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The Panama Canal Authority (ACP) has begun looking for the firm that will help it manage the proposed $1.6-billion Río Indio reservoir project, which is needed to ensure the availability of freshwater for the interoceanic waterway.
The RFQ, posted on Aug. 18, seeks project management, engineering and construction consultant services tied to its water projects office for the reservoir project. The deadline for submissions is Oct. 6.
The project includes construction of a dam, artificial lake and 5.2-mile-long, 4.5-m-dia transfer tunnel to Lake Gatún intended to secure water for canal operations and drinking water for roughly 2 million Panamanians.
Tender documents specify the tunnel will be dug by tunnel boring machine, a change from the 2019 conceptual design, which called for drill-and-blast excavation. Alongside the main rockfill dam and spillway, the works include three auxiliary saddle dams and bottom outlets. The agency has published no estimated project value.
Under the tender’s terms, bidders are not required to have a local presence in Panama, foreign firms may bid through local representation and consortia are permitted so long as both the price and technical proposals are filed under the consortium name.
The documents also wall the winner off from the construction work. Firms that worked on the reservoir’s conceptual design are barred from bidding for this contract, and the successful bidder — along with its affiliates, parent companies, joint venture partners, shareholders and directors — is barred from any part of the construction contract or from supplying the eventual builder.
Canal officials say they are looking for firms that can provide expertise in areas outside of the ACP’s experience.
«The dam is very similar to the locks, but we will have a focus on tunneling,» ACP Deputy Administrator Ilya Espino de Marotta told ENR in June, describing the program management contract then being prepared. Tunneling, she says, is «something that we haven’t done before.» Espino de Marotta becomes the authority’s administrator Oct. 1.
The project’s Category 3 environmental impact study—begun this spring, and the document that will carry the reservoir’s full technical and baseline record—is due to Panama’s environment ministry between December and January. The design-build tender for the reservoir itself follows, with construction targeted to begin in 2028. Reservoir operations are expected to begin in 2031.
A Capacity Expanding Project Arrives Mid-squeeze
Concerns about the availability of water for canal operations have sharpened in recent weeks as the ACP has taken steps to conserve the resource in the face of increasing traffic and El Niño conditions.
Traffic, meanwhile, is running strong: 10,726 transits and 390 million tons in the first nine months of fiscal 2026, both up year over year. On the project’s own timetable, the reservoir will not deliver water to Gatún until 2031 or 2032—years beyond the dry season now in view.
On Aug. 20 the authority cut the number of vessels it will schedule through the locks each day, capping the Neopanamax locks at nine slots and the Panamax locks at 25 for booking dates from Sept. 4, then dropping the Panamax figure to 23 for booking dates from Sept. 15.
Across both sets of locks the published schedule now offers 34 slots a day, falling to 32 next month.
The steps followed a series of reductions in maximum allowable draft that began in June. The maximum Neopanamax draft is currently set at 48.5 ft, where it has sat since Aug. 15. It is scheduled to fall to 48 ft on Sept. 2 and to 47.5 ft on Oct. 1.
Rainfall across the canal watershed ran 34% below the historical average from May through August and inflows 44% below, which ACP calls «a substantially reduced hydrologic response despite the onset of the rainy season.»
Forecasts point to a potentially severe 2026-27 El Niño, and the authority names the January-to-April 2027 dry season as the exposure it is managing toward.
The lake, which also provides fresh water for more than 2 million Panamanians, has not reached crisis levels. Gatún stood at 84.1 ft on Aug. 21, about a foot below the late-August average for 1965 through 2020 and more than 4 ft above where it sat on the same date in 2023.
ACP projects expects the Gatún to reach 83 ft in mid-October, significantly under a five-year October average of 85.5 ft . In 61 years of daily records only three Octobers have come in lower: 2015, 2019 and 2023. Each was followed by a year of restrictions.
The situation is only expected to deepen in the future. In a 2023 integrated water resource management study prepared with the U.S. Army Corps of Engineers, ACP projected demand on the canal basin rising from 50.4 equivalent transits of water a day to 64.0 over the following half-century.
The study’s first conclusion about the whole portfolio was that «no single measure provides a complete solution,» and that any workable plan would need measures both inside and outside the canal watershed.
Río Indio enters that study as Measure No. 16, one of 18 evaluated. It scored the second-highest annual economic benefit of any of them, at $282 million a year, behind only a larger Caribbean inter-basin diversion scheme—though the study stopped short of costing it, so no benefit-cost ratio was struck.
Laying the Groundwork
The contract management tender is the latest in several actions by the ACP to keep the reservoir project moving forward.
In April the ACP awarded a $17.5-million design-build contract for two roads in the area of the reservoir to Consorcio Rutas Río Indio, made up of MACASA and RETRANEQ. A third 10.6-km segment has yet to be tendered. The agency is also exploring options for soil-testing laboratory services across all proposed road segments, and is procuring the rehabilitation and maintenance of tertiary roads inside the watershed.
Tender documents list other work in train. The ACP is running a cost and schedule risk analysis and a seismic hazard analysis, along with studies of the design flood and probable maximum precipitation for the dam. It has contracted the environmental impact study and advisers on both the resettlement plan and a livelihood restoration plan, and is weighing a contract for the design and construction of a power line to serve the project.
For most of the last year, ACP has been negotiating with the 423 families who live in the rural area the Río Indio reservoir will inundate. A total of $400 million has been set aside for the effort and officials say more than 70% have accepted its compensation framework. The first relocations are not expected before late 2027.
Efforts to relocate cemeteries in the area have met resistance. Under an executive decree published July 21, new burials at the El Limón cemetery in Chagres district stopped on July 30 and a replacement cemetery at Los Cedros opened the same day. The decree sets Jan. 15, 2027, as the cutoff for burials at seven more cemeteries inside the project area, and replacement sites for those have not been designated.
While the decree provides for exhuming and moving existing remains in coordination with families, the Coordinadora Campesina por la Vida filed suit at Panama’s Supreme Court on Aug. 3 seeking to annul it.
