Panama to hike canal toll
Panama is expected to unveil this week its plans for increasing tolls on the Panama Canal to help pay for a $5.25 billion expansion of the world famous waterway, a senior government official said."It's a lot of money, it's about a third of the economy," said Ricaurte Vasquez, Panama's minister for canal affairs, referring to the cost of the project.Panamanians overwhelmingly approved the plan in a referendum on October 22 and the overhaul will allow their inter-oceanic canal to handle mammoth modern cargo ships.Vasquez, a former finance minister who also chairs the state-owned Panama Canal Authority that administers the canal, spoke in an interview with Reuters.Panama has already put canal customers on notice that it would like to double canal tolls over the next 20 years to finance the expansion, Vasquez said.He said it had never been made clear how soon the hikes on the US-built "Big Ditch," which first opened in 1914, would be phased in, however.
Alberto Aleman, the canal authority's chief administrator, is set to outline Panama's new pricing policy in a speech in Shanghai next Thursday, Vasquez said.US vessels remain the biggest users of the canal, followed by Chinese and Japanese ships, according to the Panama Canal Authority.Vasquez said Panama's possible need for external financing to overhaul the canal would depend on its toll revenues."The financial needs will be increased or reduced accordingly." he said.In the interview, Vasquez said the canal's expansion - the massive construction of a new set of locks should begin around December 2008 - was expected to add as much as 2.5 percentage points to Panama's annual gross domestic product and help lift the country out of poverty."We dream about being the fastest-growing, the best country in Latin America," he said.He acknowledged there were no guarantees about breaking Panama's "vic-ious cycle of poverty," however, and said the country would seek the help of the United Nations Development Program to help ensure its success.
