Sea Transportation: Fixing the Panama Bottleneck


January 14, 2006: Under discussion for decades, the project for the expansion of the Panama Canal appears to have finally begun to gain momentum. When the Panamanians assumed control of the canal at the end of 1999 there were widespread predictions that they would prove incapable of managing it effectively and that it would soon fall into serous disrepair. In fact, quite the contrary has occurred. Since taking control the Panamanians have demonstrated their ability to manage the canal quite efficiently, and have not only maintained a profit but have been investing heavily in modernization of the nearly 90 near old facility. But even the best management and maintenance cannot avert the ultimate obsolescence of the canal.

The maximum capacity of the canal is estimated to be about 47 transits per day, for a total of about 17,000 a year. Given current trends in usage, these figures will be reached in about six years. Thereafter, each year more and more ships will have to be turned away. Worse, more and more ships are being built that are larger than the canal standard ("Panamax"), which limits vessels to under a thousand feet in length and under 110 in width. Something like a quarter of all ocean going vessels today already can't fit the canal, and that includes all 12 of Uncle Sam's aircraft carriers.

The Canal Authority and the government of Panama have for several yeas been working on plans to expand the canal. The project faces numerous ecological, technological, financial obstacles. The canal uses fresh water from Gatun Lake to raise and lower ships in the locks. This water is currently "wasted" during operations, that is, it flows into the sea. Gatun Lake cannot hold sufficient water to meet the needs of an expanded canal, nor is there enough rainfall in Panama to support one. So complex recycling mechanisms will have to be developed. These will cost money.

Expansion plans include

@ Two new sets of locks, 1400 feet long, 160 feet wide, and 50 feet deep

@ A water recycling system that minimizes fresh water wastage, but will require some expansion of current reservoir facilities

@ A major new port on the Pacific side, for the management of containers and bulk cargo, to be constructed from the spoil produced by the evacuation of the new locks

The estimated cost of all this work may be as high as $8 billion, but it is expected that this can be paid for out of increased revenues without seriously affecting the flow of money to the Panamanian government. Panamanian voters will be asked to approve the project later this year. The principal objections have been from landowners fearing expropriation to provide land for the canal, the local Green movement, concerned about the impact of the enormous project on the local environment, and nationalists, who fear that the financing may end up being provided by foreign institutions. The U.S. has a major interest in an expanded canal, as it will accommodate the Navy's current fleet of aircraft carriers, as well as any foreseeable future one well into mid-century.


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