The future of the world’s main shipping route will be determined Sunday, when Panama Canal expansion plan will be voted on in a national referendum.
Nearly two million Panamanians will go to the polls October 22nd to vote on the proposal. In order to ensure good voter turn-out, the ley seca, or dry law, will come into effect on Saturday October 21st at noon, ending the following Monday at noon.
This means no alcohol can be sold or consumed while the prohibition is in effect, including bars, restaurants, casinos and clubs.
Earlier polls suggest the $5.2 billion expansion plan will be overwhelmingly approved, which would see the 92-year old canal widened and deepened to accommodate larger, increased traffic.
The prospect of the overhaul has created a sharp spike in the local economy, with developers moving quickly in anticipation of the influx of foreign professionals the massive construction project would draw.
Donald Trump recently announced the construction of a 65-storey hotel and condominium complex in Panama City. The $220 million Trump Ocean Club International Hotel and Tower , including a private beach, marina and casino, is expected to be completed in 2009.
Modernization of the canal will create about 7,000 direct jobs and a further 40,000 indirect jobs to stimulate the local economy.
The Panama Canal Authority (ACP), the autonomous government body which took over the management of the canal when the US relinquished control in 1999, says most of the expansion costs would be generated through higher toll fees without affecting current traffic.
“During the construction process, no current lanes will be closed, and since all construction sites are outside of existing channels and operating areas, the ACP is confident that there will be no delays of transits,” assured the ACP in a statement.
Both the US and Singapore, which depend heavily on the canal’s current traffic, have expressed their full support of the expansion plan, and the US has announced it will spend $30,000 for an inter-American mission to observe the vote proceedings.
The recent boom in Asian economies like China and India has increased trade shipments, and the canal in its current condition is not expected to meet worldwide demands much longer.
In fact, traffic between the US east coast and Asia represents 40 per cent of shipping across the canal, which handles an estimated five per cent of all world trade.
Already operating at near-full capacity, the canal is also too narrow to accommodate the newer, wider shipping vessels like the bulk carriers, liquefied natural gas carriers, and oil tankers – which are a fast-growing and profitable segment of the shipping industry.
The expansion plan will add a third shipping lane alongside the existing channels with ample room for the bigger carriers, doubling the current shipping capacity.
Construction on the canal was originally begun in 1880 by the French under Ferdinand de Lesseps, and taken over by the United States under Theodore Roosevelt in 1904.
Considered one of the world’s most difficult engineering feats, it was formally opened in 1914, and has had an enormous impact on world trade by shortening the travel between the Atlantic and Pacific oceans.
The United States relinquished control of the canal to the Panamanian government in 1999.
Further reading :
Panama Canal Authority (Available in English and Spanish)
Latin Business Chronicle :
Panama Bulletin : Series of articles on the Panama Canal