MercoPress. South Atlantic News Agency

Panama OKs Canal Project

Voters overwhelmingly approved the largest modernization plan in the 92-year history of the Panama Canal on Sunday, backing a multi-billion dollar expansion that will allow the world's largest ships to squeeze through the shortcut between the seas.

Thousands of supporters in green "Yes" T-shirts cast ballots endorsing the $5.25 billion overhaul which would allow the canal to handle modern container ships, cruise liners and tankers that are too large for its current 108-foot-wide locks. The plan is to build a third set of locks on the Pacific and Atlantic ends by 2015.

The Panama Canal Authority, the autonomous government agency that runs the canal, says the project will double capacity of a waterway already on pace to generate about $1.4 billion this year. Expansion will be paid for by increasing tolls and take in more than $6 billion annually in revenue by 2025

Earlier, President Martin Torrijos, who backs the plan, urged people to go and vote.

"This is a historic opportunity that we will always remember," he said. "It's perhaps the most important decision that this generation will make."

Supporters say the expansion will bring widespread benefits to the country, but opponents argue it will add to Panama's debt.

The canal employs 8,000 workers and the expansion is expected to generate as many as 40,000 construction jobs. Unemployment in Panama is 9.5 percent, and 40 percent of the country lives in poverty.

But opponents are worried about cost overruns on the massive project, and that opportunities for corruption may prove too hard to resist.

Forty ships a day - 14,000 a year - pass through the canal, about 5% of all world shipping.

The canal was completed in 1914 and, despite a series of upgrades over the past 92 years, has failed to keep pace with the growing scale of cargo ships.

Traffic has become so heavy that vessels still using the canal can face costly delays as they wait in a queue to pass through.

Nicaragua, to the north, is now planning its own canal between the Pacific and Atlantic oceans.