Panama Canal opens USD5b locks, bullish despite shipping woes

Fireworks exploded as a huge container ship made the inaugural passage through the newly expanded Panama Canal yesterday [Macau time], formally launching the Central American nation’s multibillion-dollar bet on a bright economic future despite tough times for global shipping.
The Chinese-owned Cosco Shipping Panama went through the Atlantic locks at Agua Clara in the early morning, sailed the 80-kilometer passage to the Cocoli locks near the capital and passed into the Pacific in the evening, stewarded by tugboats and cheered by dignitaries and exuberant crowds of thousands.
The USD5.25 billion project went online nearly two years late after construction delays, labor strife and apparent cost overruns, but officials were still bullish and in a celebratory mood as they declared the expanded canal open for business.
“This is an achievement that all of us Panamanians should be proud of,” President Juan Carlos Varela said at the inaugural ceremony on the outskirts of Panama City. “Today marks a historic moment for Panama, for our hemisphere and the world.”
“This new transit route is the tip of the iceberg in making Panama once again the logistics center of the Americas,” canal administrator Jorge Luis Quijano said. “And it represents a significant opportunity for the countries of the region to improve their infrastructure, increase their exports.”
Crowds that began gathering before dawn lined both sides of the canal waving flags, partying to salsa music and watching videos on giant screens. Authorities said about 30,000 people and eight foreign heads of state were attending.
“It’s a one-time experience, a great achievement,” said Felicia Penuela, a homemaker from Colon province. “Panama is showing the world that even though it is a small country it can do great things.”
The Cosco Shipping Panama is a 48.2 meters, 300 meters behemoth that is one of the modern New Panamax class of mega-vessels that are seen as the future of global shipping and will now be able to use the canal. It carried some 9,000 cargo containers during the inaugural voyage and now heads to South Korea.
The waterway’s capacity doubles with the new locks, and canal authorities are hoping to better compete with the Suez Canal in Egypt and tap new markets such as natural gas shipments between the United States and Asia.
“The Panama Canal, with this expansion, is an important player not only for regional maritime commerce but worldwide,” said Oscar Bazan, the Panama Canal Authority’s executive vice president for planning and commercial development. “The canal is a winning bet.”
Authorities said said that 85 percent of the 166 reserved crossings scheduled for the next three months are for container ships. Container cargo accounts for nearly 50 percent of the canal’s overall income.
Panamanians at the ceremony expressed hope that the expansion will help the economy in a country where about 25 percent of the people live in poverty, something that Varela echoed in his remarks.
However, the party comes amid a lull in global shipping due to the drop in oil prices, an economic slowdown in China, which is the canal’s second-­largest customer, and other factors that have hit the waterway’s traffic and income. AP