On 15th of August 1914, in the Isthmus of Panama, the construction of one of the most significant works of engineering and human sacrifice in the modern era was completed: the Panama Canal.

It was designed to satisfy both North American and other world power’s commercial needs; and logically also had an eye on fulfilling the requirements of maritime transport in the longer term. That future is now with us. Business and market needs make the development of the Panama Canal a priority so it can continue to satisfy the interests of the Panamanian nation, and of its customers, in an efficient and reliable way.

In today’s world there are many modernization works occurring along the length of our aquatic highway in order to improve the functioning and profitability of the Canal, all carried out by the Panama Canal Authority (ACP). Here are some examples:

1.         Deepening the shipping channel, as well as Gatún lake – which will allow bigger ships to go through the canal, at the same time that it will increasing the amount of water in the lake, thus increasing the output of the canal’s hydrographic basin.

2.         Purchase of new machinery such as breakdown lorries and cranes.

3.         Refurbishment of rails.

4.         Straightening the curves in the area of the “Corte Culebra” – which nowadays allows simultaneous both-way.

The works above mentioned form part of the canal’s modernisation plan, as contemplated in chapter XIV of Panama’s Political Constitution.

The widening of this link that ties the business world together is an even more complex subject in that, by virtue of article No. 319 of Panama’s Constitution, any decision made related to the construction of a Canal at sea level or a third game of sluices, will have to be made by the people of Panama, by national referendum. Such a decision would have a significant impact on the world economy as well as the economic future of Panama.

In consequence, many questions have been raised around the expansion of the channel, the most controversial of which are concerned with finance.

We are talking about an business venture (belonging to all Panamanians), with an investment higher than the nation’s external debt. But we are also talking about a business that will generate profits and benefits as consequence of such investment, making Panama commercially competitive at international level, and at the same time increasing the value of our shares in the company (the Canal). This is something that I do not find at all damaging for the country.

By starting such a mission we would be providing work for many Panamanians and the internal economy would experience a “Bbom” with positive impacts on business nationwide; new services would be required, creating jobs in the capital city as well as improving the quality of service that the country offers to the world.

In order to decide correctly, one should be well informed about all the possible consequences and repercussions. For that reason, one must analyse all information related to the matter. At the moment, the matter at hand is the Canal, how it is affected by needs of the market (because of the level of service it provides) and the best interests of the nation (not just of a small minority).

Post-Panamax ships, which are bigger in weight, length and width than the Panamax ships which now only represent 38% of traffic in the Canal, are the future of international maritime transport. This was pointed out by Neil Davidson, general manager of the influential British firm Drewry Shipping Consultants, during the first conference day of the International Ports, Containers and Terminals fair (TOC 2004) in Barcelona, Spain.

Post-Panamax ships can reach up to 1,265 feet in length and have a draught [the submerged depth of the hull] of up to 50 feet. Today, 31% of vessels under construction are of Post-Panamax dimensions and nearly 60% of the orders given to dockyards are for this type of ship. In the near future these ships will become the standard, and the Canal, its administrators and its shareholders (all of the Panamanian people), must be aware of this.

On top of all this it will be important to keep an eye on, and make strategic analyses of, the following areas:

a-         Direction in which the market is heading.

b-         Demands of maritime transport.

c-         Tendencies in shipbuilding.

d-         New methods in transport loading.

e-         Port modernisation plans in other user countries, among other factors.

It is extremely important to be informed about market tendencies within maritime transport that have an impact on international economies.

Nowadays, the ports of the East Coast of the States (Boston, New York, Florida) are undergoing huge modernisation operations, deepening the port areas to allow the docking of higher draught ships and acquiring Post-Panamax’ cranes. These are just some of the works designed to improve the welcome offered to bigger ships.

Big shipyards, such as the “Dalian New” in China, are building vessels of up to 300.000 tons of deadweight (TDW). In Shanghai (China) they are building an even bigger dockyard for the construction of still larger ships.

It is to be supposed that the huge investments currently pouring into the eastern and western ports of North America, coupled with the increase in Post-Panamax’ ships (thus indicating an increase in the volume of cargo being transported), are developments that oblige the Panama Canal, and its administrators, to take measures appropriate to meeting the needs of its customers.

It seems to me that it cannot hurt Panama to try and improve the functioning and services of the Canal. By doing this we will make ourselves competitive, as well as and capable of facing new challenges and of making the right decisions about the economic, social, political and cultural development so yearned for by Panama and Panamanians.

Finally, I would like to make an appeal to Panamanian society to get more involved in this difficult matter so that we can make the best decision in the end, not only for the country but also for generations to come. In the same way I would like to urge the Panamanian government and the ACP to provide us with all the relevant information, and also to think of how best to educate the population about our new situation, so that in years to come nobody will say that our ignorance led us to make the wrong decision and that we have to pay for it.