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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.

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.

In fact, a host of questions will be debated in the National Assembly, in cantinas and at dinner tables until Panamanians are asked to vote on the matter in a referendum expected next year: How big is big enough to remain the most cost-effective route for interoceanic shippers? How much will it cost in dollars, environmental destruction and human displacement? Can and should tiny Panama take on the financing burden of a mega-project to benefit international markets?

"The driver for all of these projects -- the foremost driver -- is that it has to bring direct benefits to the country of Panama. If it doesn't, it's not going to happen," asserted Alberto Aleman Zubieta, administrator of the Canal Authority, the state-owned corporation that has run the waterway since the U.S. handover of the canal in 1999.

While the question of whether expansion is good for Panama may be central to voters, political and economic leaders are mindful of the canal's importance to global commerce.

"Who's to stop the times?" Deputy Commerce Minister Romel Adames said of contemporary shipping's demands. "The canal is a very old piece of infrastructure; it's 100-year-old technology. We need to bring it up to the needs of another century. With this we can prosper for another 100 years."

The canal functions as efficiently today as when it opened in 1914 -- the same electro-mechanical works control the original 690-ton steel lock gates that were forged in Pittsburgh.

But the shipping industry is changing.

"Since 1998 we've been told by our customers that 'we aren't going to fit our ships to you, you have to accommodate us,' " said Dinnick Salerno, a dredge engineer on an interim maintenance project that is deepening the channel by 2 feet and widening the cut's curves to allow simultaneous two-way traffic.

Culebra Cut is usually limited to access from the Pacific side in the morning and the Caribbean entrance in the afternoon to prevent collisions in the channel that, despite its new 630-foot width, is vulnerable to winds.

Those revisions are baby steps in modernization.

Container shipping, which accounts for the biggest and fastest-growing sector of canal business, is moving to larger ships, called post-Panamax vessels because they are too wide and draw too much water to pass through the canal.

When the canal opened, every ship then afloat could fit through its locks and shallowest sections. Today, the jungle passage can still accommodate 92% of the world's ships, but that figure will shrink over the next decade as shipping giants like Maersk Sealand and China Ocean Shipping Co. replace canal-size ships with post-Panamax vessels.

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