Panama Feels Squeeze Over Canal 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.