Canal expansion on ballot

Panama voters expected to approve $5.2 billion project today

October 22, 2006|By Chris Kraul | Chris Kraul,Los Angeles Times

PANAMA CITY -- Voters are likely to approve a $5.2 billion project to expand the Panama Canal today, according to polls, despite warnings of an accumulation of debt, competition, technical miscalculations in the project and possible environmental damage.

Only scattered opposition has developed to the proposal to expand the 92-year-old canal to allow transit of a new, larger generation of container ships. If voters approve, construction would begin next year and finish in 2014, in time for the 100th anniversary of the canal's opening.

Opponents, who include a former Panamanian president, a one-time canal administrator and assorted engineers and financiers, say that the expansion amounts to fixing something that isn't broken and that the nation is risking its most important asset on dubious engineering and financial assumptions.

Revenue from the canal accounts for 8 percent of the national budget.

The contrarian views have been obscured by the well-oiled campaign by the government of President Martin Torrijos to sell the expansion as an competitive necessity. Polls indicate that support for expansion has grown in the weeks leading up to the vote and that the referendum could pass by a 2-to-1 margin.

Canal administrators and many shipping experts argue that the canal risks becoming irrelevant unless it modernizes because of the enormous growth of container cargo traffic bound to and from the U.S. East Coast since the emergence of China as a world trader.

The rising volume has lengthened the waiting time for ships at either end of the canal. Alternative projects, including a waterway in neighboring Nicaragua, have been proposed to handle the extra traffic.

An expansion of the Suez Canal is also being considered, as are several projects to hurry freight across North America from new Canadian and Mexican ports.

If the referendum passes, the canal expansion would involve digging a third shipping lane and construction of a parallel set of locks for ships half again as large as those that currently cross the 51-mile canal.

The project would be entirely self-financed by the doubling of tolls over the next 20 years, said Francisco Miguez, master plan coordinator at the Panama Canal Authority, the quasi-independent body that has run the canal since the United States turned it over at the end of 1999. The authority would manage the expansion, as well.

Several experts doubt the expansion can be done for $5.2 billion. An expansion plan developed in the early 1990s envisioned the construction of new reservoirs west of the canal. The current plan, however, will avoid those reservoirs, and the displacement of about 8,000 peasants, by recycling 60 percent of the water needed to fill the new locks. The plan also foresees raising the water level of Gatun Lake, the main water source for the canal's locks, by 1 1/2 feet.

Chris Kraul writes for the Los Angeles Times.

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