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Panama Canal officially opens after $5.25B expansion
Chinese cargo ship first to journey through 80 km
of locks expanded to handle mega-vessels
The Associated Press
Posted: Jun 26, 2016
Thousands of people watched as the Neopanamax cargo ship, Cosco
Shipping Panama, made its way through the new Agua Clara locks, part of
the Panama Canal expansion project, near the city of Colon on Sunday.
(Moises Castillo/Associated Press)
Fireworks exploded as a huge container ship made an inaugural passage
through the newly expanded Panama Canal on Sunday, formally launching
the Central American nation's multibillion-dollar bet on a bright
economic future despite tough times for global shipping.
The Chinese-owned Cosco Shipping Panama passed through the Atlantic
locks in the early morning and by afternoon had completed the
80-kilometre journey to the Pacific, stewarded by tugboats and cheered
by dignitaries and exuberant crowds of thousands.
The $5.25-billion US project went online nearly two years late after
construction delays, labour strife and apparent cost overruns. But
officials were still bullish and in a celebratory mood as they declared
the expanded canal open for business.
"This is an achievement that all of us Panamanians should be proud
of," President Juan Carlos Varela said at a ceremony on the outskirts of
Panama City. "Today marks a historic moment for Panama, for our
hemisphere and the world."
"This new transit route is the tip of the iceberg in making Panama
once again the logistics centre of the Americas," canal administrator
Jorge Luis Quijano said. "And it represents a significant opportunity
for the countries of the region to improve their infrastructure,
increase their exports."
Crowds that began gathering before dawn lined both sides of the canal
waving flags, partying to salsa music and watching videos on giant
screens. Authorities said about 30,000 people and eight foreign heads of
state were attending.
"It's a one-time experience, a great achievement," said Felicia
Penuela, a homemaker from Colon province. "Panama is showing the world
that even though it is a small country it can do great things."
Expansion a 'winning bet'
The Cosco Shipping Panama is a 48.2-metre-wide, 300-metre-long
behemoth that is one of the modern New Panamax class of mega-vessels
that are seen as the future of global shipping and will now be able to
use the canal. It carried some 9,000 cargo containers during the
inaugural voyage.
The waterway's capacity doubles with the new locks, and canal
authorities are hoping to better compete with the Suez Canal in Egypt
and tap new markets, such as natural gas shipments between the U.S. and
Asia.
"The Panama Canal, with this expansion, is an important player not
only for regional maritime commerce but worldwide," said Oscar Bazan,
the Panama Canal Authority's executive vice-president for planning and
commercial development. "The canal is a winning bet."
Authorities said Sunday said that 85 per cent of the 166 reserved
crossings scheduled for the next three months are for container ships.
Container cargo accounts for nearly 50 per cent of the canal's overall
income.
- During a media tour of
the Panama Canal, people take selfies to mark the
occasion near Colon City, Panama, on June 11, 2015.
Grupo Unidos por el Canal, the main contractor in a
multi-billion-dollar project to expand the canal's
capacity, began flooding the new locks on its
Atlantic side. (Carlos Jasso/Reuters)
1 of 10
Panamanians at the ceremony expressed hope that the expansion
will help the economy in a country where about 25 per cent of the
people live in poverty.
"I think the inauguration of the locks is excellent for the
current generations and those to come," said Moises Gonzalez, a
40-year-old mechanic who worked on the construction of the locks for
six years. "Opportunities for us. We have to find a way for it to
reach the people."
However, the party comes amid a lull in global shipping due to
the drop in oil prices, an economic slowdown in China, which is the
canal's second-largest customer, and other factors that have hit the
waterway's traffic and income.
Since the 80-kilometre canal was handed over from U.S. control at
the end of 1999, it has generated about $10 billion in direct income
for the Central American nation and is responsible for about 40 per
cent of its GDP, factoring in related economic activity. Some 35 to
40 vessels transit the waterway each day, and the canal is estimated
to handle about six per cent of world maritime commerce.
Panama began the expansion nearly a decade ago. Originally
planned to open in late 2014 around the waterway's centennial, the
new locks can accommodate ships that carry up to three times the
cargo of those previously able to use the canal.
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