Panamanians overwhelmingly backed a plan Sunday to give their famous 92-year-old canal its biggest-ever overhaul, an ambitious project the government hopes will help lift the country out of poverty.
PANAMA CITY -- Panamanians overwhelmingly backed a plan Sunday to give their famous 92-year-old canal its biggest-ever overhaul, an ambitious project the government hopes will help lift the country out of poverty.
The $5.25 billion face-lift allowing the inter-oceanic canal to handle mammoth modern cargo ships won four-to-one voter support in a referendum, the Central American nation's Electoral Tribunal said.
The project for the canal, which was U.S. territory until it was returned to Panama in 1999, will double its capacity to enable more and bigger ships to cross between the Atlantic and Pacific oceans, boosting government revenue.
Fireworks cracked over the night sky in a victory celebration and revelers drove around the capital honking their horns and waving red, white and blue Panamanian flags.
"Never in the history of the country have we Panamanians taken a decision of this magnitude," President Martin Torrijos said. "We have set the bases to build a better country."
"Behind us is the time we lost. ... Ahead is the time to overcome the shame of having a country in which 40 percent of our people live in poverty," he said in a television address.
Expansion of the canal, an engineering wonder first opened in 1914, will create a jobs bonanza for Panama's 3 million people and boost economic growth, supporters say.
Critics warned the plan could bankrupt the small nation, which is already burdened with huge debts and where most people live in poverty, if costs spiral. Taxpayers could be forced to pick up the tab and investors lose money.
But for supporters like Gilberto Valencia, a media relations expert celebrating the plan's approval, the positives outweighed the negatives.
"It is going to create jobs and help the poor," the 34-year-old said, standing beside huge loudspeakers blaring music from open vans to entice others to join the party.
LOST LIVES
Opened in 1914 at a cost of $375 million and 25,000 lives, the canal was dynamited and dug out by thousands of laborers who braved deadly malaria and yellow fever. It saves ships a long haul around South America's treacherous Cape Horn and carries around 4 percent of world maritime trade.
But its lock system is too small for many modern tankers and ships making the passage, mainly from the United States, Japan, China and Chile, also face longer waits to make the 50-mile inter-oceanic trip as global shipping grows.
France's Ferdinand de Lesseps, builder of the Suez Canal, started the Panama Canal in 1880 but abandoned it nine years later when the project went bankrupt.
The U.S. government bought the canal in 1904 and 10 years later opened the waterway. With an eye on naval supremacy and control of the Western Hemisphere, the United States ran the canal for most of the past century.
The father of President Torrijos was the populist military leader Gen. Omar Torrijos who signed treaties in 1977 with the then-U.S. President Jimmy Carter in which the United States agreed to hand over the canal to Panama in 1999.
"History will record this as the day when Panamanians made the first major decision on the Panama Canal and their future by themselves," Ricaurte Vasquez, minister for canal affairs and a former finance minister, told Reuters.
The expansion plan, due to start in 2008 and finish in 2014 will build wider locks and deeper and bigger access channels, and let ships with 12,000 containers pass through, up from around 4,000 containers at present.
The Panama Canal Authority, which runs the waterway, warns the route will become log-jammed in seven years if nothing was done, meaning business will be lost to competitors like the U.S. intermodal system of ports and cross-country rail links.
The project needs $2.3 billion in loans or bonds to be paid back with revenues from higher tolls from ships using the canal, whose upgrade will not interrupt traffic. Construction would create 7,000 direct jobs and up to 40,000 indirect jobs. (Additional reporting by Elida Moreno)
Source: Reuters
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