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SCOTT SIMON, HOST:

Panama Canal was a stunning feat of engineering when it opened its locks 100 years ago. It still is, but today a massive effort to widen and deepen the maritime shortcut is underway. By allowing bigger ships, the expansion aims to nearly double the amount of cargo that moves between the Atlantic and the Pacific oceans.

The project is creating a demand for larger cargo vessels, as long as four football fields. So now, several U.S. ports are expanding to accommodate them. Tim Padgett of member station WLRN takes us from Miami to Panama to look at how the canal is changing modern shipping.

TIM PADGETT, BYLINE: The Port of Miami is putting the finishing touches on a new tunnel set to open this month. It's part of a $2 billion upgrade, one that will let Miami send a lot more auto-parts to Brazil and get a lot more handbags from China on more massive vessels known as Post-Panamax ships.

A growing number of ports in the Eastern U.S. - Charleston, South Carolina is one of the most recent - have started renovations for the big Post-Panamax ships - deep harbor dredging and skyscraper-sized loading cranes. What they're trying to take advantage of is this - an even more gigantic venture a thousand miles to the south - the $5 billion expansion of the Panama Canal.

The wider Post-Panamax channels and locks will almost double the cargo the canal moves in and out of our hemisphere each year. Jorge Quijano heads the Panama Canal Authority, or ACP.

JORGE QUIJANO: Panama's going to be the largest port in Latin America.

PADGETT: The canal expansion sites look like a digitally created Hollywood epic - armies of trucks and cranes erecting walls of concrete more than two miles long and more than 100 feet high. Quijano says the job should be finished by the end of next year.

QUIJANO: The whole program is about 75 percent complete.

PADGETT: Which is great until you consider the trouble hanging over the remaining 25 percent. You see, earlier this year the expansion work shut down for two weeks.

QUIJANO: This behavior is definitely disappointing.

PADGETT: Talks broke down between the Authority and a consortium of European construction firms over who should pay for an alarming $1.6 billion cost overrun. The consortium says it's had to adjust for unexpected circumstances like higher earthquake potential along the canal - things it feels the authority did not fully disclose. But Quijano calls those claims exaggerated, if not an excuse for the consortium's poor planning.

QUIJANO: They claim that they have found different soil conditions and so on that have generated more cost. However, even if that was a fact, the amounts that they're claiming are outrageous and they're not within the ballpark.

JAN KOP: It's such a process, you have to be flexible.

PADGETT: That's Jan Kop, the consortium's deputy project director. He says it's the authority that's being unrealistic.

KOP: The ACP has put in place a very rigid contract contract, but, of course, for a project this scale, ground condition is something - they come along when you execute a project.

PADGETT: The two sides have since agreed to some stopgap financing to keep the project going, but their dispute hasn't been settled. To cut through the dysfunction and avoid another costly delay, the parties have agreed to international arbitration. Some of that legal proceeding is taking place in the United States, which seems fitting since the stakes are also high for so many U.S. ports. Carlos Urriola is executive vice president of the Manzanillo International Terminal, Panama's largest port.

CARLOS URRIOLA: Ports like Miami are definitely waiting to see when we're going to be ready with our canal.

PADGETT: If U.S. ports are waiting for the increased Panama Canal cargo traffic, the stakes are even higher for Panama. It's hoping to become the Hong Kong of the Americas, a global maritime and financial hub, says Quijano.

QUIJANO: There's much more in Panama than just the canal. And our thrust has been to make Panama more of a logistics center.

PADGETT: As a result, says Urriola, of the Manzanillo port...

URRIOLA: The canal is the religion that unites Panamanians.

PADGETT: Which is why Panamanians and not a few Americans are praying the work gets done. For NPR News, I'm Tim Padgett.

SIMON: Tomorrow on WEEKEND EDITION, we look at how the expansion of the canal is changing life for some in Panama, but not for others.

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