Panamanian President Authorizes Canal Widening Referendum

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President Martin Torrijos signed a bill authorizing a referendum on widening the Panama Canal, and said that undertaking the biggest modification to the waterway since it opened in 1914 is vital to the Central American nation's future.

The measure signed Monday means Panamanians will vote Oct. 22 on whether to approve a US$5.3 billion (euro4.2 billion) project that would add a third set of locks to reduce the long lines of ships waiting to cross the canal and allow larger vessels to pass through.

Public opinion polls indicate the measure is likely to pass.

"A canal that's highly profitable represents a key step and is necessary to overcome marginality and poverty," Torrijos said.


The measure, which will formally be published into law in the government gazette on Tuesday, calls for the vote to be held on the first Sunday that falls three months after the law took effect.

The canal, 105 feet (32 meters) above sea level at its highest point, uses a series of parallel locks to lift ships to Lake Gatun and then back down again for the 80-kilometer (50-mile) passage between the Atlantic and Pacific oceans.

The biggest ships that can pass through the canal's current, 108-foot-wide (33-meter-wide) locks are known as Panamax vessels and can carry 4,000 cargo containers. The project will allow the large "Post-Panamax" class of cargo ships to use waterway.

Opponents contend the expansion project is based on uncertain projections about maritime trade and the world economy.

Union workers and supporters have formed a group called "National Union for No," which claims the plan lacks an accompanying social development plan and solid financial resources, and will put the country in debt.

But Torrijos said Monday that the would-be expansion of the canal is "not an isolated project, but instead a component of the shared vision of national development that we have proposed."

"Only this way will we overcome problems of underdevelopment," he said.

Torrijos reaffirmed pledges to begin an aggressive government plan to stamp out poverty after the referendum. Nearly 40 percent of Panamanians live below the poverty line.

Officials have said they would pay for the canal upgrades through loans and toll increases for ships using the canal.

Panama took over the administration of the waterway on Dec. 31, 1999, when the U.S. military presence in Panama ended. The United States is the main user of the canal, followed by South American countries, Japan and China.

The canal generated US$1.2 billion (euro950 million) last year, when 14,000 vessels paid tolls for the right to churn through. Panamanian officials say its 2006 earnings should be even higher.