By Enrique Pretel and Elida Moreno

PANAMA CITY, June 26 (Reuters) – Panama opened the long-delayed $5.4 billion growth of its transport canal amid cheering crowds on Sunday, regardless of looming financial uncertainty within the transport business and a heated battle over billions in price overruns.

At 7.50 a.m. (1250 GMT), the Chinese container ship “Cosco Shipping Panama” entered the Agua Clara lock on the Atlantic to start the primary crossing of the roughly 50-mile-long (80.45-km-long) waterway and was attributable to emerge on the Pacific facet by 5.00 p.m. (2200 GMT).

The growth, which triples the dimensions of ships that may journey the canal, permits the nation to host 98 % of the world’s transport and is geared toward wresting market share from rival Suez and U.S. land routes made cheaper by low oil costs.

By 2021, the Panama Canal Authority (ACP) is hoping the undertaking will usher in $2.1 billion per 12 months in added income, representing 2.8 % of gross home product.

“As a Panamanian, I am proud,” mentioned Odalis Castillo, an 18-year-old pupil who attended the launch. “There will be more money to spend on social projects.”

But the ACP is enmeshed in a $3.587-billion battle over price overruns with Spain’s Sacyr and Italy’s Salini Impreglio, which gained the undertaking in 2009 and completed it two years late, amid building setbacks and strikes.

It additionally faces challenges like the provision of contemporary water wanted to maneuver the enormous locks and secure dealing with of the massive ships.

So far 170 ships have signed up to make use of the canal within the subsequent three months. If the business perks up, the ACP already has a $17 billion plan for a fourth set of locks to lure even greater ships that may now solely journey by the Suez Canal.

Just a dozen of the 70 heads of state invited to see the debut of the third set of locks attended the ceremony however Panama’s Foreign Ministry hailed the occasion a diplomatic success, with representatives from almost all of the invited nations in attendance.

Analysts mentioned the rank of these main the delegations was affected by the Panama Papers scandal, through which hundreds of thousands of paperwork have been leaked from regulation agency Mossack Fonseca, revealing how a number of the world’s richest individuals use offshore firms to keep away from tax and launder cash.

Jill Biden, the spouse of U.S. Vice-President Joe Biden, led the delegation from the United States, which completed constructing the canal in 1914, managed it till 1999 and remains to be its greatest person. (Writing by Alexandra Alper; Editing by Sandra Maler)

(c) Copyright Thomson Reuters 2016.