Canal Upgrade Plan Approved

By Will Weissert
Associated Press
Monday, October 23, 2006

PANAMA CITY, Oct. 22 -- Voters overwhelmingly approved the largest modernization plan in the 92-year history of the Panama Canal on Sunday, backing a multibillion-dollar expansion that will allow the world's largest ships to pass through the shortcut between the seas.

About 78 percent of voters favored the expansion, with ballots from 90 percent of polling stations counted by the country's electoral tribunal. Nearly 22 percent opposed the plan. There were not enough uncounted ballots left to reverse the outcome. Early returns pointed to a low turnout, with nearly 57 percent of the country's more than 2.1 million voters abstaining.

Thousands of supporters in green "Yes" T-shirts cast ballots endorsing the $5 billion overhaul, which would allow the canal to handle modern container ships, cruise ships and tankers that are too large for its current 110-foot-wide locks. The plan is to build two sets of new locks between Panama's Atlantic and Pacific coasts by 2015.

The Panama Canal Authority, the autonomous government agency that runs the canal, says the project will double capacity of a waterway on pace to generate about $1.4 billion this year.

The expansion will be paid for with higher tolls and is projected to produce more than $6 billion in annual revenue by 2025.

"Voting no is like closing the door on the canal. It's the top source of income for Panama, and improving it means more money for the government and less poverty," said Leonardo Aspira, a boat salesman who sported a "Yes" shirt and baseball hat in Kuna Nega, a largely Indian town of dirt roads and banana trees outside Panama City.

The canal employs about 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 more than a third of the country lives below the poverty line.

Critics contend that the expansion will benefit the canal's customers more than Panamanians and say they fear it will stoke corruption and uncontrolled debt if costs balloon.

"The expansion is necessary, but we all have to watch closely, make sure there isn't embezzlement and corruption," said Igor Meneses, a 34-year-old advertising executive who was waiting to vote in Panama City. "With that kind of money, there's a lot to steal."

President Martin Torrijos, a supporter of expansion, called the referendum "probably the most important decision of this generation."

Opponents of the expansion plan complained about electoral foul play.

On the sweltering streets of Panama City, some wore red shirts and smocks to show they favored a no vote. But they were far outnumbered by those in shirts, bandanas, caps and vests expressing support for expansion.

Albert R. Ramdin, assistant secretary general for the Washington-based Organization of American States, led a mission of 50 observers.

He said that voting had been orderly but that "generally I believe most people say that this turnout is a bit lower than they had seen before in general elections."

The United States owned and operated the canal from 1914 to 1999. Torrijos's father, Gen. Omar Torrijos, who was then the country's leader, signed a treaty in 1977 with President Jimmy Carter to give control of the waterway to Panama, a decision that also was approved by Panamanians in a referendum.


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