Panama thinking big on shipping

Panama's Government hopes a new megaport on a man-made peninsula at the Pacific coast entrance to its canal will boost the country's status as a Latin American shipping hub.

The director of Panama's maritime authority, Ruben Arosemana, said the peninsula would be made from waste material dredged from the long-awaited expansion of the Panama Canal or earth from a nearby mountain.

"We are preparing a technical study into creating a 100ha peninsula at the Pacific entrance to the canal, near Farfan or Palo Seco," he said.

Large ships would stop at the new port and deposit cargo for trans-shipment to multiple destinations by smaller boats.

The Government will fund the creation of the peninsula, which Arosemana estimated could cost US$100 million ($140 million).

The new docks themselves would be funded with up to US$1 billion invested by four shipping companies: Evergreen, China Ocean Shipping, P&O and Maersk Sealand.

They would pay rent to the Government for occupying the peninsula.

"Building a better port and utilising Panama's amazing potential as a logistical centre for the whole of the Americas is obvious,"said Jan Dehn, an economist at Credit Suisse First Boston in London.

"There's a real benefit there and the Government wants to tap it."

Economists say the port project will be a huge boon for Panama's economy and could generate up to 10,000 direct and indirect new jobs.

The project is linked in many industry experts' minds with the possible expansion of the canal, which Panamanians will vote on next year.

The Panama Canal is approaching capacity.

About 47 transits a day and 17,000 a year are possible, and this limit will be reached by 2012.

By 2020, 30 per cent of the global shipping fleet will be too large to fit into the locks that lift ships across the continent.

"The megaport is associated with canal expansion, and it seems that these are the expectations of the maritime firms that have come to Panama," said Arosemana.

He said the new port would go ahead even if the country voted against expansion next year. 

"That's why we are working on the alternative method of using the earth from the hill [to build the peninsula], so as not to make it dependent on the canal expansion."

- REUTERS