Panama Leaders Considering Canal Upgrade: Waterway May Gain Third "Lane"

Article excerpt

Heather J. Carlson is a writer with The Washington Times.

Panama's government is considering an $8 billion expansion of the 90- year-old Panama Canal to allow bigger ships to cross to and from the Atlantic and Pacific oceans. Possible upgrades include adding a third "lane" to make way for a new generation of mammoth, post-Panamax ships spanning 180-feet across that can haul twice as much as the current Panamax ships. Panamax is the term for the largest-sized ships that can now pass through the Panama Canal. The canal now has two "lanes"--one for ships moving from the Atlantic to the Pacific, and the second for traffic in the opposite direction.

A canal expansion would be good news for U.S. companies that rely on cargo shipping, said David Hunt, executive director of the American Chamber of Commerce and Industry of Panama. "More and more international trade is going to the larger ships because it is more cost-effective," he said. "I think what you'll find in terms of U.S. trade is, it may not mean a real increase in trade, but it may mean a reduction in cost for doing trade."

Bolstering international trade is not the only reason for a canal makeover. Failing to modernize the canal could lead to its decline as a key trading passage. "If it [Panama] wants to maintain its ability to be a major gateway for the volumes of trade in the future, they've got to do something," said Chris Koch, president of the World Shipping Council, a D.C.-based trade association representing more than 40 shipping companies.

The canal being a cornerstone of the country's economy, its continued viability is taken seriously in Panama City. Martin Torrijos--elected president of Panama in May and sworn in in September--has called for a national referendum early next year on canal expansion. The new president is the son of Gen. Omar Torrijos, who negotiated with President Carter the treaties that turned over control of the waterway to Panama on the last day of the twentieth century.

The Panama Canal Authority, which has overseen the canal's operation since the U.S. turnover in 2000, has hired engineering consultants-- including the U.S. Army Corps of Engineers--to design locks for the third, wider "lane." Rodolfo Sabonge, director of the canal authority's planning and marketing, said the canal must be expanded to keep up with the steady growth of international trade owing to globalization. "The demand is expected to grow to levels we will not be able to handle in 2010," Sabonge said.

In addition to the wide, third "lane" to accommodate post-Panamax ships, the project would include deepening the canal an additional 10 feet to allow for the larger vessels. There also has been talk of building a new dam and artificial lake--which would displace some Panamanian farmers. …