- The Washington Times - Tuesday, April 25, 2006

PANAMA CITY — Panama’s president said a planned expansion of the Panama Canal would define the waterway’s “role in the 21st century” and yesterday called on voters to support a referendum to pay for the proposal.

The expansion to make way for huge new container ships that can carry twice as much cargo is expected to cost $5.3 billion — in a country whose government budget is $6.5 billion a year. It will be put to voters in a referendum later this year, after Panama’s Congress, where President Martin Torrijos’ party has a majority, gives the project the expected approval.

In a speech televised nationwide last night, Mr. Torrijos said the expansion, approved by the board of directors of the Panama Canal, was “the most important decision about the canal and its role in the 21st century.”

The biggest ships that can pass through the canal’s current locks are known as “Panamax” vessels and can carry 4,000 cargo containers. They barely fit in the locks, which are about 108 feet wide.

The new locks would be just under 180 feet wide, to allow passage of “Post-Panamax” ships, which carry 8,000 containers.

The government’s determination to widen the canal is fueled by fears that newer, larger ships will seek other routes between the Atlantic and the Pacific.

“The Panama Canal route is facing competition,” Mr. Torrijos said. “If we do not meet the challenge to continue to give a competitive service other routes will emerge that will replace ours. It would be unforgivable to refuse to improve the capacity of the waterway.”

Mexico and some Central American nations have suggested they might dig their own canals.

The government also is touting the creation of 7,000 new jobs during the five-year construction project, which it says could be complete by 2014, the centenary of the canal’s first opening.

“Without doubt, it is a formidable challenge and a gigantic project,” Mr. Torrijos said, adding that the project would be financed through canal fees and some bank investments without risking government social programs.

Some 13,000 ships passed through the waterway last year, paying about $1.2 billion for canal fees and maintenance and other related services.

Recent polls indicate 56 percent of Panamanians favor the expansion, 19 percent oppose it, and the rest are undecided, but there will be heated arguments before the referendum.

Opponents say the expansion is unnecessary and risky because it depends on variables such as the growth of maritime world trade and the world economy. They say there are only about 300 of the mammoth ships in operation and their trade routes are mostly within the Pacific, home to the world’s six largest ports.

“Our most important natural resource is not the canal, but our geographic position,” former canal administrator Fernando Manfredo said before Mr. Torrijos’ appearance.

Mr. Manfredo heads a group that is arguing for a $600 million megaport to be built at the Pacific end of the canal. It would allow the bigger ships to transfer their loads to smaller vessels for carrying through the canal and on to ports in the Atlantic.

“The canal will remain the best alternative regardless of the size of the ships,” Mr. Manfredo said.

The United States is the main user of the canal, followed by the South American countries as a group and then China.

Hutchison Whampoa, a huge Hong Kong conglomerate with close ties to the Chinese communist rulers, holds long-term leases on port facilities at either end of the Panama Canal.

The 50-mile canal uses a series of parallel locks to lift ships to the 170-square-mile Lake Gatun and then lower them as they cross between the Atlantic and Pacific.

Mr. Torrijos’ project would include a system to save part of the lake water that now flows into the oceans as ships move through the locks constructed by U.S. engineers a century ago. The president’s father, Omar Torrijos, negotiated the 1979 treaty that allowed Panama to take over the administration of the waterway on Dec. 31, 1999, the day the U.S. military presence in the nation ended.

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