases were sent to the DAB on 26 and 19 April, respectively. The eighth case is associated with dredging and the Pacific-entrance cofferdam, while the ninth case is concerned with adverse climatic conditions on the Atlantic site. The DAB held hearings on both cases in May. The DAB announced in June that the cases were considered to be without merit. The formal report on the eighth case is expected in August; th ACP has already received the report on the ninth.
The determination by the Employer’s Representative (the person authorized to act on behalf of the ACP for contract purposes) to deny the concrete-mix and aggregate-production claim submitted by GUPCSA in July 2012 was sent to GUPCSA.
Pacific Access Channel
The contractor for the fourth excavation phase (PAC4) is significantly improving its capability to produce the filter material that is needed to build up the embankment for the 1E dam (the northern dam on the east side). Double shifts of crushing operations are running at all five crushing plants, and the contractor is acquiring materials from external sources to further address shortcomings in filter fabrication. However, project delays related to dam construction continue. Contract progress is at 67 percent.
Work on the grout curtain below the dam foundation, which is needed to prevent seepage, was completed over a 500-meter-long segment, permitting the final dam-foundation treatment. Almost 1.1 million kilograms of cement have been injected for the curtain so far. Progress with the rock-fill and riprap placements brought those totals to 731,600 and 51,600 cubic meters, respectively. About 242,000 cubic meters of clay for the dam core and 198,000 cubic meters of crushed rock to be used as filters and drains were stockpiled in June, with placement expected to start in July. The excavation volume in the areas for the access channel and dam footprint is 19.92 million cubic meters. After the ACP denied an appeal from the contractor regarding the rejection of a claim it had filed for $23.4 million and a 388-day extension, the contractor took the case to the Panama Conciliation and Arbitration Center.
Navigational Channel Improvements
The Atlantic-entrance dredging contractor completed the demobilization of equipment and parts attributable to the Expansion Program. The ACP started planning the last activity related to the project, which consists of the removal of reinforcing bars from the Atlantic-entrance area below what used to be the Mindi Dock. The ACP is currently preparing bid documents for a contract to remove the bars, with the corresponding receipt of offers expected in July. The contractor for the Pacific-entrance dredging completed all equipment demobilization in compliance with its contract, which was brought to successful conclusion.
The accumulated volume for the Gatun Lake and Culebra Cut component is at 21.6 million cubic meters, including the 13.8 million removed by ACP equipment and personnel. The ACP Dredging Division continued to work in the lake; the equipment involved in expansion work underwent service in June. The ACP received seven proposals in May for a contract for the construction of 25 range towers that are needed for the wider navigational channel, mainly in the lake, and the contract was awarded to Ingeniería Continental S.A. in early June. The ACP is currently evaluating offers for the supply of 22 buoys.
Water-Supply Improvements with the Raising of the Level of Gatun Lake
ACP personnel inspected the shops and equipment that are being used by IHC Vremac Cylinders B.V., the contractor for the fabrication of the 32 cylinders to operate the existing lock gates under the semisubmerged condition that will be experienced once the lake is raised. The contractor delivered the first shipment of eight cylinders in June, and all cylinders must be delivered by October. A detailed review was made after defects were detected in some of the recently delivered rubber boots to isolate the cylinders, and the ACP subsequently requested the replacement of 20 of the 42 boots. The other 22 rubber boots meet ACP needs and specifications. The supplier picked up the defective boots and submitted a remedial plan for their replacement, which the ACP is currently evaluating. Performance issues surfaced with the new contractor for the watertight doors and bulkheads to seal the cylinder rooms on the machinery-tunnel side, particularly on the Atlantic side.
ACP installation of isolation walls for placing the cylinders, rubber boots and conductor-slot drain valves is progressing. ACP personnel assigned to miter-gate activities prepared to install gate yokes and seals, while the installation of lake-level sensors by other ACP groups is nearing completion. The contractor for the Gamboa boat ramp and surveys dock is experiencing delays. The ACP plans to award minor contracts to address remediation work in the Gamboa pilot dock and the Gatun public ramp. Third-party remediation in the Gatun Lake area is an ongoing activity. ACP personnel completed remediation work in the Cuipo and Los Laguitos communities and are currently conducting joint construction efforts with the community of El Arrecifal. The public bid for the work in the community of El Limón was announced in May, and the ACP is expecting offers in July.
The ACP executed the option to renew the contract with Shearman and Sterling LLP, the consultant for legal advisory services of a financial nature. GUPCSA submitted a draft of the marine-cargo insurance policy for the transportation of the lock gates.
GUPCSA had 42 reportable injuries in April, one of which resulted in a fatality and 36 others in missed workdays. The fatal accident occurred in the Pacific-site lower-chamber area on 16 April, when Joaquín Vieira, 32, a Portuguese national employed as a carpenter for the subcontractor Tecozam Panamá S.A., fell 7 meters while removing formwork. He was using a fall-arrest harness, but it was anchored to a frame that came loose. The ACP received the final incident report from GUPCSA in May and requested that it be resubmitted to clarify inconsistencies. GUPCSA responded with a letter, stating that contractual obligations were met with the submittal of the report and that no further revisions would be made. The ACP is currently evaluating the correspondence to determine if additional measures are warranted.
The GUPCSA incident rate for April rose to 5.36, from 3.03 in March. There were 36 reportable injuries for GUPCSA in May, all involving days away from work, and the incident rate decreased to 3.76. There was one other injury under the Expansion Program in May, a minor laceration to a PAC4 contractor that required stitches. GUPCSA incurred 33 reportable injuries in June, all but one involving days away from work. The incident rate was about the same as it had been for May. Only one other significant incident was reported in June; it involved an ACP employee who injured his wrist and leg while assembling a floating pipe for the “Mindi” cutter-suction dredge.
Four findings were identified during a scheduled ACP field audit in May of the GUPCSA industrial-hygiene program at both the Atlantic and Pacific sites. During a visit in April by corporate health and safety officials from Fomento de Construcciones y Contratas S.A., a member of the PAC4 consortium, the ACP took the opportunity to express its concerns and solicit safety-management system improvements.
The reforestation-maintenance contract in the Campana National Park was completed as part of the ecological compensation for the second phase of the Pacific access channel excavation. This was the second Expansion Program effort to have completed the entire five-year reforestation cycle. The inspection of areas in Chame and the Azuero Peninsula with a potential for mangrove-reforestation work was initiated by the ACP in May.
The contract for paleontological advisory services came to a close in April, with a press conference, presentations by two scientists from the Smithsonian Tropical Research Institute (STRI) and a public exhibition of the findings. Approximately 150 people attended, including representatives from the media, ACP, STRI, Technological University of Panama and National Environmental Authority (ANAM). Semiannual reports by the independent consultant Environmental Resources Management Panamá S.A. for the credit facility lenders and ANAM indicated Expansion Program compliance with environmental and social requirements. In June, ANAM conducted inspections of the Pacific locks site, the Pacific entrance and PAC4 area. Land titles for the three families affected by the project to increase the level of Gatun Lake were issued by the National Authority for the Administration of Lands, and environmental-closure assessment training was held for ACP specialists.
After receiving the requested sixth disbursement from the credit facility lenders in the amount of $100 million, the ACP submitted a request for the seventh disbursement in the amount of $50 million, for a total disbursement of $1,200 million, from the $2,300 million available under the common terms agreement. In compliance with the agreement, the ACP provided the credit facility lenders with reports on a work stoppage at the Atlantic site for the locks project and on the Pacific-site fatality.
In May, the ACP paid commitment fees and made debt-service payments corresponding to the period from 15 November 2012 to 15 May 2013. The ACP and the Andean Development Corporation (CAF) signed the first amendment to the CAF credit facility agreement in June, reducing the applicable margin on the first $150 million of the $300 million disbursement to 1.2 percent. (The margin will remain at 1.4 percent for the second $150 million.)