100 years later, Canal to make history again

By Juan José Rodríguez | AFP

PANAMA CITY – The Panama Canal is set to revolutionize world trade yet again, this time in 2015, when it will open transit to Post-Panamax and Super-Panamax ships with nearly triple the cargo size of previous cargo vessels. The multi-billion-dollar expansion of the canal will change history, as it did when it was inaugurated 98 years ago. Today, some 5 percent of the world’s commerce passes through the canal.

“We are going to make history as the country that revolutionized maritime industry,” Panama’s President Ricardo Martinelli said Monday, during a visit to the mammoth canal expansion site, expected to cost $5.25 billion when finished. The project started in 2007.

 “[The canal] is going to be of great value not only for Panama, but also for all the world’s residents,” Martinelli said.

Since it’s opening in 1914, more than a million ships have used the interoceanic route, avoiding a 14,000 kilometer journey around Cape Horn – the southernmost headland in South America – thanks to the engineering marvel, which elevates ships 27 meters to allow them to pass over the continental divide.

“The influence of the Panama Canal expansion will be felt in various market segments, which will generate economies of scale in maritime transport” 

 –Panama Canal Administrator Alberto Alemán

Eventually the canal was too small to accommodate larger Post-Panamax and Super-Panamax ships, and it needed to be expanded. The new ships span more than 400 meters in length and 50 meters in width, the equivalent of four soccer fields.

These larger ships can transport 12,000 containers, nearly triple the size of the largest ships that traverse the canal today. They represent 30 percent of the world’s current cargo fleet, and that number is increasing.

“The influence of the Panama Canal expansion will be felt in various market segments, which will generate economies of scale in maritime transport,” Canal Administrator Alberto Alemán said.

“Those segments include grains, iron and coal. Plus, vessels can triple their capacity through the new locks,” he added.

At a cost of $3.2 billion, the new locks – which act like elevators for ships – are a centerpiece of the expansion. When finished, the waterway’s annual capacity will be double, from 300 million tons to 600 million tons.

Panama Canal 2

Construction of new locks moves forward. An expanded canal will be inaugurated in 2015 at a cost of more than $5.25 billion. José Rodríguez | AFPs

The plan also includes raising the level of Gatún Lake, widening access channels and deepening the canal itself at a section known as “Corte Culebra,” or Gaillard Cut, a 13-kilometer artificial valley cut through the continental divide.

Coinciding with the canal’s expansion, U.S. ports in the Gulf of Mexico and along the eastern coast are adapting to receive the giant ships.

The United States is the canal’s principal client, transporting 144 million tons through the canal in the last year, followed by China (53 million tons), Chile (28 million) and Japan (22 million).

The expansion project has suffered setbacks – its inauguration will be delayed six months due to a dispute with contractor UPC, a Spanish, Italian, Belgian and Panamanian consortium, over quality of cement used to build the new locks. UPC said the modification could cost an additional $573 million.

The U.S. built the canal after Panama’s independence from Colombia in 1903, a move orchestrated in Washington, D.C.

“To build the Panama Canal, a plot was devised to promote Panama’s independence. So, the creation of the Republic of Panama was linked to construction of the canal,” historian Luis Navas told AFP.

Panama finally took control of the canal from the U.S. at noon on Dec. 31, 1999, in compliance with an agreement signed in 1977 by Panamanian de facto leader Omar Torrijos (1986-1981) and U.S. President Jimmy Carter (1977-1981).

During the presidency of Martín Torrijos (2004-2009), son of Omar Torrijos, the decision was made to expand the canal to guarantee its viability for another century.

Since Panama took control of the canal, the country’s treasury has received more than $6.1 billion in revenue. But many complain that the descendants of the thousands of people who lost their lives during the canal’s construction – mostly Afro-Antilleans – do not share in the benefits.

Said sociologist Gerardo Maloney: “The role that workers played, as well as their descendants, has not been taken into consideration, even today,” and many continue living in poverty, despite the millions of dollars generated by the canal they helped build.