Newly ex­panded Panama Canal opens for big­ger busi­ness

Pakistan Observer - - INTERNATIONAL -

PANAMA City—Panama is pre­par­ing to of­fi­cially open its canal this week­end to far big­ger cargo ships af­ter nearly a decade of ex­pan­sion work aimed at boost­ing tran­sit rev­enues and global trade.

On Sun­day, a VIP cer­e­mony will be held on the banks of the canal to in­au­gu­rate the com­ple­tion of the works.

Pres­i­dent Juan Car­los Varela will un­veil the new locks and third ship­ping lane built into the 102-year-old canal. For­eign dig­ni­taries, in­clud­ing the pres­i­dents of Tai­wan, Chile and other Cen­tral Amer­i­can na­tions, will be present at the cer­e­mony. A Chi­ne­se­owned Neopana­max-class cargo ship will be the first ves­sel to of­fi­cially test the new in­fras­truc­ture, en­ter­ing from the At­lantic and ex­it­ing into the Pa­cific a few hours later.

The Neopana­max ves­sels are much big­ger than the Pana­max-class ships that pre­vi­ously were the largest able to pass through the 80-kilo­me­ter (50-mile) long canal. Each is able to haul three times as much cargo as the smaller pre­de­ces­sors.

The ex­pan­sion work be­gan in 2007 and was meant to have been com­pleted in 2014, but it ran well past dead­line, and over bud­get.

The ex­pan­sion is es­ti­mated to have cost $5.5 bil­lion. How­ever, out­stand­ing dis­putes be­tween the Span­ish- and Ital­ian­led con­sor­tium that car­ried out the work and the Pana­ma­nian govern­ment could yet hike that fig­ure by hundreds of mil­lions more.

Panama, the un­veil­ing of the broader canal is a mo­ment of pride and of op­por­tu­nity.

Now, ships as long as the Eif­fel Tower is tall, and as broad as Olympic-sized swim­ming pools, will be able to use the canal.

An­nual cargo vol­umes should dou­ble over the next decade, lead­ing Panama to hope to triple the $1 bil­lion in ship­ping fees it re­ceives each year.

Also, with the coun­try these days linked to the “Panama Papers” scan­dal of off­shore busi­nesses owned by the world’s wealthy and in­flu­en­tial, the ex­panded canal is seen as a chance to bur­nish the coun­try’s tar­nished im­age.

This will show the “real face of Panama,” Panama Canal Au­thor­ity (ACP) chief Jorge Qui­jano told AFP in an in­ter­view this week.

World trade should also ben­e­fit from what will es­sen­tially be an in­ter-oceanic high­way for goods be­tween the United States and Asia. More cargo on big­ger ships should mean lower trans­port costs.

Panama is also avidly eye­ing the lu­cra­tive mar­ket of trans­port­ing liq­ue­fied nat­u­ral gas be­tween the United States and Asia, prin­ci­pally to Ja­pan.

The ships car­ry­ing the gas were too big to use the old canal. With the ex­pan­sion, they now can.

“When we started this ex­pan­sion, we did not have on our radar that the United States was go­ing to be a net ex­porter of gas and oil,” ACP deputy ad­min­is­tra­tor Manuel Ben­itez Hawkins told jour­nal­ists Saturday. Now, with the US pro­duc­ing gas and oil from shale, Amer­i­can in­ter­est in us­ing the canal has grown. “That will add to the rev­enue and help us re­coup” the mas­sive in­vest­ment, Ben­itez said.

Cur­rently, some five per­cent of global mar­itime com­mer­cial traf­fic uses the canal, which pro­vides a valu­able short­cut be­tween North Amer­ica and Asia.—AFP

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