(MENAFN- AFP) A giant Chinese-chartered freighter nudged its way into the expanded Panama Canal on Sunday to mark the completion of nearly a decade of work forecast to boost global trade.
Thousands of people cheered and waved flags as they watched the vessel, especially renamed COSCO Shipping Panama, inaugurate the widening of the century-old waterway, which has been fitted with a new shipping lane and locks.
"This is a great day, a day of national unity and a day for Panama," President Juan Carlos Varela said in a speech.
"This is the route that unites the world," he said.
The Chinese ship entered from the Atlantic and was to take hours to make its way to the Pacific side of the country, where a ceremony attended by several heads of state and foreign dignitaries was to take place.
The United States -- builder of the original canal, which opened in 1914 and is still in operation alongside the additions -- was being represented by the wife of US Vice President Jose Biden, Jill Biden, and the US ambassador to Panama.
The United States and China are the two most frequent canal users. Its expansion is expected to greatly benefit commercial traffic between North America and Asia.
- Untapped market -
The expansion work carried out since 2007 -- and finished two years late at a cost of at least $5.5 billion -- allows a new generation of much larger ships, known as Neopanamax class vessels, to ply the canal.
Neopanamax freighters can carry up to three times the cargo of older and smaller Panamax ships. Cruise ships built to the same dimensions typically double the number of passengers of the previous iteration.
The expansion will also allow Panama to lure massive liquified natural gas (LNG) tankers for the first time.
They represent a lucrative segment of the shipping market whose importance has grown with the development of US exports of natural gas from shale, most of which head to Japan and South Korea.
Varela said Saturday the first LNG vessel is scheduled to cross the canal next month. He predicts that many more will follow.
Panama's plan behind the expansion is to triple the $1 billion in revenues it currently gets from canal shipping fees.
However, that goal might still be a decade or more away, according to officials from the Panama Canal Authority, the autonomous government agency that runs the waterway.
The Spanish- and Italian-led consortium that carried out the expansion are demanding hundreds of millions of dollars in cost overruns. So Panama might have been overly ambitious regarding its return on investment.
"Everybody is always overly optimistic," said Peter Shaerf, deputy chairman of Seaspan Corporation, a container ship group with a fleet of 100 vessels, more than half of which are Neopanamaxes.
But regardless of the cost, he told AFP, the augmented canal is "wonderful" and "will have a huge impact on trade."
The expansion is "one of the engineering wonders of the world," said Shaerf, speaking at a lavish party held late Saturday for canal clients and investors.
- 'Money well spent' -
Another guest, Susan Antz, senior loan officer for the European Investment Bank, said the $500 million credit her institution had extended for the expansion project was "money well spent."
Toshiyuki Suzuki, senior managing executive officer of the container ship and port business unit of Kawasaki Kisen Kaisha, one of Japan's biggest maritime transport companies, agreed that the expansion will have "a very big impact" for decades to come.
"The construction of the canal is very convenient" because it will save a lot of time and oil consumption, he said.
For Panama, the feat it pulled off is a source of pride.
The government hopes the glitz and historical nature of the broadened canal will help overshadow the severe blow the country took to its reputation this year with the "Panama Papers" scandal.
Revelations of offshore companies started by a Panama law firm, and used by the world's rich and influential to dodge taxes and stash assets, have become the first thing many people think of when the Central American nation is mentioned.
But the canal, and the work to develop it for modern trade, is "the real face of Panama," Jorge Quijano, head of the Panama Canal Authority, told AFP this week.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.