Canal expansion begins.

Panama blasted away part of a hillside next to the canal on Monday, marking the start of the waterway's biggest expansion since it opened 93 years ago, reports AP (Sept. 4, 2007). In the presence of former President Carter, who signed the 1977 treaty that gave Panama control of the waterway,

The US$5.25 billion expansion is expected to double the 50-mile canal's capacity and lower the price of consumer goods on the East Coast of the US by allowing wider vessels to squeeze through with more cargo. About two-thirds of the cargo that passed through the canal is headed to or from the US. China is the Panama Canal's second-largest user. The waterway now moves 4% of the world's cargo. The new locks, approved in a referendum nearly a year ago, are expected to be ready for use between 2014 and 2015. The Panama Canal Authority, the autonomous government agency that runs the canal, is borrowing up to US$2.3 billion between 2009 and 2011 to help finance the project. It expects to pay that back by increasing ship tolls an average of 3.5% a year;

In addition to benefiting international trade, the new locks are expected to generate more revenue for the canal and Panama's government, which is struggling to pay back more than US$10 billion in debt and battle poverty that affects some 40% of the population. Under Panama's control, canal accidents and time needed to transverse the canal are down, while revenues have increased. Also attending the ceremony were Sen. Robert Byrd, D-W.Va., and several Central American leaders and Colombian President Alvaro Uribe.