Canal Conundrum
Panama ponders how to float more big ships without damaging the nation's resources
Michele Labrut SF Chronicle 9nov00

As Juan Rodriguez leads his cows down a dusty street, he does not know how much longer he will be allowed to remain in the small farming community where he was born.

Rodriguez is one of thousands living in the agricultural northeast whose fate hangs on what the national press calls ``Panama's biggest project of the 21st century'' -- a $5.9 billion plan to enlarge the Panama Canal to meet maritime demand. A decision could come before the end of the year.

The 86-year-old waterway will not be able to handle the projected growth of traffic unless additional freshwater supplies can be found. And Rodriguez's home is in a water-rich zone.

``Why do they want to dig another big ditch?'' asked Rodriguez, who has never seen the canal. ``Isn't one enough?''

In recent months, canal officials have visited Coclecito, a village of about 800 people, saying they may have to move the community to an undecided location to build three nearby artificial lakes to provide more water for a larger canal. ``We can't develop the canal if we don't have sufficient water to increase traffic,'' said Panama Canal Administrator Alberto Aleman. ``Water management is definitely our first goal.''

Experts say there are few alternatives to taking water from this region of many rivers, flooding the homes of nearly 10,000 residents and constructing three freshwater lakes. The final decision rests with President Mireya Moscoso, her Cabinet and the board of directors of the Panama Canal Authority, an independent governmental body that has managed the canal since the United States relinquished control of the waterway last year.

The long-term expansion plan would dam three rivers -- the Cocle del Norte, Indio and Cano Sucio -- and create three reservoirs. The lakes would be linked by tunnels to the current canal watershed.

Financing would come from toll revenues and public offerings of stocks and bonds. The PCA is almost finished with a $1 billion expansion project that is expected to increase daily ship traffic from 36 to 43 by 2002. If studies are favorable on this second expansion, work could begin in four years.

The three-phase program would be completed by 2030 and would increase daily traffic capability to 51 ships by 2020 and 67 by 2060, carrying four times the cargo that can pass through the canal today. It would also widen the canal to allow the passage of supertankers.

The program would certainly make necessary additional water reserves to supply not only the canal's increased demand but the potable water needs of residents in surrounding areas. The canal's water basin is the source of 95 percent of the water used by the inhabitants of Panama City and Colon.

Each vessel that traverses the canal requires 52 million gallons of fresh water to stay buoyant through three sets of locks. That means that with an average of 36 ships daily, about 1.9 billion gallons of water are flushed out to sea. Such heavy water usage has forced ships to lighten their loads during previous droughts, most recently due to the El Nino phenomenon in 1998.

Environmentalists are not pleased with a project that would flood lands, relocate thousands of people, build dams and redirect rivers.

``There is not much scientific information on the area (that would eventually be dammed) and almost no study on fauna and flora,'' said Stanley Heckadon, who coordinates the canal watershed resources monitoring program at the Smithsonian Tropical Research Institute in Panama City.

And others are worried about what will happen to those who are forced to relocate.

``There are no guarantees that the displaced would be better off after the project is built,'' said Felix Wing Solis, director of Citizens for Liberty, a Panama City legal rights group. ``The Panama Canal is important, but we can't sacrifice the well-being of our people in the name of international commerce.''

However, John Gribar, director of the Canal Capacity Projects Office, says the project will provide jobs, roads, electricity, schools and better homes.

``The boon for the people is that there is the potential to tremendously improve their quality of life,'' he said.

The canal authority is studying ways to recycle the water used during each ship's passage and find other sources of water closer to the present waterway.

To prepare for the project, the federal government approved a law last year extending the canal watershed, which currently represents more than 7 percent of the national territory. The expanded watershed covers 1,326,602 acres, a 62.7 percent increase from its original area of 511,468 acres.

In recent years, migration from rural areas to the nation's two largest cities, located at opposite ends of the canal, has put a fragile watershed under severe pressure.

Panama City and Colon have 1.4 million of the nation's 2.8 million inhabitants. Population has soared since the opening in the late 1940s of the Trans-Isthmus Highway, which runs alongside the waterway, connecting the Atlantic and Pacific coasts. The subsistence farming in outlying rural areas produces deforestation and erosion, which, in turn, produces the silt that is clogging locks and canals, according to a study by the U.S. Geological Survey. In the meantime, Bishop Carlos Ariz of Colon has warned residents of villages such as Coclecito not to sell their lands to rich landowners with an eye on garnering speculative profits before a final decision is made on canal expansion. Most villagers don't even hold title to their lands and could be duped, according to Heckadon.

But no matter who owns the property, Alberto Aleman says the expansion of the canal must go ahead for Panama to keep up with the surge in ship traffic that is sure to come.

``The shipping industry has made the decision to go bigger,'' he said. ``We have to be ready.''

THE PANAMA CANAL AT A GLANCE

The 50-mile-long Panama Canal lies across major east-west and north-south world shipping routes.

• In 1903, the United States and Panama signed a treaty making the construction of the waterway possible. The pact also created the Canal Zone, which the Americans would occupy and control as a sovereign territory.
• Construction began in 1904 and ended 10 years later, at a cost of $387 million. By 1912, there were 40,000 workers from more than 40 nations working on the ``Big Ditch'' and ``the eighth marvel of the world.''
• The canal opened to commerce on Aug. 15, 1914, the day World War I began. Ships using the canal could save as much as 9,000 miles of travel sailing from the Atlantic Ocean to the Pacific Ocean.
• Treaties signed in 1977 returned the Canal Zone to Panamanian jurisdiction in 1979 and the canal itself to local control last year.
• Passage takes nine hours and costs an average of $28,000. The 950-foot Navy cargo ship Red Cloud paid a record toll of $184,338.39 last July. The lowest toll -- 36 cents -- was paid by swimmer Richard Halliburton in 1928.
• Last year, 14,337 vessels passed through the canal, generating $574 million in toll revenue -- 7 percent of Panama's gross domestic product.