The Panama Canal Authority is looking to build a new water reservoir within the next six years, to provide relief from drought conditions that have stalled passages through the crucial waterway. 

A court ruling on July 8 cleared the way for the $1.6 billion project, allowing the canal authority to reinterpret a 2006 regulation that had previously prevented it from expanding outside of its existing watershed, the Associated Press reports. The new reservoir would be situated along the Indio River, adding to the network of lakes that provide water to Gatun Lake, one of three that feed into the locks that allow ships to move through the canal. 

Drought conditions slowed travel through the Panama Canal for much of 2023, cutting daily traffic from the usual average of 36 ships to 31. The onset of the rainy season in May has since eased the crisis, with daily transits increasing to 33 on July 11, and then 34 on July 22. According to canal administrator Ricaurte Vazquez, the planned Indio River reservoir will make it easier to to maintain a 36 transit/day average, adding "a higher level of reliability for the route." 

The canal authority still has to get approval from the 12,000 people living in 200 villages around the Indio River basin in order to move forward with the project. Those talks are expected to take around one to two years, following by three to four years of construction.