Shippers are asking the Panama Canal to revise its toll hike. Meanwhile, the expansion cost may be higher than anticipated.
BY CHRONICLE STAFF
Panama is now facing growing pressure over its plans to expand the Panama Canal, one of the key transit routes for world commerce.
Shippers are complaining over plans to hike tolls to pay for a $5.2 billion expansion. And some economists are raising concerns about the potential debt burden for Panama.
The expansion is supported by shipping lines, who say it is necessary to enable the canal to handle ever-growing trade between the United States and China, the two top users of the canal. Also countries like Chile, the fourth-largest user, support the expansion.
“The expansion of the canal…will, undoubtedly, be the largest infrastructure project in the region,” Chilean President Michelle Bachelet said during a visit to Panama last week. “The expansion…as well as other large-scope investment projects underway in Panama, represent…an unbeatable opportunity to boost commercial and investment relations between our countries through public bids for engineering and construction firms from both countries.”
Meanwhile, Panamas President Martin Torrijos was named Person of the Year by the American Association of Port Authorities (AAPA) for spearheading the canal expansion. "The actions developed during President Torrijos’ administration have deep significance for the Panamanians as well as for the international maritime industry," Agustin Diaz, managing director of the Curaçao Ports Authority and chairman of AAPA’s Latin American Delegation, said in a statement.
The Panama Canal Authority (ACP), the agency that runs the 50-mile (80km) waterway, announced last month that it planned to increase tolls by 3.5 percent over a 20-year period, starting May next year. However, the shipping industry has harshly criticized the plans and argue that they in effect mean a 26 to 34 percent increase over the next three years.