Captain Gilbert Blackwood is a ship's pilot. His job is to guide ships through what's been called one of the wonders of the Industrial World, the Panama Canal.

This massive waterway splits North and South America, acting like a highway for ships traveling from Europe to Asia.

By taking the short cut through the canal ships save a week of sailing around the bottom of South America.

The canal runs for 80 kilometres through the small country of Panama in Central America. Panama is about a third of the size of Victoria with a population of 3 million.

When the Panama Canal was built a hundred years ago it was a huge project; thousands of workers used shovels and dredges to cut through jungles, hills and swamps.

As if their job wasn't hard enough, they had to contend with deadly tropical diseases, like malaria and yellow fever, at least 20,000 people died in those early years.

Part of the reason why the Panama Canal was so difficult to build is that its actually above sea level, so ships have to be lifted up to travel through.

This is done with a series of what are called locks. Using gravity, lock chambers are filled with water, raising a ship by as much as 26 metres. A gate is then opened and the ship can sail on.

Electric locomotives are used to drag the ships though. 42 ships travel through the canal in a day taking about nine hours for the whole trip.

But after saving ships owners millions of dollars over the years, the Panama Canal is now facing a major problem: ships are getting too big.

Ships are much longer and wider that they were a hundred years ago and they're getting bigger all the time.

Some oil tankers and container carriers already don't fit in the canal and many of those that do squeeze in with about 60 centimetres to spare, making the job of pilots like Captain Blackwood extremely difficult.

So now the Panama Canal Authority wants to make the canal wider and deeper. But that's going to be expensive ... 6 billion dollars in fact.

For a small country like Panama they're worried they won't make enough money to make it worth while, plus there are also worries that it will affect the environment and small farmers on the edge of the canal.

But most Panamanian people are behind the project. In October last year the country had a referendum. Seventy-seven per cent said they wanted a wider canal After all; it will create a lot of jobs for Panamanians. And if the work isn't done, ships will have to find another route.

So it looks like one of the wonders of the industrial world will have another lease on life.

And in just eight years we could see the completion of one of the biggest engineering projects of the new century.