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One of Alemán's more lucrative changes was creating different cargo classes for toll charges (container, tanker, passenger, etc.), which has had the dual effect of augmenting revenues while presenting users with a fairer fee structure. The new authority also designed a more efficient transit-reservation system: a canal passage that often entailed a wait of several days at the canal's entrance a decade ago takes less than a day now, increasing throughput.
Still, the biggest problem is traffic jams: more than 14,000 ships transit the canal each year, stretching its outdated capacity. And a growing share of that freight can't cross Panama at all. By 2010, the number of post-Panamax vessels in the global commercial fleet is expected to jump 74%, to about 700, and by 2011, they will probably account for half the world's oceangoing commercial-cargo capacity, according to the World Shipping Council in Washington. The expansion design, approved by Panama's Congress last spring, would dig a new approach channel about five miles long just east of the existing Gatun locks at the Atlantic entrance, and a similar one just west of the Miraflores locks on the Pacific side. Each new channel would hold three-step locks 180 ft. wide, compared with 110 ft. for the existing locks, and they would have massive water-recycling basins, which preclude the need to dig new reservoirs, which many had feared would displace thousands of farms and homes. The project would create as many as 7,000 direct jobs and more than 40,000 indirect jobs at home. Companies such as Bechtel, ABB and the French contractor Bouygues are expected to bid for the project.
Toll increases would pay the expansion's $5.25 billion projected cost, about half of which would be financed by international banks. Alemán estimates the increased traffic could raise the canal's annual income to as much as $5 billion by 2025.
But many Panamanians feel Torrijos and the project's backers are "looking through rose-colored glasses," says Fernando Manfredo, the canal's former deputy administrator and a leader of the anti-expansion campaign. Among their fears: increasing Panama's already sizable foreign debt, now more than $10 billion, or about 60% of GDP; other credible estimates indicate the expansion's cost would be closer to $8 billion; and uncertainties, like a possible downturn in Asia's economies, which could deflate the promised benefits. "Our big concern," says Manfredo, "is whether we'll really recuperate what we're going to throw into this."
Torrijos insists they will. Thanks to its unique location, "Panama was born globalized," he says, "born to do projects like this." Alas, piracy is also a part of Panama's colorful history--and many of its politicians still bring that tradition to projects like this, which is why Torrijos has begun long overdue anticorruption measures like contract-bidding reforms. He knows that even if voters endorse the expansion, it's likely to be judged less by how well it digs supersize ships into the canal than by how well it digs Panama out of its Third World troubles.