Major expansion project for Panama Canal up for nationwide vote

Sunday, October 22nd 2006, 11:29 am

By: News On 6

PANAMA CITY, Panama (AP) _ The largest modernization project in the 92-year-history of the Panama Canal was up for a nationwide referendum on Sunday, with polls indicating overwhelming support for the $5.25 billion plan to expand the waterway for larger ships.

President Martin Torrijos' government has billed the referendum as a historic facelift that will double the capacity of a canal already on pace to generate about $1.4 billion in revenue this year.

``If you've got a business, you've got to do what you can to improve it, make it more competitive,'' Faustino Ortega, a 41-year-old mechanic who favors the expansion, said while standing in line to vote. ``The canal is big business for all of Panama. Widening it will help the economy.''

Critics claim the expansion will benefit the canal's customers more than Panamanians, and worry that costs could balloon for this debt-ridden country.

The project would build a third set of locks on the Pacific and Atlantic ends of the canal by 2015, allowing it to handle modern container ships, cruise liners and tankers too large for its current 108-foot-wide locks.

The Panama Canal Authority, the autonomous government agency that runs the canal, says the project will be paid for by increasing tolls and will generate $6 billion in revenue by 2025.

Polls indicate the plan will be approved overwhelmingly. Green and white signs plastered across the country read ``Yes for our children,'' while tens of thousands of billboards and bumper stickers trumpet new jobs.

``It will mean more boats and that means more jobs,'' said Damasco Polanco, 50, who was herding cows on horseback in Nuevo Provedencia, on the banks of Lake Gatun, a 160-square-mile man-made reservoir that supplies water to the canal.

The canal employs 8,000 workers and the expansion is expected to generate as many as 40,000 new jobs. Unemployment in Panama is 9.5 percent, and 40 percent of the country lives in poverty.

In Kuna Nega, a town of dirt roads, jagged hills and banana trees on the outskirts of Panama City, boat salesman Leonardo Aspria sported a ``Yes'' shirt and baseball cap.

``Voting 'no' is like closing the door on the canal. It's the top source of income for Panama and improving it means more money for the government and less poverty,'' he said.

Critics fear that the expansion could cost nearly double the current estimate and stoke corruption and uncontrolled debt.

This was on Igor Meneses' mind as he waited to vote.

``The expansion is necessary, but we all have to watch closely, make sure there isn't embezzlement and corruption,'' said the 34-year-old advertising executive. ``With that kind of money there's a lot to steal.''

The United States arranged for Panamanian independence from Colombia to build the canal, and ran it from 1914 to 1999. Torrijos' father, strongman Omar Torrijos, signed a treaty with President Carter in 1977 to cede control of the waterway back to Panama, a decision that also was approved by Panamanians in a referendum.

Canal administrator Alberto Aleman Zubieta said that if the plan is defeated it could have grave consequences for Panama. ``Shippers will have to look for other routes because Panama won't have the capacity for them,'' he said.

International shipping companies have generally backed the plan as a way to create further options for the growing trade route between Asia and the East Coast of the United States.

``Boats are bigger and business needs this expansion,'' said Fernando Rivera, the Puerto Rican president-elect of the Caribbean Shipping Association.

U.S. engineers first laid the groundwork for a third set of locks in the 1930s and the expansion would require relatively little new underwater dredging. By some accounts, the original construction of the canal displaced 50,000 people. The new project will not require new man-made lakes or dams, meaning no one will lose their homes, the canal authority says.

``I live right on the water and I'm still voting yes,'' said Elena Hall, who lives near Lake Gatun. ``I wouldn't support it if I were going to lose my house.''