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Last Updated: Monday, 23 October 2006, 08:06 GMT 09:06 UK
Q&A: Panama Canal expansion
"No" campaigners in front of a "Yes" poster in Panama City
"No" supporters face a well-funded pro-expansion campaign
In a referendum on Sunday, voters in Panama overwhelmingly endorsed an ambitious project to expand the famous shipping canal.

The Panamanian government had urged people to vote in favour of the proposal to build a third set of locks.

Why does the government say it is necessary to expand the Panama Canal?
The current lock system is too small for modern tankers and the biggest cargo vessels. Ships passing through face long waits. The government argues that the project will bring a much-needed boost to the economy, providing thousands of new jobs.

What does the government propose to build?
Two locks complexes, one on the Atlantic and one in the Pacific Ocean. Access channels will be excavated and the existing navigational channels will be widened and deepened.

How will that help?
It will apparently increase capacity. Ships with 12,000 containers will be able to pass through. The present limit is of about 4,000 containers.

What are the costs?
The government estimates costs of $5.2bn. The opponents of the canal expansion think they will much higher.

How is it going to be financed?
The government says the project will be financed by an increase in the tolls ($2.9bn) and foreign credit ($2.3bn).

Who campaigned in favour?
The government, three of the main political parties and the business community.

Who argued against the expansion?
Mainly the National Front for the Defence of Economic and Social Rights (Frendeso in Spanish), an umbrella organisation of trade unions and leftist groups. Two opposition parties are campaigned for the no vote.

Two tug boats in the Panama Canal
The US withdrew from operating the canal in 1999

They say the country will get into huge debts. They fear only "corrupted elites" will benefit from the expected influx of money. They also think that there will be damage to the environment.

When will work start? The upgrade will start on March 2007. It is due to finish in 2014.


Panama to vote on expanded canal
22 Oct 06 |  Americas
Panama Canal referendum: Your views
20 Oct 06 |  Have Your Say
Nicaragua plans rival canal route
04 Oct 06 |  Americas
Country profile: Panama
06 Jan 06 |  Country profiles


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