Panama whips the curtain aside on newly expanded canal

Panama City : After nine years of massive work, a renovated and expanded Panama Canal is set to be unveiled on Sunday, ready to take on much bigger cargo ships with hopes of boosting the waterway’s business.

A dozen foreign leaders, including the presidents of Taiwan and Chile, will be on hand to see a giant Chinese freighter, baptized COSCO Shipping Panama for the occasion, become the first to officially use the broadened canal.

From that point on, the channel opened 102 years ago with American engineering will be able to accommodate ships carrying as many as 14,000 containers -- nearly three times the amount hauled through the canal by vessels up to now.

That means big ships that use Egypt’s Suez Canal as a shortcut between Asia and America will now fit through Panama’s link between the Atlantic and Pacific oceans.

Panama hopes it will double the volume of goods passing through the canal over the next decade, up from 300 million tonnes currently, and boost revenue from shipping fees from the $1 billion the country collects now.

Filip for trade 

The canal already accounts for five percent of the world’s maritime commercial traffic. The United States and China are its two biggest customers.

“With the expanded canal, tax revenues will rise, which will also boost other sectors of activity,” predicted Nicolas Ardito Barletta, a former Panamanian president and former vice president of the World Bank in Latin America.

The canal and ancillary logistic and banking activities represent 45pc of the country’s gross domestic product, he says.

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 big 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.

“The inauguration of the expanded Panama Canal means new opportunities for international trade and, for Panama, bolstering its competitive advantages like in logistics,” Panama’s president, Juan Carlos Varela, said.