THE TOIL OF PANAMA

CANAL PROJECT

By Luqman Hakim
P-WM 0008/16
EUP 501: Risk Management
13th December 2016
 Project milestones
A 50-mile water passage at the isthmus of Panama connecting Atlantic and Pacific
Oceans.

1880 1904 1906 1914

First attempted by a US team redesigned it Stevens resigned and Officially opened
French, De Lesseps, from a sea-level to a replaced by George but it was
who also built the Suez lock canal. Chief Goethals who later downgraded due
Canal in Egypt. engineer, John Wallace focused on efforts at to outbreak of
resigned. Culebra Cut. WW1.

1902 1905 1913

New chief engineer,
US took over French
John Steven steered
assets for $40 millions.
the project with the help
of Dr. William Gorgas
Two steam shovels
from opposite direction
met and completed the
project.

Source: History Channel (2015) as the chief sanitary

officer.
Delays External factors
In 1880, De Lesseps estimated the cost to be Factors that are outside of the
$168.6 millions ending 7 or 8 years later. internal stakeholders’ control like:

He asked support from the French •  Economic;

Government for $120 millions in 1885. •  Social;
•  Political;
New plans in 1887 required $250 millions but •  Law & regulation;
only two-fifths of work had been completed. •  Physical;
•  Industrial relation;
De Lesseps died in 1893 and the project was •  Technology level; and
extended until October 1894 before taken •  Competition threat.
over by New French Canal Company.
Source: Trigunarsyah et al. (2007); Chan et al.
(2003)
Source: Avery (1913)
 Issue
In 1903, Colombia in which Panama is part
of it refused to ratify an agreement to allow
US to proceed with the canal project.

1. Political Solution
The Panamanians revolted against
Colombia and gained independence in
Source: Nix (2014) 1903.

US Secretary John Hay negotiated the

Hay-Bunau-Varilla treaty to give America
>500 square miles for construction.
US had to give $10 millions to Panama.
 Issue
Challenging terrain, hot, humid weather, heavy
rainfall and rampant tropical diseases.

Led to >20,000 deaths during French attempt

and 5,600 deaths while US gained control
between 1904 and 1913.
2. Physical The culprits were yellow fever & malaria caused
by bad air and dirty conditions.
Source: Nix (2014) Solution
They conducted better sanitation measures like
frequent draining and fumigations at areas with
stagnant water, eliminated possible breeding
spots and installation of windows screens in
buildings.
 Issue
De Lesseps thought he could practice the same
concept of cutting a sea-level channel through
low-desert region like what had been applied for
Suez Canal.

Panama required hilly/ rocky country to be

3. Technology traversed, diversion of torrential streams and
development of tidal basins that could not be
done with such primitive equipment.
Source: Kingsberg (2014)
Solution
Proper site investigation must be made and
anticipate potential issues with good
management plan.
The Americans replaced French’s tardy ladder
dredges with modern steam shovels.
 Issue
Lieutenant Wyse submitted a complete plan and
cost estimation for the canal which was brought
into a congress attended by France, Germany,
US and other countries.

Only 42/ 136 were engineers while the rest

4. Legal mostly were promoters, speculators, politicians
& Lesseps’ acquaintances.

Wyse’s plans were easily approved for a

Source: Avery (1913) consideration of $2 millions and turned to the
first French Canal Company.

Solution
The congress should have been a non-partisan
one by declaring all attendees’ conflict of
interests.
 Issue
Despite the two hospitals at Ancon and Colon
being well equipped, had excellent doctors &
surgeons, but they were handled under contract
by French Sisters of Charity.
They left the wards at night after prayer, leaving
5. Social the patients by themselves. Some patients died
the following morning.
The legs of hospital beds were placed in tins of
Source: Avery (1913)
water to avoid insects but they made a more
ideal breeding ground exacerbated by
unscreened windows & doors.

Solution
The Americans replaced the women from Sisters
of Charity with trained nurses.
Merits of problem
solving On schedule
Successful projects are ones that can
induce:

•  Client’s, team member’s and user’s

satisfaction; Within budget
•  Meeting of project goals;

•  Low accident rates;

•  Minimal conflicts; and Achieves specified

quality & safety
•  Reduced environmental harms.

Source: Sanvido et al. (1992)

 •  Cost & time overrun are due to loose risk
management;

•  Political instability can be handled by

administering proper contract well in
advance;

•  Prior to development, conduct detailed

site investigation and harness suitable
Conclusion technologies;

•  Learn from those involved in jurisdiction

process to preempt future disputes; and

•  Manpower is core to any project and

should be carefully selected and trained.