Panama Canal: Cost Calculations

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For each construction project, no matter how large the size is, the cost management for every project all is indispensable. Make a study and analysis of the work costs are one of the most efficient and extensively used methods of managing costs and determining job performance. So the Panama Canal Project Committee found a comprehensive engineering cost maintenance system in 1907 to record the unit cost of different work elements.

Different project expenditures are recorded separately every month, and the schedule and the amount of supply used and the amount consumed is accurately recorded. From these records combined with the engineer‘s expertise and work experience, engineers can recognize whether the work is going well and know which part should be more efficient or must be improved. Cause the Panama Canal is a very long artificial waterway that links the Atlantic Ocean with the Pacific Ocean, and there are some factors will influence the project cost which are project size, complexity, site location, quality of work and type of materials, market condition and management factors. So this construction need be divided into Atlantic Division, Central Division, and Pacific Division.

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Due to various conditions such as terrain and length of those divisions, the budget and direct costs of them are also different. People know that the proper weighing of unit cost records requires an understanding of the local conditions and familiarity with the market to make a correct judgment. For example, due to the high cost of production of stone and sand, so the concrete at the Atlantic region is more expensive than the average price. However, the budget of the Engineers Committee in 1908 made for the project and the actual spending as of June 30, 1913, has a huge difference. The table below compares the data: The difference is not for no reason as the width and depth of the lanes and locks increases In the Atlantic Division in order to allow the larger ships to pass and opened additional gates, then the cost of tunnel excavation will be affected.

In the Central Division, the width of the channel in the Culebra Cut increased and also added a concrete retaining wall and other enhancements in the excavation. In the Pacific Division, similar to the Atlantic Division, the size of the locks and channels have also been deepened and widened. Also, due to military reasons, the locks and dams move to farther inland so adding the length of the dredging channel, narrowing the area of Lake Miraflores. Research of total expenditure to June 30, 1913, shows the record of the actual cost of different projects to the close of the financial year 1913.

In Atlantic Division the Dry Excavation and Canal Prism cost $1,480,000 (1913 dollars), Dredging Canal Prism costs $8,515,000, Gatun Dam and Spillway charges $11,573,000, the Gatun Locks charges $28,343,000, Toro Point Breakwater costs $2,643,000 and Miscellaneous costs $950,000. So with a total cost of around $53,504,000 for the Atlantic Division. For the Central Division that Gatun to Pedro Miguel, the Dry Excavation and Culebra Cut cost $83,749,000, the Dredging work of the channel for the Gatun Lake cost $194,000. Sum them up, total Central Division (Culebra Cut) costs $83,943,000. It is relatively a high cost in this program. For the Pacific Division, Dry Excavation and Canal Prism cost $3,388,000, Dredging Canal Prism costs $11,249,000, Pedro Miguel Locks and Dams cost $11,665,000, Miraflores Locks and Dams cost $18,236,000, Naos Island Breakwater costs $405,000, Terminal Facilities and Balboa cost $2,125,000 and Miscellaneous cost $287,000. The total amount of Pacific Division costs $47,355,000. Moreover, some general construction items such as lighting, buoying, oil and transmission lines cost $514,000. The above total direct charges to Construction includes three divisions, and general items spend $185,316,000. Some expenditures are not chargeable directly to Construction.

Department of Sanitation costs $16,250,000, the Civil Administration and Law cost $6,438,000 and payment to French Company costs $40,000,000,pay to Republic of Panama $10,000,000. The improvements and relocation of the Panama Railroad cost $14,200,000, and the steamers purchased and repaired spend $2,680,000. The Canal Zone Buildings spend $10,288,000, and Canal zone waterworks of roads and Improvements cost $9,647,000, the miscellaneous Items cost $1,052,000. So total payment of Items not directly chargeable to construction are $110,555,000, then total expenditures on fortifications (incomplete) are $3,114,000.

Finally, the total of all Expenditures is $298,985,000 in 1913. This project really cost a large amount of money in United States history to that time. However, one particular aspect is that it had cost less money than engineer estimated compared to other canal projects, and the Panama Canal was completed in 1914 and was formally opened that August. The final cost to the United States $352 Million (1914 dollars).


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