MercoPress. South Atlantic News Agency

Panamanians to decide in referendum Canal expansion

Panama's Congress approved a five billion US dollars plan to widen the Panama Canal which will now face a binding referendum scheduled to be held later this year.

The plan represents the biggest expansion for the Canal since it was opened in 1914 by United States.

Opinion polls show that voters in Panama are in favour of the plan, but critics say the completed project will still not meet shipping needs.

The 80km Panama Canal, which was controlled by the United States until 1999, handles nearly 5% of global trade and is mainly used by the US, Japan, China and Chile.

At present it can only handle ships carrying up 4,000 containers, known as Panamax vessels but with wider locks and deeper and wider access canals it could take ships carrying up to 10,000 containers. Anyhow those ships that can sail across the canal sometimes have to queue for hours.

The current locks are 33 metres wide, but the new locks would be 50 metres. A third lane of traffic would be able to handle the wider loads.

The Panamanian government says the cost of the upgrades would be half met with increased tolls and the other half with loans from multilateral institutions and private banks.

But opponents say that when the work is finished in 2014-15, the canal will still be inadequate. An alternative plan of new terminals at the Pacific and Atlantic ends of the canal to handle containers in transit is proposed.