- The Washington Times - Monday, October 23, 2006

The planned expansion of the Panama Canal, approved by Panamanian voters Sunday, is an important step forward that will double the canal’s capacity, canal administrator Alberto Aleman Zubieta told reporters yesterday.

The canal is getting close to capacity, and the expansion will allow larger vessels to use the passage, he noted.

The Bush administration also applauded the decision yesterday, noting the positive effect it will have on U.S. prices.

“There will be an impact on the pocketbook,” U.S. Ambassador William Eaton told reporters in Panama City. “The transit costs will be cheaper, and that will have an effect on the market.

“This is important to the U.S. It’s important to our economy,” he said. “We welcome expansion.”

The project is expected to allow container ships, cruise liners and gas tankers, which are currently too wide for the canal, to squeeze through.

About 30 percent of the 2,583 vessels docking at the Port of Los Angeles over the past year are too large for the Panama Canal, said Arley Baker, a spokesman for the port. Mr. Baker said ship traffic is growing so quickly along the West Coast that port officials won’t be concerned about an expanded Panama Canal.

“We see our cargo volume doubling between now and 2020, so we don’t view the expansion as a threat to our business,” Mr. Baker said. “The expansion will basically help keep Panama in the competitive picture.”

The canal authority estimates construction of the locks will take seven or eight years and may begin receiving ship traffic as early as 2014.

The biggest vessels now moving through the Panama Canal’s 108-foot-wide locks are known as Panamax ships, carrying up to 4,000 containers. But 27 percent of the world’s containerized shipping is hauled by vessels that can carry 8,000 containers and are too big for the canal. By 2011, 37 percent will be too big, the canal authority estimates.

Many international shippers said the expansion is necessary given the increasing amount of products from China, Hong Kong and other parts of Asia that need to be transported to stores on the East Coast. China is the canal’s second-biggest user, composing 18 percent of traffic.

Some Republicans have worried about Beijing’s growing influence in the canal zone. Ports on the waterway’s Atlantic and Pacific sides are managed by shipping giant Hutchinson Whampoa Ltd., which is controlled by Hong Kong tycoon Li Ka-shing.

But Mr. Eaton said the United States largely views Chinese interest in the canal as “purely economic.”

“They have a huge stake in making sure the Panama Canal operates efficiently and safely, just as we do,” he said. “We don’t see ulterior motives in the Chinese interest.”

Mr. Aleman struck a similar chord yesterday.

“I don’t have any concern because the Chinese don’t have anything to do with the managing of the Panama Canal.

“The Panama Canal is an entity that is owned and controlled by Panama — no one else,” he said.

Riordan Roett, director of Latin American studies at the Johns Hopkins University Paul H. Nitze School for International Studies, said that with the increasing use of supertankers, some sort of second route was going to be needed.

Nicaragua would like to build a canal that would compete with the Panama Canal and is lobbying for the project internationally, but that proposal “probably will fall by the wayside now,” he said.

• This article is based in part on wire service reports.

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