The Panama Canal expansion will be one of the top issues relevant to Caribbean and Latin American port professionals, including navigation dredging, seaport security, expansion and port operating strategies.

All these topics will be featured at the American Association of Port Authorities (AAPA) Executive Management Conference for Latin America and the Caribbean from February 12 to 14.

The conference will be held in Miami Marriott Biscayne Bay Hotel and Marina.

source: http://www.bulletinpa.com/index.php?id=802

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Source: VIP Panama

>Singapore’s Minister for Foreign Affairs, George Yeo, has backed Panama’s ambitious plans for a major expansion of the Panama Canal.

>During a recent visit to Panama he said: “The Panama Canal expansion is important not just for Panama but for the entire (maritime) industry - for the global economy.”

Mr. Yeo travelled to Panama as part of an official delegation, which also included Panamanian Ambassador to Singapore Eduardo Real. Earlier this year, Singapore signed a Free Trade Agreement with Panama.

Foreign Minister Yeo told Minister of Panama Canal Affairs, Dr. Ricaurte Vásquez: “Singapore is a maritime hub. We live on trade. And the more open the world is to free movement of ships, the better it is for Singapore. We hope that you widen the Canal because it is good for the overall system.”

Panamanians will vote on October 22 in a national referendum on the proposed expansion. The project would build a third lane of traffic along the waterway through the construction of a new set of locks, doubling Canal capacity.

The expansion would help maximize Panama’s strategic location to become the great maritime hub of the Americas.

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Source: VIP Panama

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Source: VIP Panama

>The ports of the Republic of Panama, the merchant marine, the agencies and shipping lines, the Colon Free Zone, the railroad and many other service suppliers connected with the economic activities of the Panama Canal, are complemented mutually and form the Conglomerate of the Canal.

>This Conglomerate and the Economic System by-product of the operations of the interoceanic waterway contribute more than 20% of the Gross Domestic Product of the country and generate approximately 293,000 direct and indirect jobs.

The Chamber of Shipping of Panama, as an organization that groups together the great majority of the members of the Maritime Sector, sector, which shows the highest indexes of growth in the domestic economy over the past five-year period, after having studied the proposal of enlargement of the Panama Canal and consulting with all its members and national and international clients, considers that the enlargement of the Canal is necessary for the following reasons:

1. The Panama Canal is operating to almost 85% of its maximum capacity, which signifies that in a relatively short time, it will not be able to continue attending efficiently to the growing demand of traffic, a product of the tendencies of growth of international markets,

2. The Panama Canal requires increasingly more frequent cycles of maintenance due to its 96 years of uninterrupted use in the service of world commerce, which at the same time delays in great measure the traffic of ships that use the waterway,

3. The shipping companies, clients of the Panama Canal, are tending to build larger ships (Post-Panamax) for the scale of economic benefits that the same represent, and which currently cannot use the canal,

4. The shipping companies consider that the Panama Canal represents the most dependable and viable route to operate their ships on the Pacific and Atlantic oceans and they understand and accept that the enlargement will involve gradual increases in the anticipated traffic and that the principles of productivity, efficiency, security and cost-benefits that currently exist, will be maintained,

5. We Panamanians have shown great talent and professionalism in administering the canal efficiently since it was transferred back to Panamanian hands. As previously stated, we are convinced that this project, properly executed, will benefit Panama and all Panamanians equally, and we support firmly the proposal of enlargement of the Panama Canal.

>Julio De La Lastra, President, Panama Chamber of Shipping, signed in Panama on the 20th of August 2006

http://www.bulletinpa.com/index.php?id=730

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Source: VIP Panama

PANAMA CITY, Panama, September 24, 2007 – Locomotives play a pivotal role in the operation of the Panama Canal locks. Last week, at a ceremony at Gatun Locks, the Canal marked the completion of its project to replace all of the towing tracks on which the locomotives travel. The Panama Canal’s locomotive tow tracks run parallel to each side of the Canal’s lock chambers. The tow tracks enable locomotive units or “mules” as they are called, to move alongside transiting vessels, affixed by wire cables, to maintain a ship’s position during passage through Canal locks. Replacing the tracks, therefore, will increase the efficiency of transits at the Canal. (more)

“Well-run locks are critical to providing our customers with safe, reliable and efficient service. Ultimately, our goal in rehabilitating these tracks is to decrease the time a vessel spends in each lockage, increase efficiency and augment capacity,” ACP Vice President of Operations Manuel Benitez said. In total, the ACP has replaced 50,000 feet of tow track.

The new track, laid at the Canal’s Miraflores, Pedro Miguel and Gatun Locks, will enhance service, in part because the old tracks needed continual maintenance. “This is the first time we have overhauled the entire rail system. This upgrade – carried out without any significant service interruptions – helps us continue to offer safe, reliable and efficient service upon which our customers rely,” said Mr. Benitez. “In addition, this new track will increase efficiency because our new locomotives are built and designed to travel on it.”

About the Panama Canal Authority (ACP) The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the ACP is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the ACP’s Web site: www.pancanal.com. For Panama Canal video, please visit www.thenewsmarket.com/panamacanal.

SOURCE: Don Winner @ Panama-guide.com

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Source: VIP Panama

By Gail Dutton for World Trade Magazine - The Panama Canal Authority is experiencing every company’s dream—a steady influx of business with more than it can handle in the wings. Fueled by the rapid growth of Asian exports, the canal has to expand to remain viable. And when it does, it will ensure that the fleet of post-Panamax (PPX) ships, which grew 143 percent since 2002, can finally transit the canal—raising the threshold of trans-Pacific trade up a magnitude. Today, ships carrying more than 4,000 TEUs generally are too big for the Canal’s existing locks. In planning a new lane, with longer and wider locks and deeper channels, the Panama Canal Authority (ACP) expects to double cargo transiting capacity. With that capacity, say industry observers, should come reduced overall shipping costs and expanded shipping options after the new lane opens in 2014, in time for the canal’s centennial. (more)

Rodolfo Sabonge, vice president of research and market analysis for the Panama Canal Authority, suggests this all-water route may also reduce pollution, help distributors to locate distribution centers closer to the population, and boost the economies in states where those new facilities may be located.

U.S. carriers and businesses, while less ebullient, are optimistic.

A spokesman for Procter & Gamble Coffees, notes that although “most of our coffees don’t come through the canal, it could help with our Asian imports,” namely coffee beans from Vietnam or Indonesia. As an alternative to landing at West Coast ports and being hauled to processing plants in New Orleans, Kansas City and Sherman, Texas, shipments could come into New Orleans directly. “It’s too far out,” cautions Lars Atorf, to figure a cost/benefit analysis.

For Tokyo-based container ship operator Kawasaki Kisen Kaisha Ltd. (K Line), seven years isn’t too far ahead to start planning. Last June, it launched a weekly container service linking Asia with the East Coast of South America, “to meet fast-growing market demand,” and as a prelude, say observers, to pushing northward up the Atlantic.

Another very large Asian shipping line, which asked to be unnamed, sees other benefits, too. “It will let us get rid of uneconomical vessels,” an executive notes. The company expects to take delivery on 5 PPX ships by about 2010. But, he adds, terminals, cranes, capacity and infrastructure all need improvement. “Some ports will have to grow.”

Port improvement is, in fact, a recurring theme when discussing the Panama Canal expansion. APL’s Bob Sappio, senior Vice President, Transpacific Trade, says the new lane will allow economies of scale possible with PPX ships of 8,000 to 10,000 TEUs to be passed on only “if the terminal infrastructure in the U.S. is capable of handing them.” APL is hammering that message home at every opportunity. “If the terminals are incapable of handling the volume, the benefits of the expanded canal will be less.”

Port expansion

Today, only four U.S. ports can handle PPX ships—Seattle, Tacoma, Los Angeles-Long Beach, and Norfolk. East Coast and Gulf ports are preparing to change that.

“Once we heard about the canal expansion, the Army Corps of Engineers began to study its likely impact on Port Everglades,” notes Allan Sosnow, Port Everglades’ environmental project manager. It’s dredging channels now; in the future there are plans to increase capacity and intermodal operations, add new berths and enhance operational efficiency.

The expanding canal is only partially responsible for the burst of activity, though. U.S. ports need extra capacity regardless of what’s happening in Panama. “We all hope to move forward, and we all need to deepen channels and construct facilities,” to handle increased cargo, notes Richard Wainio, port director and CEO, Tampa Port Authority.

At the Port Authority of New York & New Jersey, expansion is underway. Half of its cargo, by value, comes from Asia already. To accommodate PPX ships, dredging is underway to deepen the harbor to 50 feet by 2014, according to spokesman Steve Coleman. (That project is designated a national priority by the U.S. Army Corps of Engineers, with a fiscal 2008 budget of $91 million.)

“We expect cargo levels to increase about 7 percent per year, and to double in 10 years from 5 million TEUs per year today,” Coleman says. The port authority is also in the midst of a $600 million project to add intermodal rail access to all terminals. In 2006, it added the capacity for 350 additional lifts and expects to handle 1.3 million by 2011,

Being able to accept PPX ships is only part of the issue for the ports. Even without the canal’s expanded capacity, “Significant delays are likely in the next few years,” notes Tampa’s Wainio. “The only part of the business expected to grow is the container business. So, to be a major player, you have to expand.”

For manufacturers or importers, though, there are some tradeoffs. “You should get lower unit costs,” Wainio says, by sailing 8,000 to 12,000 TEU vessels, but moving from Los Angeles-Long Beach by rail is faster than sailing through Panama and up the East Coast. But, rail doesn’t carry as much as ships.” In fact, one 4,000 TEU ship carries the equivalent load of 16 trains. In the tradeoff between cost and time, Wainio speculates that high value time-sensitive goods will still use West Coast ports and that commodities will save money and choose the canal route.

Today’s challenge for the Port of Long Beach is overcoming an environmental bottleneck that is delaying infrastructure and terminal expansion. As spokesman Art Wong elaborates, “The EIR (environmental review) has to be approved before we can even vote on going forward,” with terminal and intermodal expansions.

West Coast ports, he points out, have some significant advantages over their East Coast counterparts, including proximity to the West Coast population centers, and reliable rail connections. Most notable, however, is the fact that three of the four U.S. ports deep enough to handle PPX ships are here. So, “If the East Coast can’t handle PPX, they’ll come here,” Wong says, noting that the Port of Long Beach can handle PPX ships up to 8,000 TEUs.

Intermodal

There may be a catch, though. “The increase in Asian imports—primarily from China—is forecast to exceed the capacity of the ports to handle it,” based on existing rail and road infrastructure, according to Rodolfo Sabonge, vice president of research and market analysis for the Panama Canal Authority.

Admittedly, the Panama Canal expansion “could shake up U.S. logistics, but that’s not a given,” Wainio says. Many factors are in play, including how the widening is handled, how tolls are adjusted, West Coast port growth, intermodal rail expansion and plans for ports and intermodal links from Mexico. The right choices, expanding the elements of the infrastructure, will enable U.S. channels to prevail. To fail, however, will cause severe dislocation.

The largest intermodal line in North America, BNSF, is expanding its major intermodal hubs in Dallas, Chicago, Kansas City and Memphis and is developing logistics parks—industrial parks built around intermodal hubs, “with a lot of land around them for further development,” Steve Branscum, BNSF vice president of consumer products, notes.

Union Pacific doesn’t expect any major repercussions from the expanded Panama Canal, according to Brian McDonald, Vice President, Intermodal Marketing and Sales. It’s expanding its facilities and tracks, with emphasis on double-tracking the Los Angeles to El Paso run and expanding intermodal hubs in San Antonio, Dallas, and Salt Lake.

BNSF’s Branscum predicts that no more than 35 percent of the freight coming from Asia to the U.S. will go through the Panama Canal. Right now, he explains, about 75 percent of the Asian imports come through the West Coast and are distributed throughout the West and Midwest. “It’s quicker to ship from the West Coast than to send goods through the Panama Canal to the East Coast and then ship backwards to interior markets,” he says.

A widened Panama Canal is just one of the shipping options, though. From Vietnam and points south and east, the Suez Canal route is shorter. Therefore, Robert West, managing director of global trade and transportation at Global Insights in Lexington, Massachusetts, suggests that value-added goods from India may choose that route to the U.S. East Coast, while goods from China may choose West Coast ports and intermodal shipping or choose the Panama Canal.

Another option being explored by some of the Chinese shipping lines and U.S intermodal operators, focuses on expanding Mexican ports and then developing rail lines north. This offers an alternative to southern Californian ports to relieve any bottlenecks. “If we can’t improve the throughput or productivity on the West Coast, there’s a real crunch coming,” one shipping executive said.

The port most often mentioned as a major entry point, Lazaro Cardenas, is a deep-water port about 1,000 miles from the U.S. border. Branscum discounts it as a serious option, though. “A port city, to be part of a core intermodal network, needs to be near a big market,” Branscum says, and the Mexican markets haven’t developed to that point. Right now, it handles less than 100,000 containers and is expanding to handle nearly 200,000 containers by 2017. In contrast, the ports of Los Angeles and Long Beach handled 15 million containers in 2006.

Transshipping

Although Post-Panamax ships certainly will use the expanded Panama Canal, there are some powerful economic reasons not to. Global Insight’s West points out that it’s not cost effective for PPX ships to make multiple ports of call. The result, he says, may be increased transshipping in the Caribbean, with a PPX ship traversing the canal for a major hub port and reloading there for the trip back through the canal. The potential transshipping benefit is increased backhaul and more efficient distribution.

Another possibility, raised by Panama, is the creation of a megaport at the western entrance of the canal. In the past decade, Sabonge says transshipped cargo has grown from about 250,000 TEUs to 3 million TEUs. The proposed megaport would increase that number by allowing PPX ships to off-load there. Construction costs are estimated at $600 million.

The great unknowns

The effects of the new lane of the Panama Canal on U.S. businesses depend on a lot of outside factors. The first two are that Asia will continue to be the source of most of America’s imports, and that the Panama Canal will be the most desirable route to the East Coast.

The third unknown is what the government of Panama will do to the toll structure, although Francisco Miguez, manager, contracts and administration division, ACP, points out that toll increases are set in consultation with the canal’s customers and that no increase is planned in the foreseeable future. “Long term, we’ll consider market conditions in the toll structure. The idea is to capture for the canal the value we provide and encourage commerce and vessel traffic to continue to increase,” Miguez says. Right now, the canal is debt-free, with $1.7 billion in revenues.

The timing, also, “is ambitious,” notes APL’s Sappio. “It’s an extremely large project for a small country like Panama. With projected costs running $5.25 billion “they have to get it done, on time, with minimal cost overruns and in a way that sends a message to the world that’s it’s been done properly.”

Sidebar: Progress Update

In the year since Panama’s national referendum approved the expansion, financial and legal experts have been hired and requests for proposals have been issued in numerous areas. The first construction contract was this past July.

Expanding the Panama Canal is a huge project, “but it’s do-able,” notes Robert McMillan, chairman of the Panama Canal Commission until the 1999 handover. “I honestly believe Panama is trying to be above-board and transparent in what they’re doing,” he says.

Panama consistently has said the canal would be self-financing, but that really means the people of Panama won’t be stuck with the bill, Miguez explains.

“Funding hasn’t yet been arranged,” Miguez says, noting that the need for financing will come during the heavy construction phase scheduled for between 2010 and 2013 (financing is being coordinated by Japan’s Mizuho Corporate Bank, Ltd). Right now, Panama is evaluating options, including obtaining a credit rating for the ACP for the possibility of issuing bonds, he continues.

Gail Dutton

Gail Dutton is a veteran journalist, covering national and international business and technology issues from her office in Montesano, Washington.

SOURCE: Don Winner @ Panama-guide.com

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Source: VIP Panama

PANAMA CITY, Panama, April 26, 2007 – Following a recommendation from the Board of Directors of the Panama Canal Authority (ACP), the Cabinet Council of the Republic of Panama yesterday approved the proposal to restructure the Panama Canal’s pricing system and certain regulations. On February 2, 2007, the ACP announced its desire to move toward a charge that moves closer to the commercial value of the service and route. After a more than 30-day public consultation period, in which a total of 21 written submissions were received, the ACP conducted a hearing on March 14 where a total of 14 representatives from shipping and government expressed their views. On April 5, in response to industry requests, the proposal was slightly modified: implementation of the new charges, for certain segments, was postponed from May 2007 to July 1, 2007. These segments include: general cargo, dry bulk, tankers and vehicle carriers. Due to this modification, the issue was reopened for public comment for a 15-day period. A total of 10 written submissions, in both English and Spanish, were received by the ACP from various individuals and groups. (more)

Editor’s Comment: The United States managed the Panama Canal essentially as a not-for-profit enterprise from 1914 to 1999. Toll rates were kept as low as possible to further international trade, and the canal administrators collected just enough money from passing ships to make the canal self-sufficient. It paid for its own maintenance. Starting on 1 January 2000 the Republic of Panama assumed full responsibility for the operation and maintenance of the Panama Canal, including setting the toll rates. In the past seven years they have made several changes to the toll structure, to include managing the Panama Canal as a money making enterprise. Funds collected first pay for the daily operation expenses and maintenance, and the remainder is delivered to Panama’s national treasury and added to the general fund. Now that Panama has decided to expand the Panama Canal and build the third set of locks, this toll increase will generate more revenue to pay for the expansion. And rather than trying to keep tolls as low as possible, canal managers now study where the upper limits are - how much can we charge and still create an economic advantage for shippers to use the canal as opposed to other routes? The fact of the matter is that the Panama Canal is a monopoly, the only way to get goods quickly and efficiently between the Pacific and Atlantic oceans. You can strap those LCD TVs to the backs of chipmunks but that’s more expensive.

(ACP Press Release Continues)

Refrigerated cargo and passenger vessels will maintain the implementation date of October 1, 2007. Additionally, container ships will maintain the implementation date of May 1, 2008. The toll of $54 per TEU for container ships and other vessels with on-deck container carrying capacity, approved in 2005, remains on schedule to become effective May 1, 2007.

“With the new pricing system, the Canal is charging its customers a price closer to the value of services provided. We reached this decision through an open and transparent process, providing the industry with multiple opportunities to comment. The new system, approved yesterday by the Cabinet Council, reflects this open dialogue, incorporating several of the requests we received from the industry over the past few months,” said ACP Administrator/CEO Alberto Alemán Zubieta.

As the world becomes more interconnected – barriers dropping, tariffs reduced – the value of the Panama Canal and its role in the global supply chain continues to grow. Shippers moving goods from the U.S. Gulf Coast to Asia can save up to 10 voyage days via the Panama Canal, and vessels traveling from the West Coast of South America to the U.S. East Coast shave an estimated eight to 16 voyage days compared to alternative routes. Given the cost increases in shipbuilding, fuel and vessel operations, the route through the Panama Canal has significantly increased its value to its users.

Details on the new pricing system can be accessed, in English and Spanish, at www.pancanal.com. Significant elements include:

Maximum Displacement Draft vs. Arrival Draft: Vessels will be charged based on their displacement to simplify and streamline the process. This charge will now be based on the maximum displacement draft instead of the arrival displacement to assess tolls according to the specified tonnage rate.

Administrative Changes: Some administrative changes have been made, but these changes will have no economic impact whatsoever. These revisions provide necessary linguistic and grammatical clarifications to the document or reinsert missing words to processes and procedures.

Passenger Vessels: Regarding passenger vessels, an assessment of tolls will be based on maximum passenger capacity. In general, under this change, large vessels will be charged tolls on a per berth basis, and smaller ships will continue under the Canal tonnage tolls system. These changes are largely due to suggestions from industry representatives – another example of the ACP listening to the industry.

Tolls: The adjustment and implementation dates of the new toll rates will depend on the vessel type/segment, e.g. container vessels, passenger vessels, general cargo, refrigerated cargo, dry bulk, tankers and vehicle carriers. On average, there will be a 10 percent increase per year over the next three years. Yesterday’s announcement marks the first toll increase in the last four years. In 2005, the ACP adjusted tolls for container ships and other vessels with on-deck container carrying capacity.

About the Panama Canal Authority (ACP)

The ACP is the autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the ACP is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the Panama Canal Authority’s Web site: www.pancanal.com.

The Authority’s responsibility to the Panamanian people is paramount. The Canal belongs to the people and benefits from the Canal should accrue to as many Panamanians as possible. The Authority will plan its future so that it will continually contribute to the economic development and welfare of the citizens of Panama.

SOURCE: Don Winner @ Panama-guide.com

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Source: VIP Panama

marinelog.com The Board of Directors of the Panama Canal Authority (ACP) announced today that it has published its proposal to restructure the Panama Canal’s pricing system and certain regulations. On February 2, 2007, the ACP announced its desire to move toward a charge that reflects the commercial value of the service and route. After a 30-day public consultation period, the ACP conducted a hearing on March 14. The proposal announced today has been slightly modified from the February proposal: At the request of the industry, implementation of the new charges has been postponed from May 2007 to July 2007. Due to this modification, the ACP today is reopening the issue for public comment and will consider additional input, suggestions and feedback from interested parties over the next 15 days. After receiving comments and feedback from the maritime and shipping industry during its official consultation period, the ACP responded to industry requests by changing the proposal and postponing implementation of the new pricing. Moreover, with this proposal, the ACP is providing its customers with guaranteed pricing to 2009 — something no one else in the industry does. (more)

Following the public hearing, the ACP conducted informal consultations with customers and industry representatives at various conferences to listen and receive input, including: Intertanko, Connecticut Maritime Association, etc. The ACP also met with President Michelle Bachelet of Chile.

“This open and transparent process has given the ACP an opportunity to further understand the needs of the industry. They told us that they wanted the timeframe for implementation extended, and we listened,” said ACP Administrator/CEO Alberto Aleman Zubieta. “We look forward to continue providing our customers with a safe, reliable and efficient service, at a price that captures the true value of the route and service.”

The ACP’s proposal to restructure its pricing system and certain regulations reflects an effort toward charging its customers the market price of the Canal’s service today. As the world becomes more interconnected — barriers dropping, tariffs reduced — the value of the Panama Canal and its role in the global supply chain continues to grow. Shippers moving goods from the U.S. Gulf Coast to Asia can save up to 10 voyage days via the Panama Canal, and vessels traveling from the West Coast of South America to the U.S. East Coast shave an estimated eight to 16 voyage days compared to alternative routes. Given the cost increases in shipbuilding, fuel and vessel operations, the route through the Panama Canal has significantly increased its value to its users.

After the ACP’s Board of Directors reviews the comments received during the 15-day period, it will make a final decision and submit its recommendation to the Cabinet Council of the Republic of Panama for approval.

Prior to this announcement, the ACP held a consultation period (February 2, 2007 — March 12, 2007) and made the proposal available to all interested parties. The ACP received a total of 21 written submissions, in both English and Spanish, from individuals and groups. The consultation period culminated with a public hearing in Panama in which 14 representatives from shipping and government expressed their views during this open and transparent process.

The official proposal can be accessed, in English and Spanish, at http://www.pancanal.com/. Significant elements include:

Maximum Displacement Draft vs. Arrival Draft: The ACP is proposing a change for vessels charged based on their displacement to simplify and streamline the process. The Canal proposes that the charge is based upon the maximum displacement draft instead of the arrival draft to assess tolls according to the specified tonnage rate.

Administrative Changes: Some administrative changes have been made, but these changes will have no economic impact whatsoever. These revisions provide necessary linguistic and grammatical clarifications to the document or reinsert missing words to processes and procedures.

Passenger Vessels: Regarding passenger vessels, the ACP is proposing an assessment of tolls based on maximum passenger capacity. In general, under this change, large vessels will be charged tolls on a per berth basis, and smaller ships will continue under the Canal tonnage tolls system. These changes are largely due to suggestions from industry representatives and evidence another example of the ACP listening to the industry.

Tolls: The adjustments and implementation dates of proposed tolls depend on each segment that transits the Canal: container vessels, passenger vessels, general cargo, refrigerated cargo, dry bulk, tankers and vehicle carriers. The proposal calls for an average increase of 10 percent per year over three years. Of note, tolls for non-container segments have not increased in the last four years.

SOURCE: Don Winner @ Panama-guide.com

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Source: VIP Panama

Canal Expansion (Source) PANAMA CITY, Oct 19 (Reuters) - The Panama Canal, one of the engineering wonders of the world, will receive the biggest facelift in its 92-year history if Panamanians approve a plan to widen and deepen the waterway at a referendum on Sunday. Opinion polls show around two-thirds of people approve the government’s proposal for a $5.25-billion overhaul to allow increasingly large tankers to pass between the Atlantic and Pacific oceans. President Martin Torrijos has billed the referendum as Panama’s most important vote since it became independent from Colombia in 1903 but opponents warn it could bankrupt the small nation if costs spiral. Supporters of the expansion, planned to begin in 2008, hope it will bring a jobs bonanza for Panama’s 3 million people, most of whom live in poverty. “We have to think about our children, their future,” said Carlos Sanjur, a truck driver who supports the expansion plan. “It is progress and will bring jobs and investment.”

Opened in 1914 at a cost of $375 million and 25,000 lives, the canal ranks alongside France’s Eiffel Tower, the Golden Gate Bridge in San Francisco and the English Channel Tunnel as one of the world’s most stunning engineering feats.

Rosetta Stone

Dynamited and dug out by thousands of mainly Caribbean laborers who braved deadly malaria and yellow fever, the canal saves ships a long haul around South America’s treacherous Cape Horn and carries around 4 percent of world trade.

Its lock system is too small for many modern tankers.

Ships making the passage, mainly from the United States, Japan, China and Chile, also face longer waits these days to make the 50-mile (80-km) inter-oceanic trip as global shipping grows, partly due to the Asian economic boom.

The Panama Canal Authority, or ACP, which runs the waterway, warns the route will become log-jammed in seven years if nothing is done, meaning business will be lost to competitors like the U.S. intermodal system of ports and cross-country rail links.

The current plan would double capacity, with new sets of wider locks and deeper and bigger access channels, and let ships with 12,000 containers pass through, up from a present limit of around 4,000 containers.

CRITICS SAY TOO RISKY

But opponents say the size of the expansion is too risky for Panama, which is already saddled with a high debt burden, and if costs overrun, taxpayers could be forced to pick up the tab and investors lose money.

“I can’t believe anything the government says. If they need my land for the expansion, they will just change the law,” said peasant Felipe Murillo at a street protest against the canal expansion.

The project, due to be finished in 2014, needs $2.3 billion in loans or bonds to be paid back with revenues from higher tolls from ships using the canal, which would not be interrupted during the upgrade. Construction would create 7,000 jobs and up to 40,000 indirect jobs.

France’s Ferdinand de Lesseps, builder of the Suez Canal, started the Panama Canal in 1880 but abandoned it nine years later when the project went bankrupt.

The U.S. government bought the canal in 1904 and 10 years later opened the waterway. With an eye on naval supremacy and control of the Western Hemisphere, the United States ran the canal for most of last century.

In treaties signed in 1977 by then U.S. President Jimmy Carter and Panama’s populist dictator, Gen. Omar Torrijos, father of the current elected president, the United States agreed to hand over the canal to Panama in 1999.

ACP administrator Alberto Aleman said Panama long aspired to own the canal and after taking it over the country has run it well. “If the canal is expanded, tomorrow’s generation will see that as the canal grows, we all grow.”

But the canal has rivals. Nicaragua has recently revived plans to build its own inter-oceanic canal for $18 billion.
SOURCE: Don Winner @ Panama-guide.com

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Source: VIP Panama

Canal Expansion (Source) Oct 19 - Panamanians vote in a referendum on Sunday on whether to approve an ambitious $5.25-billion plan to expand the famous Panama Canal waterway to allow it to handle larger cargo ships. Here are some facts about the canal.

* When opened in 1914, the canal was the single most expensive project ever undertaken by the United States at a cost of $375 million, four times the price of the Suez Canal. France had started building the waterway in the 19th century but gave up after its project went bankrupt.

* France’s Paul Gauguin, one of the leading painters of the post-impressionist period, helped to dig the Panama Canal as a laborer briefly. But he found the work tough and he left the country after he was arrested for urinating in public. From 1891 he lived in Tahiti and elsewhere in the South Pacific.

Rosetta Stone

* The planned expansion entails building new locks that will measure 1,400 feet (427 meters) long and 180 feet (55 meters) wide — 40 percent longer and 64 percent wider than existing ones. If laid on end, these canal chambers would stand taller than the 102-floor Empire State Building in New York.

* Tropical diseases such as typhoid, malaria and yellow fever killed more than 25,000 canal workers during the original construction. However, this prompted leaps in modern medicine as doctors discovered that malaria was transmitted by mosquitoes, and not as earlier thought by “miasma” — polluted air dense with decaying matter.

* The amount of rock and soil removed from the ground to create the canal was enormous. Material from one nine-mile (15 km) section, known as the Gaillard Cut, would have been sufficient to form a wall, of a similar size to the Great Wall of China, to span from San Francisco to New York. ADVERTISEMENT

* Ships passing through the canal pay tolls. Canal authorities even charged U.S. adventurer Richard Halliburton to swim the 50-mile-long (80-km) canal in 1928. It was the lowest ever toll charged at $0.36.

* If the expansion is approved, the Panama Canal Authority that runs the waterway says contributions to federal government coffers will skyrocket. By 2025, the canal will provide $4.25 billion per year to the government, an almost tenfold increase from current levels.
 

SOURCE: Don Winner @ Panama-guide.com

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Source: VIP Panama