Panama Canal

The Panama Canal is a canal 82 km (51 mi) long that cuts through the isthmus of Panama, connecting the Atlantic and Pacific Oceans in Central America. The canal has a huge impact on shipping, as it removes the need for ships to travel the long and dangerous route via the Drake Passage and Cape Horn (at the southernmost tip of South America). The canal saves a total of about 18,000 miles on a trip from New York to San Francisco by sea.

Return of the Canal

After construction, the canal and the Canal Zone surrounding it were administered by the United States. On 7 September 1977, U.S. President Jimmy Carter signed the Torrijos-Carter Treaty, which set in motion the process of handing over the canal to Panamanian control. The treaty came into force on 31 December 1999, since when the canal has been run by the Panama Canal Authority (ACP).

Related Topics:
Canal Zone - 7 September - 1977 - Jimmy Carter - Torrijos-Carter Treaty - 31 December - 1999

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The treaty was highly controversial in the U.S., and its passage was difficult. The controversy was largely caused by contracts to manage two ports at either end of the canal, which were awarded by Panama to a Hong Kong-based conglomerate, Hutchison Whampoa. Republicans contend that the company has close ties to the Chinese government and the Chinese military {{ref|consusa}}. However, the U.S. State Department says it has found no evidence of connections between Hutchison Whampoa and Beijing {{ref|cnn}}. Some Americans were also wary of placing this strategic waterway under the protection of the Panamanian security force {{ref|consusa2}}.

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There were widespread fears that efficiency and maintenance would suffer following the U.S. withdrawal. However, this does not appear to be the case, and the canal's efficiency appears to be improving under Panamanian control {{ref|smithson}}. Canal Waters Time (CWT), the average time it takes a vessel to navigate the canal including waiting time for passage, is a key statistic relating to efficiency. According to the ACP, CWT is decreasing while the number of transits handled is increasing. At the same time, the rate of accidents is at a record low {{ref|acpsafety}}.

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In fact, increasing volumes of imports from Asia which previously landed in the U.S. west coast ports are now travelling through the canal to the east coast {{ref|colliers}}. Canal traffic increased between 2002 and 2004 from 191 million tonnes to 203 million tonnes, while the number of transits increased from 13,183 to 14,035 {{ref_num|acptraffic|2}}. The canal set a traffic record on March 16 2004 with 1,005,551 tons of cargo transited in a single day {{ref|acpcargorec}}.

Related Topics:
Asia - 2002 - 2004

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The canal administration has invested nearly $1 billion in widening and modernizing the canal, with the aim of increasing capacity by 20 percent {{ref_num|cnn|18}}. Significant improvements cited by the canal authority {{ref|acpprojects}} include:

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• widening and straightening the Culebra Cut to reduce restrictions on crossing vessels
• deepening the navigational channel in Gatun Lake to reduce draft restrictions and improve water supply
• deepening of the Atlantic and Pacific Entrances of the Canal
• increased and improved tug locomotive fleet and the replacement of more than 16 kilometers of locomotive track
• replacing and modernising equipment, including the construction of a new drill barge, launch and suction dredger, new lock machinery controls, and an increase of the tugboat fleet by 20 percent
• improvements and modernisations to the traffic management system

In addition, the withdrawal of the U.S. allows Panama to sell excess electricity produced by the canal's dams, which was previously prohibited by the U.S. government. Only 25% of the hydroelectric power produced in the canal system is required to run the canal.

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