NEW PANAMA CANAL; PIPE DREAM OR POSSIBILITY?

July 29, 1980

"A new and bigger Panama Canal is needed." That was the conclusion of a report by a special US study commission issued in 1970 as the era of the super-tankers and cargo liners was dawning.

The statement is even more appropriate today as talk flurries on possible Japanese financing of such a sea-level waterway linking the Atlantic and Pacific through Panama.

The present Panama Canal, finished in 1912 and still one of the great man-made wonders of the world, is simply not wide enough to accommodate the increasing number of large ships that ply the oceans. Some of these ships weigh in at 500,000 tons and are too wide of beam and too deep of draft to go through the 68-year-old waterwey. Moreover, the canal's intricate system of locks makes the transit operation quite cumbersome, time consuming, and costly.

A wider canal, at sea level, is obviously called for -- and this is where the tentative Japanese proposal fits in.

The Japanese plan, which has been greeted with enthusiasm in Panama, is to construct a sea-level waterway, thus doing away with the locks of the present canal. The route would follow roughly the one selected in the 1970 report -- from Puerto Caimito on the Pacific to Lagarto on the Caribbean.

This 40-mile route, lying west of the present canal, is about 10 miles shorter than the present waterway. Seen as easily the best of nearly two dozen alternate routes studied in recent years, the Puerto Caimito-Lagarto link is one of the least costly to construct.

Yet the project would require at least $20 billion -- $8.3 billion as the basic cost, with the rest needed to cut roads, slash through mountains next to the canal, and provide supplementary public works.

There is basic agreement that a new canal is needed and should be built. But the key question revolves around the linking of some sort of agreement between the potential Japanese builders and the Panamanian and US governments.

Under terms of the new Panama Canal treaties between Panama and the United States, which went into full force last Oct. 1 and provides for gradual Panamization of the present canal over the next 20 years, construction of a new waterway requires the approval of both Panama and the US until the year 2000.

This should be merely a formality, but snags could develop.

Washington indicates it wants to have some sort of defense role in a new canal. Panama, jealous of its sovereignty, might object to such a proposal. There is already disagreement on the defense role spelled out in general terms in the new canal treaties.

Moreover, Panama's strong man, Gen. Omar Torrijos herrera, has told the Japanese that Panama does not need the approval of the US either to enter into negotiations on a new canal or to build the waterway.

The treaty states that "no new interoceanic canal shall be constructed in the territory of the Republic of Panama, . . . except in accordance with the provisions of this Treaty." The US is prohibited from building a new canal without Panamanian approval, but can construct a third lane of locks to the existing canal with such approval.

While debate on these issues goes on, Japanese businessmen and government officials have offered to put up $25 million to update the original US feasibility study of a new canal. The offer hinges on President Carter' s authorization of a joint Japan-Panama-Us commission for the study. President Carter recently told Sen. Mike Gravel (D) of Alaska, the leading US congressional advocate of a new canal, that he will announce his decision soon.