Panama Canal Crisis Spurs Support for Indio River Reservoir Project

Survey Reveals Strong Backing from Business Community Amidst Water Shortage Concerns


Amidst the hydrological crisis gripping the Panama Canal, a rapid survey conducted by Elemente on Economic Activity in January 2024 revealed widespread support among companies in the country for the development of the Indio River reservoir project to alleviate the current situation of the interoceanic passage.

The survey engaged 221 companies across various economic sectors, including commercial (41), tourism (19), industry (19), and professional services (18). Participants were queried on their stance regarding the water situation for both human consumption and Canal operations, specifically regarding the development of the Indio River reservoir project. The results indicated that out of the 221 participating companies, 86% expressed agreement with the development of the Indio River reservoir project, with 2% in disagreement and 12% claiming unfamiliarity with the issue.

Project Details: Indio River Reservoir

According to the survey, the Indio River project is conceived as a solution to water management challenges, addressing needs for both human and industrial consumption as well as Canal operations. The project entails the construction of a water reservoir spanning approximately 4,400 hectares, equivalent to 10% of the surface area of the Gatun reservoir, with connectivity facilitated by a transference tunnel spanning roughly 9 kilometers.

The survey highlighted potential impacts on approximately 2,000 residents inhabiting the area, prompting the Panama Canal Authority (ACP) to initiate preparatory work in the region. Ricaurte Vásquez, the Canal administrator, has repeatedly emphasized the Indio River project as the most cost-effective alternative to the water crisis facing the Canal. However, he stressed the necessity of lifting restrictions on new reservoir construction and defining watershed limits to proceed with the project.

Next Steps

During a media briefing on January 17th, Vásquez reiterated that these proposals had been forwarded by the ACP board to the Executive Branch, awaiting a definitive governmental stance. The decision-making process involves deliberation within the Cabinet Council followed by ratification by the National Assembly.

Vásquez assured that if the proposals were endorsed, project execution would adhere strictly to laws safeguarding human rights, vulnerable populations, and property rights within the affected areas, alongside adherence to international performance standards and best practices throughout the process.

According to a report by the Voice of America, the construction of the Indio River reservoir is estimated at approximately $900 million, with a projected duration of four to six years encompassing social planning, construction, and reservoir filling. The Canal Authority is currently drafting bidding terms for the project. Vásquez affirmed the Authority’s financial capability to undertake the project should it fall under their jurisdiction.

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