Panama to Name New Private Operator to Restore Balboa Shipyard

As part of its efforts to restore full operations at the Balboa Shipyard, Panama expects to enter into an agreement with a private operator to assume operations of the yard. Restoration of the shipyard would be a critical step for the shipping industry as it is the only shipyard able to handle large ships on the Pacific Coast of Central America.

Reuters is quoting government officials in Panama as saying that they expect to award a contract for the refurbishment and operation of the yard to a private operator by the end of 2021 or early 2022. In February, the Panama Maritime Authority launched a tender offer seeking a new operator for the shipyard. The contract is valued at approximately $18 million.

Built to service vessels operating the Panama Canal, the yard was handed over to Panama as part of the Canal Treaty with the United States in 1979. Private companies have operated the yard for Panama until 2018 when a dispute with the operator, MEC Shipyards, led to Panama removing the manager and closing the yard. Partial operations were resumed in the summer of 2020 with approximately 300 workers and two of the yard’s three dry docks.

Located on the Pacific side of the Panama Canal at the southern entrance, the Balboa Shipyard is the largest facility between California and Chile. It has three dry docks including one capable of handling Panamax vessels.

The tender offer calls for a 20-year contract for the operation of the yard. In turn, the company will upgrade the facilities and restore full operations with the three dry docks. 

Last November, Fincantieri announced that it had entered into an agreement in Mexico to develop the largest shipyard in the Americas to be located on the Atlantic in the Yucatan state. Construction was expected to begin this year on the yard that will include two dry docks able to accommodate ships up to 1,320 feet as well as 1,000 feet of dock space, cranes, workshops, special equipment, offices, and warehouses. The Fincantieri yard in Mexico is expected to be fully operational by 2027.