Panama Canal Gets Loan
For Expansion
Panama -
The Panama Canal won't
need more loans for a
US$5.2 billion expansion
project to accommodate
larger ships after it
secured about half the
financing needed, the
waterway's operator
said.
Part of the funding is
from a US$2.3 billion
loan by five overseas
banks, which shows
"great confidence" in
improving the
94-year-old waterway,
Panama Canal Authority
Chief Executive Officer
Alberto Aleman said
today on a conference
call. The rest will come
from contract awards and
shipping fees, he said.
Relying on fees is a
"matter of necessity"
that may be a problem as
transportation and oil
costs drop, making it
cheaper to use longer
routes, Martin Stopford,
London-based executive
director at Clarkson
Plc, the world's biggest
ship broker, said in an
interview. "There's
nothing else they can
do. No one has any money
to loan."
The authority is
preparing for the
expansion even as
traffic through the
canal fell 0.1 percent
from a year earlier in
2008's first nine
months, the first such
drop since 2002.
Transport fees may be
raised at the end of
next year if the global
economic slump continues
to curb canal use,
Aleman said.
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