This sounds like a big project.

By KATHIA MARTINEZ

PANAMA CITY, Panama - 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.

In the presence of former President Carter, who signed the 1977 treaty that gave Panama control of the waterway, Panamanian President Martin Torrijos celebrated the start of construction on two wider sets of locks being added to both sides of the canal.

"We are witnesses to an exceptional and unique act," Torrijos said moments after the explosion sent up a curtain of smoke and water.

The $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 United States 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 United States. China is the Panama Canal's second-largest user.

The waterway now moves 4 percent 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 $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 percent a year.

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