Panama voters back canal expansion
Panamanians voted in favor of a massive expansion of the Panama Canal in a national referendum Sunday. As of Sunday evening, an estimated 78 percent backed the expansion, a required step for the $5.25 billion project.
About 43 percent of eligible voters turned out for the referendum, which Martin Torrijos, Panama’s president reportedly called “the most important decision that this generation is called upon to make” after casting his vote.
Expansion will build a new lane of traffic along the canal through the construction of a new set of locks, which will double capacity and allow more traffic and wider ships. The canal is nearing maximum capacity and needs to grow with demand, the Panama Canal Authority said in a statement.
The largest containerships using the canal today have a capacity of about 4,500 TEUs. The new locks will allow ships carrying 12,000s TEU to use the waterway.
That will benefit shippers moving cargo in the booming trade from the Far East to the United States, since the largest containerships today can only call ports on the U.S. West Coast or must sail westward through the Suez Canal to reach ports on the U.S. East Coast or Gulf Coast.
The expansion will be funded by canal customers through a system of graduated toll increases.
“Today, Panamanians made history,” said Ricaurte V'squez Morales, chairman of the PCA’s board of directors and concurrent minister for Canal affairs, in a statement. “We are honored by their trust and humbled by the responsibility in front of us. We spent years studying, researching and preparing and we are ready. This project will be done efficiently and transparently. With this vote, the canal will be able to grow with demand, improve service, spur economic growth in Panama and maintain the Canal’s competitive advantage.”
The PCA first brought expansion plans to the Panamanian government in April.
Construction on the waterway is expected to begin by early next year and be completed in 2014, a century after the original canal opened. The expansion will be paid for with increases in tolls.
The Panama Canal Authority took control of the canal from the United States in 1999. The authority is financially independent from the Panamanian government, and expansion will be funded with tolls and authority bonds, not debt guaranteed by the government.