A floating gate is opening to the Chinese COSCO container vessel named Andronikos navigating through the Agua Clara locks during the first ceremonial pass through the newly expanded Panama Canal in Agua Clara, on the outskirts of Colon City, Panama June 26, 2016. REUTERS/Carlos Jasso
By Enrique Pretel and Elida Moreno
PANAMA CITY, June 26 (Reuters) – Panama opened the long-delayed $5.4 billion expansion of its shipping canal amid cheering crowds on Sunday, despite looming economic uncertainty in the shipping industry and a heated battle over billions in cost overruns.
At 7.50 a.m. (1250 GMT), the Chinese container ship “Cosco Shipping Panama” entered the Agua Clara lock on the Atlantic to begin the first crossing of the roughly 50-mile-long (80.45-km-long) waterway and was due to emerge on the Pacific side by 5.00 p.m. (2200 GMT).
The expansion, which triples the size of ships that can travel the canal, allows the country to host 98 percent of the world’s shipping and is aimed at wresting market share from rival Suez and U.S. land routes made cheaper by low oil prices.
By 2021, the Panama Canal Authority (ACP) is hoping the project will bring in $2.1 billion per year in added revenue, representing 2.8 percent of gross domestic product.
“As a Panamanian, I am proud,” said Odalis Castillo, an 18-year-old student who attended the launch. “There will be more money to spend on social projects.”
But the ACP is enmeshed in a $3.587-billion conflict over cost overruns with Spain’s Sacyr and Italy’s Salini Impreglio, which won the project in 2009 and finished it two years late, amid construction setbacks and strikes.
It also faces challenges like the supply of fresh water needed to move the giant locks and safe handling of the huge ships.
So far 170 ships have signed up to use the canal in the next three months. If the industry perks up, the ACP already has a $17 billion plan for a fourth set of locks to lure even bigger ships that can now only travel through the Suez Canal.
Just a dozen of the 70 heads of state invited to see the debut of the third set of locks attended the ceremony but Panama’s Foreign Ministry hailed the event a diplomatic success, with representatives from nearly all the invited countries in attendance.
Analysts said the rank of those leading the delegations was affected by the Panama Papers scandal, in which millions of documents were leaked from law firm Mossack Fonseca, revealing how some of the world’s richest people use offshore companies to avoid tax and launder money.
Jill Biden, the wife of U.S. Vice-President Joe Biden, led the delegation from the United States, which finished building the canal in 1914, controlled it until 1999 and is still its biggest user. (Writing by Alexandra Alper; Editing by Sandra Maler)
(Bloomberg) — Iran’s oil production has defied years of US sanctions to return to almost full capacity — a tide of supply that looks increasingly vulnerable as tensions with Israel...
(Bloomberg) — Climate-friendly hydrogen was one of the most-hyped sectors in green energy. Now the reality of its high cost is taking its toll. In recent months, some of the...
(Bloomberg) — Canada is working with Nordic countries to create a new Arctic security coalition that would exclude Russia and offer a place to coordinate on defense, intelligence and cyber...
October 3, 2024
Total Views: 626
Why Join the gCaptain Club?
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.