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Panama Feels Squeeze Over Canal Expansion

Enlarging the channel is needed to accommodate newer ships, but the tiny country faces big cost and environment issues.

June 06, 2004|Carol J. Williams, Times Staff Writer

CULEBRA CUT, Panama — When President Theodore Roosevelt directed an army of engineers and Caribbean laborers to build the engineering masterpiece known as the Panama Canal, inhabitants of the isthmus weren't consulted.

Now, after 90 years of serving as home to the maritime industry's favorite pathway, Panama alone will decide whether to expand its man-made wonder to meet the demands of 21st-century shipping -- an undertaking as momentous as the original excavation that linked two oceans and transformed world trade and travel.


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A master plan for widening and deepening the slender channel and building bigger locks is due at the end of June, and the compilation of $30 million worth of engineering, economic and environmental studies will be debated for the rest of the year. But the deliberations are likely to focus more on how to expand the canal than on whether it should be done. Pro-expansion sentiment appears to prevail in this nation of 2.8 million people, inspired by the promise of tens of thousands of construction jobs that would greatly ease an unemployment rate of 14%.

From the teak-lined offices of the Canal Administration Building in Panama City to the 19th-century slums of Colon, there is enthusiasm for the colossal undertaking and confidence that modern technology will allow expansion with a minimum of environmental perils.

There are, however, worries. Rare birds turn languidly over the verdant jungle and turtles paddle through the grassy shallows of Gatun Lake, gifts of nature that environmentalists have warned could be at risk if the nation opts to flood additional territory to collect more water for moving more and bigger ships. Some proposals also envision displacing as many as 9,000 people, mostly indigenous groups who were relocated in the 1970s to allow construction of the Bayano dam and hydroelectric project, to make way for new reservoirs.

Also of concern is the expected cost of the envisioned construction, estimated at as much as $5 billion. Panamanians, already carrying $9 billion in debt from decades of populist spending, are being urged by the fiscally conservative to avoid mortgaging the country's future for a short-term job boom. Some studies project that it would take at least 20 years to generate enough extra toll revenue to recoup the cost of expansion.

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