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Panama set to begin $5bn project Panama Canal expansion underway
(about 1 hour later)
Panama has started work on a $5bn (£2.4bn) building project to widen the Panama Canal to increase its capacity.Panama has started work on a $5bn (£2.4bn) building project to widen the Panama Canal to increase its capacity.
The project, which was officially unveiled on Monday, involves adding a third set of locks that will enable modern ships to use the canal. The historic scheme was launched by Panama's president at a colourful ceremony featuring explosions and the release of thousands of balloons.
Many tankers are now too large for the 50-mile (80km) route and supporters say the modernisation is vital to maintain trade and increase jobs. Panamanians overwhelmingly backed the plan in a referendum held in 2006.
Panama residents overwhelmingly backed the plan in a referendum held in 2006. Many tankers are now too large for the 50-mile (80km) route and supporters say the modernisation is vital to maintain trade and will create 7,000 jobs.
'Exceptional act''Exceptional act'
But opponents have attacked the project, due to be completed by 2014, arguing that it will damage the environment and widen the gap between rich and poor. But opponents have attacked the project, due to be completed by 2014, arguing that it will damage the environment and widen the gap between rich and poor in the country.
It is estimated that, in volume terms, around 5% of the world's trade passes through the Panama Canal.It is estimated that, in volume terms, around 5% of the world's trade passes through the Panama Canal.
Foreign dignitaries including Jimmy Carter were present
The government has said the scheme will be financed by raising tolls on the waterway as well as through foreign credit.The government has said the scheme will be financed by raising tolls on the waterway as well as through foreign credit.
Panamanian President Martin Torrijos launched the project before a crowd of leading businessmen and foreign dignitaries. It will involve adding a third set of locks that will enable modern ships to use the canal.
"We are witnesses to an exceptional and unique act," he said. Before a crowd of leading businessmen and foreign dignitaries, President Martin Torrijos said it was a historic day for the Panamanian people.
"We are witnesses to an exceptional and unique act," he said. "In 30 years, Panamanians will remember this day and about the right decision this generation made."
The US ceded control of the canal, which it built in the early 20th Century, in 1999.The US ceded control of the canal, which it built in the early 20th Century, in 1999.
Former US President Jimmy Carter, who signed an agreement in 1977 paving the way for Panama to take control of the waterway, said he was "proud" of the expansion plans.Former US President Jimmy Carter, who signed an agreement in 1977 paving the way for Panama to take control of the waterway, said he was "proud" of the expansion plans.