Panama President to
Unveil Plan for Panama Canal Expansion
April 24, 2006 — By Eloy O. Aguilar, Associated Press
PANAMA CITY, Panama — Panama's
president is asking his citizens to approve a multibillion-dollar gamble
on the future of the Panama Canal: a plan to refit the waterway to
accommodate huge modern cargo ships that would entail the greatest
modifications since the canal opened in 1914.
President Martin Torrijos was scheduled on Monday to outline a plan to
expand the canal for the large cargo ships that cannot fit through its
33-meter-wide (108-feet-wide) locks, designed by U.S. engineers about a
century ago. He will need to get the plan approved in a national
referendum later this year.
The project, backed by the Panama Canal Authority, would be a mammoth
investment for a country whose annual budget is US$6.5 billion (euro5.3
billion).
The government's determination to go ahead with the project is fueled by
fears that the new cargo ships -- which can carry twice as many
containers as those that fit through the canal -- will seek other
routes, reducing the importance of the Panama Canal and its
income-generating capacity.
In 2005, 13,000 ship crossings left US$1.2 billion (euro1 billion) in
Panamanian coffers for canal fees, maintenance and other related
services.
The canal, 32 meters (105 feet) above sea level, uses a series of
parallel locks or water chambers to lift ships to Lake Gatun for the
80-kilometer (50-mile) cruise from one ocean to the other. A third set
of wider locks would allow the larger ships to get through.
The additional locks would require a system that would save part of the
water that is now dumped into the oceans as the ships are lowered or
lifted. It would also require widening the canal basin fed by the
Chagres River.
The government has not said how much will be spent on the expansion,
although independent analysts estimate it will cost between US$5 billion
(euro4 billion) and US$8 billion (euro6.5 billion).
If approved, the project is expected to take at least six years.
Panama took over administration of the waterway on Dec. 31, 1999, a day
after the last U.S. flag was lowered in what used to be the Canal Zone,
signifying the end of U.S. military presence here.
Opponents of the expansion, among them former canal administrator
Fernando Manfredo, argue that it is unnecessary and risky because it
depends on variables like the growth of maritime world trade, world
economic fluctuations and even political factors.
"Our most important natural resource is not the canal, but our
geographic position," Manfredo told The Associated Press, adding the
Pacific is becoming the "ocean of commerce."
Manfredo is the leader of a group that believes an estimated US$600
million (euro488 million) megaport at the Pacific end of the canal would
be a better idea. It would be a cargo center where the large ships would
transfer their loads to smaller ships that would carry them to the
Atlantic.
The group says there are only about 300 ships too large for the canal
and their trade routes are basically in the Pacific, where the six
largest megaports are located.
"The canal will remain the best alternative regardless of the size of
the ships," Manfredo said.
The United States, which built it, remains the number No. 1 user of the
canal, followed by the South American countries as a bloc and China.
About 14,000 ships representing 5 percent of the world's trade pass
through the canal each year.
Roberto Eisenmann, a banker and political analyst, said that the canal's
capacity is reaching its limit and the expansion would also help ease
the strain.
He added that private banks have shown their willingness to finance the
project.
Recent polls indicate that 56 percent of Panamanians favor the
expansion, 19 percent oppose it and the rest are undecided.
Source: Associated Press
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