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July 2011 www.sname.org/sname/mt KELLY: e passage of naval ships through the Panama Canal is still a fairly small segment, comparatively speaking. Do you foresee more naval vessel transit once the expansion is complete? QUIJANO: No, that has no bearing in this whole for- mula. Actually, there were some people speculating that were doing the expansion just to be able to put a Ronald Reagan-class type aircraft carrier [through the canal]. We said, No.? I mean, it has no bearing. In fact, that class of vessel, none of them can actually go through the Panama Canal. Not because the hull cannot make it; the hull actu- ally ts inside the space. But the overhang of the platform for the landing and so on would actually hang up on the walls. So that was very quickly shown to the people who were saying that we were doing this. You know, the U.S. strategy in regards to the position of the naval ships depends on how many they have and where the centers of conict are in the world at any given time. So they move vessels through here back and forth. Sometimes, if its a conict in the Pacic, theyll move them through here. A conict in the Atlantic, theyll move them again. But they dont tell us whats going on. ey just pass them through when they need to pass them through. ere are other countries that also have some vessels going through here. You have the Europeans as well, some French vessels going through here, some British vessels going through as well maybe. I think todays armed engage- ments in conicts are so dierent than they were some years back. You dont have to be moving the ships back and forth through a Canal just to get them in place. You have such a large naval eet now that the U.S. can man- age very well, place their assets where they need them without any problem. at was not the case back when eodore Roosevelt was looking at building this canal. At that time, the kicker was a Spanish war and how quickly could the U.S. get to Cuba. It was like, Hey, we need to do something about it,? and that was the initial trigger. e strategic value for military purposes of the Panama Canal has dwindled to nothing nowadays. Its not a sig- nicant number of vessels that go through here and this denitely is something that in our commercial evalua- tion of the business, we do not consider it as something that would make us go one way or the other. KELLY: Okay. If you could identify the number one risk area for this expansion project, what would you say that is? QUIJANO: Well, we split the whole program into smaller projects so that we could better decipher any particular risks and then take care of them. So far we have identied all of them and were taking care of them. From an environmental aspect, weve done everything that needs to be done to actually comply with all the environmental requirements so thats not really a risk. Basically, our big risk right now is making sure that the locks project in particular, which is the most complex one, gets done on time. So its more of a time issue, to ensure that we nish it by the last quar- ter of 2014. I think we have mitigated or eliminated most of the other [risks] by splitting it by smaller proj- ects, and all of the projects are running at a very good pace. We have completed two dry excavation projects. Basically, the third one is almost done. So we have the fourth dry excavation project ongoing almost reach- ing 30%. e locks project is the one thats going a little slower, but its within 2% of where it should be at this point in time. All of the dredging projects should be finished here within a year and a half, at the very most. So I say well been done with all of the projects by some time between August and November 2013. So thats leaving only the locks project to be completed in the following year. So in terms of risk?Id say basically making sure that the contractors stay on track. We have learned from the experience that from every project that we put out on bid, we started to learn from the rst one to the second one to the third one. So the learning curve allowed us to really incorporate any risk mitigation activities into it. ere are always risks, and of course you could have a storm, the contractor could go belly up?all of those are things that weve looked at, but we feel wed be covered with proper performance bonds and ensuring that we pick good contractors, that we have a fairly good administration of all of the projects to ensure that were on top of them and not just letting them do it at their own pace. Were trying to facilitate processes so that, if the contractor may have any prob- lem lets say importing goods or anything like that for the projects, that we can streamline those processes so that were a little bit ahead of that game. So that is the only focus right now. I think we have the people that have the talent both from our end and from the contractors end. So now its keeping on top of them to make sure theyre on schedule. MTCONTINUED ONLINE For more of our interview with Jorge Quijano, go to www.sname.org/SNAME/mt/exclusive/default.aspx