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Panama Canal turns 100 years old as expansion hits snags

PANAMA CITY--It was supposed to be a grand celebration of the engineering triumph that forged a nation.

Instead, the 100th anniversary of the Panama Canal's opening Friday is being marred by doubts about the country's ability to harness the full benefits of a multibillion-dollar expansion beset by cost overruns, strikes and the threat of competition from rival projects.

The latest setback in the canal's expansion came in May, when about 5,000 laborers walked off the job for two weeks as part of a strike over wages by construction workers nationwide. That followed a two-week stoppage in February in a dispute over US$1.6 billion in extra costs between the canal's administrator and the European contractor building a third new set of locks.

Because of the interruptions and overspending, the original completion date of this October has been pushed back by 14 months and analysts say more delays can't be ruled out.

The construction of the 77-kilometer (48-mile) ship canal across the Isthmus of Panama a century ago transformed international trade, greatly reducing travel time between the Atlantic and the Pacific by eliminating the need for ships to go around the tip of South America. The construction claimed the lives of an estimated 30,000 workers, many from diseases like malaria and yellow fever.

As part of the $5.25 billion expansion project, wider locks with mechanical gates will reduce congestion and be able accommodate post-Panamex vessels, which are as long as three football fields and have the capacity to carry about 2.5 times the number of containers than held by ships currently using the canal.

Canal administrator Jorge Quijano acknowledges he would have liked to finish the expansion in time for Friday's centennial. “But we knew from the beginning a project as complex as this wouldn't necessarily be done” on time, he said.

Not everyone is as understanding.

Taiwanese President Ma Ying-jeou complained about the delays during a recent visit to Panama, saying they affect his country's trade with the United States. Two major cargo shippers, Denmark's Maersk and Taiwan's Evergreen, have already rerouted part of their operations, depriving the canal of about US$80 million a year, Quijano says.

When funding for the expansion was approved by a referendum in 2006, its completion was envisioned as a coming out party for Panama, a chance to showcase the country's pro-business credentials and role as a linchpin of global commerce.

Backers portrayed the vote as a bet on the future of Panama's children in a country where poverty still affects a third of the population, a stain on what is arguably Latin America's most-thriving economy. For the most part, the canal has blossomed under Panamanian management, contributing more than US$8.5 billion in government revenue since the Americans handed it over on Dec. 31, 1999.

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In this Aug. 4 photo, two Panama Canal workers paddle in their small boat near a cargo ship sailing through the Miraflores Locks of the Panama Canal in Panama City.

(AP)

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