Posted on 10/20/2006 1:10:22 PM PDT by Republicain
PANAMA CITY, Oct 20, 2006 (AFP) - The Panama Canal is set for a major overhaul if voters Sunday approve a 5.25-billion-dollar plan to widen the strategic waterway to accommodate modern mega-ships.
Proponents say the canal will reach capacity in 2012 and that its expansion is critical in the face of competition from other maritime routes.
The government says the work would be financed by a hike in tolls, worth 1.2 billion dollars in 2005.
Polls predict a victory of more than 70 percent in favor of the expansion in Sunday's referendum.
"We are optimistic," said Rodolfo Sabonge, the director of planning for the Panama Canal Authority.
"Between Hong Kong and the east coast of the United States, ships take three days longer via the Suez Canal. But if the lines lengthen at the entrances to the Panama Canal, shipowners will seek an alternative," he said.
It takes just eight to ten hours to cross the Isthmus of Panama, the tiny middle of the Americas, via the 80-kilometer (50-mile) canal. But the actual average time, including the wait, is 26 hours.
Promoters of the project also point out that modern shipping relies more and more on mega-ships too large for the canal, considered a marvel of engineering when it was completed 92 years ago.
If the canal is not expanded to accommodate modern shipping needs, "other countries will take Panama's role in moving world cargo," said the country's President Martin Torrijos.
The proposed third lane, parallel to the existing two, would accommodate massive post-Panamax vessels 366 meters (1,200 feet) in length, 49 meters (160 feet) wide and with a 15-meter (50-foot) draft.
Today, such ships -- too wide and too long for the Panama Canal -- must go all the way round Cape Horn at the southern tip of South America to connect ports on the east and west coasts of the Americas.
Panamian authorities say the project will generate 7,000 direct jobs, and 35,000 indirect jobs. Work would begin late next year and is projected for completion in 2014.
The canal's current capacity of 14,000 ships per year would increase to 17,700, they say.
Built by the Americans between 1904 and 1914 after an initial failed attempt by the French, the canal is the driving force of Panama's economy. Eighty percent of Panama's gross domestic product, 16 billion dollars in 2005, is linked to canal activity.
The biggest current user of the canal is the United States. Sixty-nine percent of the goods moving through it are bound for or coming from the United States, followed by China (18 percent); and Japan (17 percent), the Panama Canal Authority says.
Detractors say the government has underestimated the cost of the project by some three billion dollars. They cite damage to the environment from the expansion and argue that the government should focus instead on fighting poverty, which touches 40 percent of Panama's three million people.
"It's a project that meets the needs of Panama's oligarchy, which will pocket hundreds of millions of dollars in bribes," said Miguel Bernal, a law professor at the University of Panama.
"The no vote is silent. People are afraid," he said, lamenting that the no camp lacked funds to argue its case while the government has spent lavishly to promote the project in a publicity blitz.
If the canal is expanded, post-Panamax container ships and vehicle carriers would be able to use it but it would remain too narrow for American aircraft carriers and oil supertankers.
Everyone should read the book "The Path Between the Seas", about the building of the Panama Canal. It's an awesome story.
Call the Peanut Man first.
Too bad we don't have a say in it. Ugh!!!!! It still makes me mad that we don't own it anymore. Of all that President Carter did.....this is one of the worst....oh he has so many worst that I don't think he did anything good for the country.....no not one thing!!!
Unresolved Questions- the Panama canal, good, bad, or a waiting disaster?--thread II
These people are incredibly stupid. The Canal Authority is talking about espanding the canal, which will create new jobs. What do these morons think that means? New jobs = more people working = less unemployment = less poverty. Socialists are idiots. With apologies to idiots.
Are they going to call it the Palindrome Referendum?
It'll pass because Panamanians fear the loss of revenue to their northern neighbor if it doesn't. Nicaragua is already willing and has the route planned to build a post-Panamax capable canal across their own country. The only reason it isn't moving forward is that the Nicaraguan government doesn't have the $18 billion needed to put the whole thing together. If Panama doesn't widen their canal to accomodate these ships, it's a sure bet that Nicaragua will get the investors it needs to build a bigger competitor.
Panama doesn't want Nicaragua to have a bigger, better canal because it will eat into their revenues. Panama has little going for it beyond the canal and the money it generates, and the result of it being relegated to second class status would be devastating.
Folks,
The following article was written by NewsMax whom I truly dislike. They are hysterical and are liars. They were responsible for making many folks believe the Panama Canal is run by the Chicoms. But this is probably the only article with which I agree. They probably wrote it by mistake, or were drunk, or were on drugs:
Panama to Vote on Widening Canal
Okke Ornstein
Monday, Oct. 16, 2006
When the United States completed construction of the Panama Canal in 1914, it had taken American and French companies 34 years and a fortune in treasure and blood more than 27,000 workers had died primarily from malaria and yellow fever.
The monumental canal project has been an engineering feat likened to the eighth wonder of the world.
On Oct. 22, the Panamanian people will vote in a special plebiscite regarding an equally staggering project: widening the Panama Canal to allow for large container ships.
The decision to expand the canal is entirely Panama's. In 1999, the U.S. finally completed its transfer of the canal to Panama, which turned over control to the Panama Canal Authority (ACP).
Each year some 5 percent of maritime world trade passes through the canal, and it remains the principal shipping route between Asian ports and the East Coast of the United States.
Expanding the canal should be a no-brainer. Today, supertankers and large cargo ships exceeding 4,000 containers (ships of 4,000 or less are appropriately called "Panamax" ships) cannot use the narrow canal.
It's been estimated that 60 percent of new container ships are "post-Panamax" ships larger than 4,000 containers.
The ACP also sees the canal reaching capacity in the next decade, maxing out at about four dozens ships transiting each day.
For the canal to remain competitive, size matters. In July, Panama's Congress approved a $5 billion proposal to add a new set of locks to the canal and to widen the existing locks from 108 feet to 150 feet. If the Panamanian people approve the plan, construction is to begin in 2007 and the entire project should be completed by 2014.
The government headed by President Martin Torrijos son of the late dictator Omar Torrijos has vigorously pressed the project, arguing it will generate employment, boost the Panamanian economy, and help Panama join the First World.
Project Sparks Debate
The rosy view painted by the government is not shared universally. Critics fear a massive new debt burden, little economic benefit to Panama's poor, and a bonanza for corrupt politicians and contractors. Guillermo Endara, the first democratically elected president after the military dictatorship of Manuel Noriega, and still a prominent political figure, worries most about corruption.
"This is the project of a small group that is motivated by financial gain," Endara told NewsMax.
"They're in a hurry because they want financing and contracting of the work to be done during this administration."
Panama continues to be plagued by official corruption and ranks poorly on corruption indexes compiled by organizations such as Transparency International. (TI ranks Panama's corruption levels on a par with Mexico, Ghana, and Turkey.)
U.S. ambassador William Eaton recently expressed his concerns.
"There is a lamentable culture of impunity protecting the powerful as well as government officials," he said.
In November 2005, the United States revoked the visa of Panama Supreme Court Judge Winston Spadafora, citing corruption.
But defenders of the canal improvement plan say corruption will be limited because the project will be administered by the ACP, an institution that has gotten high marks from Americans and Europeans.
"Corruption is a big problem in Panama but the Panama Canal has never been run better than it is today," said Roger Noriega, former Assistant Secretary of State and a visiting fellow at the American Enterprise Institute.
Spokesman William Ostick of the U.S. embassy in Panama explained that the autonomous Canal Authority has been highly transparent in its contracting and finances. "We expect that financing and execution of this project will be done with the same transparency that has characterized the ACP so far," he said.
But some Panamanians see corruption infecting the ACP.
The ACP has "never managed a project of this magnitude before so it's impossible to say that corruption will not be a problem," said Miguel Antonio Bernal, a Panamanian constitutional law professor. Bernal opposes the project, and points out that board members of the ACP are often former government officials. They include Norberto Delgado, a former minister of economy and finance in the notoriously corrupt government of President Mireya Moscoso. Delgado was the subject of a high-profile investigation for illegal enrichment that was eventually halted by the Supreme Court on a technicality.
"You cannot be corrupt in New York and be non-corrupt in California," said Bernal.
Too Big, Too Expensive
Panama is a relatively small country of 3 million people. Its GDP amounts to just over $14 billion (by the current exchange rate) and some estimates place the actual cost of the canal improvement project just under that figure.
Any new debt would add to Panama's current national debt of more than $9 billion.
But President Torrijos has assured the nation that the project will be self-financing. No debt will be incurred by the state and Panama will not guarantee loans needed to finance the undertaking, as the ACP is an autonomous institution.
Construction will be paid for by the ACP itself and additional financing of no more than $2.3 billion will be sought on the financial markets. The ACP projects that its profits will increase from $484 million in 2005 to $4.3 billion in 2025. Thousands of jobs will be created as the project attracts other businesses and investors to Panama.
"The proposal and its financing certainly reflect the professionalism of the ACP regarding this extraordinary project," Roger Noriega remarked.
Various banks and governments of user countries have also voiced support for the proposal.
"I'm not surprised, because this is a gift to the users that we are paying for," says Tomas Drohan Ruiz, the former head of engineering and dredging at the Panama Canal. He is one of the many independent experts who claim that the project will cost much more and that it is too big a risk for Panama to take.
"In 1993, a Tripartite Commission, with representatives of the Panamanian, United States, and Japanese governments, presented a report about constructing a new set of locks, and they calculated that it would cost more than the ACP now estimates," says Drohan.
In a public forum, the ACP confirmed that if the total cost exceeded $6 billion, the project would not be profitable. Drohan estimates that it will cost around $10 billion. Global Insight, a consulting firm hired by the ACP, said the project would cost $7 billion and necessary toll increases would "virtually equalize the cost of going through the Panama and Suez canals."
"Eventually, world trade will need these bigger locks," says Drohan. "But if the users need bigger locks, the users should pay for them. Even the U.S. did not want to take this risk alone in 1993, so why should a poor and small country like Panama?"
Drohan counters the government proposal with a user-backed proposal calling on nations like the United States, China, and Japan to form a consortium to finance the project, thus spreading the risk.
The International Monetary Fund has also questioned the financing of the canal expansion. In its latest annual report, the fund notes: "There is no firm evidence at this stage to judge whether markets would be willing to finance the [canal project] without an explicit government guarantee."
The IMF further said the ACP does not qualify as an autonomous commercially run entity. The ACP rejected that contention, insisting that under Panama's constitution its finances are managed autonomously.
Referendum
Polls suggest that the public was for the project but also show that support has been shrinking. Still, the best guess is that the proposal will pass.
"I support the project because of the benefits it will bring directly" and "subsequent investments that it is likely to bring," said Robert Raymer, former U.S. consul in Panama, who now works as a consultant for the Panamanian government on foreign policy.
"I have always thought that Panama could do better for itself and its people, and believe that greater world exposure and presence can have a positive effect on [Panama's] income disparities."
Some people in Texas believe an improvement to any transportation system is nothing but a government land grab. Can you image all the poor people living along the shore of the existing canal that will be displaced.
Why not starve the goose that lays the golden eggs? To feed the poor, of course?
---> A man, a plan, a canal, Panama <---
step on no pets
While Panama needs a third locks, I will not agree to it under this crooked government.
One of a couple of outstanding reasons (though there are many) why a NO vote should be cast…and I am not an environmentalist wacko:
Gatun Lake is a fresh water lake. It provides water to the locks and drinking water to a large portion of the human population. It will eventually become saline. More, it will kill everything around it and in it. This will include all animal life dependent on fresh water and a loss of marine and plant life. The Government of Panama has never addressed this issue on purpose.
The Panamanian Government has never, ever had a successful large project. They don’t go from A to Z. They start with J, then go to P, then go to L, etc. You get the picture. Everything they do in a large project is always a disaster.
The reason the Canal today thus far works is because we Americans…meaning traitor Carter and our crooked, traitor congress…gave it to the crooks in Panama, a canal already built and functioning.
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