Back in 1997, Hutchison Whampoa, Chinese Company, made a questionable deal with the Panamanian government to operate port facilities at each end of the Panama Canal. Just to keep the record straight, there are several such facilities on both the Atlantic and Pacific sides of the canal. At the time, former New Jersey Congressman and then the U.S. Ambassador to Panama William Hughes felt that the deal was not "transparent," diplomatic words for being under the table.
At any rate, Panama is a key part of China's expanding trade. It owns the largest fleet of merchant ships in the world and is a major user of the Panama Canal - mostly goods manufactured in China and flowing to East Coast ports in the United States.
That leads me to a recent revelation about Hutchison Whampoa. It has decided to invest $1 billion to quadruple the capacity of the two ports, $500 million over the next three years and another $500 million by 2015. Some might question the investment. But, there is more to come.
For some time, there has been speculation about putting in a third set of locks at the canal to accommodate today's largest vessels. Approximately 85 percent of the world's merchant fleet can transit the canal at this time. The future is clear. More and more ships are being built or on the drawing boards which will be unable to use the canal unless a third set of wider locks are constructed. Actually, the idea is not new. In the late 1930s plans were developed by the United States to put in a set of wider locks. The idea was scrapped because of World War II and subsequent nationalistic forces within Panama.
The cost for construction of the locks, dredging the canal deeper, and improving the water shed used for transits (some 45 million gallons of water are used by each ship) is in the range of $7 to $9 billion! Simply stated, the budgets of Panama and the Canal Authority cannot do it alone.
With both the Clinton and Bush Administration focused elsewhere, we first lost our right to maintain military bases in Panama - essential to drug surveillance in Colombia. Now, with the focus on hurricanes, Iraq and terrorism, I am concerned that the Bush Administration is not engaged with Panama on the third set of locks.
The last thing this country needs is the takeover of the Panama Canal by China because of our lack of focus. The economic and military strategic importance of the Panama Canal must take a priority.
