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Voters overwhelmingly approve Panama Canal expansion plan in referendum
PANAMA CITY, Panama Voters overwhelmingly approved the largest modernization plan in the 92-year history of the Panama Canal, backing a $5.25 billion (€4.15 billion) expansion that will allow the world's largest ships to squeeze through the shortcut between the seas.
In a referendum marked by low turnout Sunday, Panamanians approved an overhaul that will build a third set of locks on the canal's Atlantic and Pacific sides to handle modern container ships, cruise liners and tankers that are too large for the waterway's current 33-meter-wide (108-foot-wide) dimensions. Construction is set to begin in 2007 and will take up to eight years to complete.
The Panama Canal Authority, the autonomous government agency that runs the waterway, says the project will double capacity of canal already on pace to generate about US$1.4 billion (€1.11 billion) in revenue this year. Expansion will be paid for by increasing tolls to produce annual revenue of over US$6 billion (€4.8 billion) by 2025.
"We are going to serve the world better and that means we are going to serve Panama better," canal administrator Alberto Aleman Zubieta, with little voice left from celebrating, told The Associated Press. "Everyone's a winner. The shipping industry, the Panamanians and all of the countries that will benefit from international shipping commerce."
ThePanamaConnection Editorial Comment:
The project will result in over 40,000 additional jobs in Panama over 8 years and will cost over $5.4 Billion.
A successful expansion project would roughly double the present capacity of the canal of 330 million tons of vessels per year. In particular, it would allow wider, so-called post-Panamax vessels to pass through the canal. Revenue from canal shipping tolls currently contributes 10% to the GDP of Panama. Doubling the capacity is therfore expected to have a large positive impact on the Panamanian economy.
Real Estate developers are expected to increase prices of current inventory by as much as 20% once the vote passes, as demand for quality housing, especially in Panama City, increases significantly as a result of the canal expansion project.
Source:
International Herald Tribune: October 11, 2006
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