Title: Panama Canal Customer newsletter
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 Material Information
Title: Panama Canal Customer newsletter
Physical Description: Serial
Language: English
Publisher: Autoridad del Canal de Panama
Place of Publication: Balboa, Panama
Publication Date: January 2002
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Bibliographic ID: UF00099413
Volume ID: VID00009
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.

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January 2002


ama Cnal ACP


U(ionlS@Gu@D K@W7SQ@(it@D


A Message to Canal Customers


Two years have passed since the transfer
of the Panama Canal to the Republic of
Panama. During these two years our
main efforts have been directed to
maintaining the gates opened to the
shipping community, and ensuring a safe
and efficient transit of the waterway to all
vessels of the world.
The Panama Canal Authority has since
the transfer in December of 1999,
embraced the challenge of focusing in
fulfilling its new responsibilities, which
go beyond the efficient operation of the
waterway and reach the realm of
becoming the prime driving force of
Panama's progress and growth. These
new responsibilities entail a clear
understanding of our role as one of the
most important world maritime
commerce waterways and as pillar of our
country's development. Reconciling
both roles is important to enable the
design of alternatives that can respond,
not only to our customers' expectations,
but also to the expectations of the
Panamanians who for many decades
cherished the dream of becoming the
sole administrator of this paramount
enterprise.
We have not lost sight of our supreme
responsibility with regard to world trade.
Through these years we have been
working towards modernizing the
waterway and improving, not only its
plant and equipment, but also its
infrastructure and operating systems.
This challenging and extremely complex
operation demands a high level of
maintenance and constant
modernization to continue serving its
multiple users and customers from all
over the world, providing a 24-hour
service, three hundred and sixty five
days a year.
This closing year has been particularly
challenging for us at the Panama Canal
Authority, as I am sure it has been for
everyone else in the world. In spite of
the well-known negative effects of the
world economic slowdown and the
horrific events of September 11, we had


a successful year in terms of activity
and accomplishments. Despite a
moderate decline in oceangoing
transits and PC/UMS net tonnage,
fiscal year 2001 saw a considerable
increase in Panamax vessels, which
constituted 35.8 percent of the total
number of transits. During this


period, 366 transits of vessels
measuring over 950 feet in length
were reported, as compared to 247 in
fiscal year 2000.
Furthermore, impressive statistics for a
particularly safe year at the Panama
Canal marked the ending of fiscal year
2001. Accidents reported
corresponded to only 0.13 percent of
the overall transits made. The
accident rate throughout Canal
history has never been this low.
However, more significant are the
challenges and critical factors that
surrounded this great achievement by
Canal employees. The remarkable
safety record was reached in spite of


the change in the traffic mix now
comprising bigger vessels and while the
rigorous maintenance program was
underway and the modernization
program continued as scheduled. All
major programs were successfully
fulfilled, while providing improved
service to our clientele, as demonstrated
by a reduction in Canal Waters Time
from 29.4 hours in FY 2000 to 23.9 hours
in FY2001.
The modernization program reached a
new milestone. Its largest project, the
Gaillard Cut widening, originally
planned to take about 20 years, was
successfully concluded last November,
eleven years before it was originally
planned and with significant savings.
The widening is now finished and upon
completion of the signaling the widened
Cut will be fully operational, probably by
March 2002, permitting Panamax
vessels to pass each other without
restriction at this narrow portion of the
waterway. The other components of the
modernization program are also
advancing with excellent results.
Duringtheyear now ending, the Panama
Canal Authority received the ISO 9001
Certification in two of its most important
areas: the Department of Maritime
Operations and the Training and
Development Division of the
Department of Human Resources. The
ISO 9001 certification is a great
accomplishment resulting from the hard
work and commitment of the men and
women in our labor force who --aware of
the importance of this process-- put all
their efforts into making this objective a
reality. We are extremely proud of each
and every employee who played a part
and contributed to the success of this
effort.
Looking ahead into the future, we fully
understand the need to continue
improving and we are committed to do
so in order to remain the route of choice
of our customers and a cornerstone of the
global transportation system.
continue...








continue...


We will continue with the process of
certifying the rest of the organization
under ISO 9001 standards, and expectto
achieve this goal in the year 2003. We
will continue with the studies for the next
Canal expansion and considering larger
locks to be able to accommodate
existing Post-Panamax vessels as well as
those being ordered and built by the
maritime industry.
The Panama Canal Authority is working,
within its charter, to make Panama a
destination and the most important
distribution center in this hemisphere.
We are finalizing the studies to dredge
the Pacific entrance to the Panama
Canal, allowing Panamax and post-
Panamax vessels to enter Balboa port
and any other future terminal in the
Pacific fully loaded, thus delivering
greater cargo volumes to Panamanian
ports. Meanwhile, we proceed with the
project to deepen the navigation



The Financial Perspective

The past two years have been
challenging, as we needed to bring
about a culture change from the non-
profit federal agency of the United States
government to a profit-driven
corporation of the Republic of Panama.
Both fiscal year endings satisfied
management expectations as well as the
expectations of all Panamanians. In
terms of payments to Panama, in fiscal
year 2001, the corporation contributed
with 150.4 millions in direct payments
resulting from tolls collection and 29
millions in payments for public services
rendered, thus complying with our
vision of becoming the driving force of
Panama's progress and growth.
In spite of the economic slowdown and a
slight decline of our revenues, during
fiscal year 2001 we accomplished
important savings in financial terms and
achieved essential operational
efficiencies that guided the agency to a
year end closure in sync with the
financial plan. This was the result of a
successful financial management
program that enabled the Canal to carry
on with its multimillion-modernization
and improvement program, while
considering massive investments to
increase capacity to satisfy the maritime
industry demand well into this century.


channel along Gatun Lake and
Gaillard Cut by one meter. This
deepening will increase water storage
capacity in Gatun Lake and will also
help the Panama Canal maintain
maximum draft during the dry months
of the year.
In summary, we are concentrated in
providing significant added value to
our customers while increasing world
trade. We have intensified our
outreaching efforts and periodically
meet customers and industry leaders to
review tendencies and assess
opportunities. We have taken
advantage of the meetings with the
Advisory Board to obtain their expert
advice, guidance, and useful
information from the global maritime
community perspective on how to
prepare the Canal to meet future
challenges.
The Panama Canal Authority is now


The year 2002 is somewhat of a
concern as economic growth and
international trade continue to show
weakness, a situation that was
worsened by the tragic events of
September 11. Yet the Panama Canal
as a long term on going concern is
prepared to meet the challenges of the
business cycle, at all times with a
business attitude toward the long term
commitment of providing safe,
reliable and efficient transit passage
between the oceans.


closer to its customers. I hope that you
now find a Panama Canal workforce
willing to listen to and attempt to
understand your concerns, and that -
even if you do not always agree with our
actions you view the process as fair and
the decisions informed and principled.
We will continue striving to improve the
Canal's competitiveness, safety,
reliability and profitability through an
efficient utilization of our resources,
while giving greater attention to our
clients. We at the Panama Canal
Authority pledge to continue providing
high quality transit service and
responding adequately to the changes in
the maritime transportation business to
fulfill our natural mission to unite the
world by providing passage to vessels of
all countries.


It is precisely at this time when our
corporate effort is geared to further
strengthening the Canal's financial
position, focus long term towards future
requirements for larger vessels and traffic
volumes, while positioning the company
to meet the challenges of a global
economy driven by market forces.


I~









Canal Transits and Cargo Information


A preliminary forecast for the first quarter
of fiscal year 2002 (October-December)
reflects a 4.0 per cent decline in
commercial cargo tonnage to 48.3
million long tons by comparison to the
50.3 million recorded in the same period
of fiscal year 2001*, an indicator that the
overall world economic slowdown has
affected Canal traffic performance.
Cargo tonnage declines were evident for
grains, coal and coke, chemicals and
petroleum chemicals, lumber and
lumber products as well as petroleum
and petroleum products. By contrast,
commodities that showed positive results
included containerized cargo, ores and
metals, nitrates, phosphates and potash,
manufactures of iron and steel and
refrigerated products. Preliminary
estimates indicate that grains, the
principal commodity group shipped
through the Panama Canal, will drop by
2.4 per cent to nearly 10.5 million long
tons from the same period last year.
Grain importers in Japan and Taiwan
have expressed fears of importing
genetically modified grains from the
United States while the world economic
slowdown is affecting grain consumption
patterns. Containerized cargo, the
second most important commodity
group, is expected to register a 1.7 per
cent increase for the first three months of
fiscal year 2002 with 8.9 million long
tons. Presently, containerized service
patterns through the Panama Canal have




Slowdown in Canal Traffic
During the first quarter (October -
December) of fiscal year 2002,
preliminary estimates indicate a total of
2,912 oceangoing transits, a 5.8 per cent
decrease by comparison to the 3,092
total in fiscal year 2001 *. The number of
transits by Panamax vessels, those of
100-foot beam and over, reflected a 4.4
per cent shortfall from fiscal year 2001
with 1,141 transits. The chart enclosed
provides the monthly trend by quarter.
Panamax vessels transits represented a
39.2 per cent share of total oceangoing
transits. Presently, dry bulk carriers and
containerships hold nearly 60 per cent of
all Panamax-size vessel transits, with
shares of 29.6 and 29.0 per cent,
respectively.


not been significantly affected by
world economic conditions. Cargo
tonnage by petroleum and petroleum
products, third commodity group in
importance, are estimated to decline
by 16.7 percent to 6.7 million long
tons. The petroleum and petroleum
products production has been affected
by the United States economic
slowdown in addition to the tragic
events of September 11. These have
impacted the jet fuel demand with a
significant decrease from the same
period last year, noticed in the airline
industry. It is expected that U.S.
demand of petroleum and petroleum
products will recover through the year
2002.


ACP
AUTORIDAD EL CANAL DEP


Month FY 2001 FY 2002
Oct. 419 355
Nov. 379 389
Dec. 395 397*
Total 1,193 1,141 *
*Estimated

* Transit figures for the month of
December 2001 were estimated.


New Toll Record
Upon completion of its maiden voyage
on December 3rd, the cruise ship
Norwegian Star broke the toll record set
earlier this year by the Radiance of the
Seas.
The Bahamian flag Norwegian Star paid
$208,653.16, topping the toll record
established in March by the Radiance of
the Seas that was set at $202,176.76.
This impressive vessel from the
Norwegian Cruise Line has a length of
294.13 meters (964.99 feet), and its
beam measures 32.31 meters (1 06 feet);
the volume of this ship is greater than
that of its predecessor, Radiance of the
Seas, and so is its tonnage. It has the
capability to accommodate up to 2,683
passengers, although during its first
voyage it carried 2,226 passengers and
1,053 crewmen.
This German-built cruise ship departed
from Miami, Florida, on November 19,
calling at Cartagena, Colombia, before
transiting the Canal en route to its final
destination, Acapulco, Mexico.
Because of its non-stop operation and
reputation for safe and dependable
transit service, each year an average of
284 cruise ships transit the Panama
Canal carrying on board passengers
from all over the world. The Panama
Canal offers the unique experience of
transiting two oceans in one day.
During 2001, the standing toll record
was broken on three occasions by cruise
ships. On March 8, Celebrity Cruises'
Infinity paid $201,531.69 for its Panama
Canal transit, and on April 12, Royal
Caribbean's Radiance of the Seas paid
$202,176.76.


Major Canal Cargo Flows October-December (Estimated)

GRAINS
CONTAINERIZED CARGO
PETROLEUM AND PETROLEUM PRODUCTS
ORES AND METALS *FY 2001
FYV2002
NITRATES, PHOSPHATES AND POTASH
MANUFACTURES OF IRON AND STEEL
CHEMICALS AND PETROLEUM CHEMICALS
REFRIGERATED FOODS
LUMBER AND PRODUCTS
COAL AND COKE
0 2,000 4,000 6,000 8,000 10,000 12,000
Thousand Long Tons

The enclosed chart comparesthe majorCanal commodityflows forthe first quarter offiscalyears 2002 and 2001.
* Includes cargo long ton projections by commodity groups for the month ofDecember 2001.


T1








Three New ACP Board Members Appointed


On December 27, 2001, the members of
Panama's Legislative Assembly unani-
mously approved the appointment of
three new members to the Panama
Canal Authority Board of Directors:
Messrs. Mario J. Galindo, Guillermo
Quijano and Antonio Dominguez, Jr. In
accordance with the Organic Law of the
Panama Canal Authority, directors are
appointed by the President of the
Republic with the
consent of the
Cabinet Council
and ratified by an
absolute majority of
the members of the
Legislative
Assembly. The new
board members
replace Messrs.
Rail Montenegro,
Luis Anderson and
Samuel Lewis
Navarro whose appointment term
expired during this year. Messrs.
Galindo, Quijano and Dominguez shall
serve in their posts for a term of 9 years,
and may only be removed for the
reasons set forth in Article 20 of the
Organic Law.
Mr. Mario J. Galindo holds an
Economics degree from Georgetown
University and Law degrees from the
Puerto Rico University and Tulane
University. Mr. Galindo has held
numerous high posts in the private and


New Marketing Manager

Mr. Oscar Bazin has
been appointed
Manager of the Canal's
Marketing Division.
Mr. Bazin brings to the
Canal more than 20
years of experience in
sales and marketing in
the shipping and
transportation industry. More recently,
he served as Sales Manager of Maersk-
Sealand offices in Panama. Before that
he held similar positions in Sea-Land
Service, Inc., and Crowley American
Transport. Mr. Bazan earned Industrial
Engineering and Business
Administration degrees from the
University of Panama. He completed
post-graduate studies on Strategic


governmental sector in Panama,
including the Ministry of Treasury.
Mr. Guillermo Quijano holds a Civil
Engineering degree from the
University of Santa Clara in California.
Mr. Quijano has dedicated his profes-
sional career to engineering and
management positions in the private
sector in Panama.
Mr. Antonio Dominguez, Jr. holds a
Bachelor of
Science degree
in Chemical
Engineering
from the
University of
Notre Dame, a
Master of
Science in
Industrial
Engineering
f r o m
Northwestern
University, and a Master of Business
Administration from J.L. Kellogg
Graduate School of Management at
Northwestern University. Mr.
Dominguez has worked in the private
sector in Panama, Mexico and Puerto
Rico.
The Canal administration is pleased
with the presidential appointments of
Messrs. Galindo, Quijano and
Dominguez to these important
positions and bids welcome to the new
Directors.


Planning and holds Masters Degrees
on Marketing and Maritime Business
from the University of Science and
Technology (ULACIT) Panama. Mr.
Baz~n's appointment is in line with
the Canal's efforts to strengthen its
management team and knowledge
base of the maritime industry. The
recent reorganization of the
Department of Corporate Planning
and Marketing brought about the
creation of a new Strategic Services
Division and the consolidation of the
Marketing Division which now
includes the office of Customer
Relations, Pricing and Tolls, Dry Bulks,
Liquid Bulks, Liner Services, Other
Specialized Services, and New
Business Development.


Congratulations
to the Panama Canal
Authority Advisory
Board Members

His Excellency, Mr. William
O'Neil, Secretary General of the
International Maritime
Organization was elected on
November 22, 2001, to head the
IMO for two further years.
Mr. William O'Neil is also the
Chairman of the Panama Canal
Authority Advisory Board. He was
appointed member on December
14, 1999 and has been since
Chairman ofthe board.
Mr. Gustavo Cisneros, a new and
valuable addition to the Advisory
Board, was featured in Forbes
Global, the English language
international edition of Forbes in
its November 26, 2001 issue. His
Cisneros Group has joint ventures
with AOL Latin America and
DirecTV and his Univision is the
fastest growing television network
in the United States. The article
highlights the immense potential of
Ibero-America, including the
enormous growth of the U.S.
Hispanic market. The Cisneros
Group appeared ranked 38th in a
list of the 50 largest private
companies outside the U.S. and is
the only Latin American company
to be included on the list.
The Panama Canal Authority
Advisory Board serves as a
consultative body for the Canal
enterprise with the main responsi-
bility to provide guidance and
recommendations to the Board of
Directors. The members of this
Board are recognized profession-
als with broad experience in the
business world and the Panama
Canal in particular. With the
assistance of the Advisory Board
the Canal has maintained a much
closer contact with the representa-
tives of the shipping industry.
Through the past two years, the
Board has provided valuable
guidance and recommendations to
the Panama Canal to assist us in
our permanent quest for a more
efficient, competitive and safe
waterway.


I~








National Maritime Strategy
On De-
cember
10, the
principal
authori-
ties
r e p r e-
senting
t h e
maritime competencies of the
Panamanian public administration
signed an agreement to complete in a
six-month period the National Maritime
Strategy.
The effort will focus on the analysis of the
strengths and weaknesses of Panama's


maritime sector and ways to increase
its development and economic
importance to the country. The
agreement in itself is a major mile-
stone because it establishes a coordi-
nating committee that will address
common issues that historically had
been addressed on individual basis by
each organization.
The development process of the
National Maritime Strategy will entail
work by consultants, workshops,
seminars, and the presentation of a
formal document with strategic
objectives, tasks, and recommenda-
tions to be carried out in the short,


medium, and long-term.
Panamanian President Mireya Moscoso
headed the ceremony attended by
representatives of all institutions and
organizations engaged in maritime
activities or commercial and industrial
activities or services that complement
the maritime sector. The Panama Canal
Authority, the Panama Maritime
Authority, the Interoceanic Region
Authority, the National Environmental
Authority, and the Panama Institute of
Tourism, signed the agreement endorsed
by the Panama Chamber of Shipping and
the Panama Maritime Law Association.


First Cruise Ship Arrives at Amador


The MS Amsterdam, the first Pacific liner
to dock at the Fort Amador Resort and
Marina (FARM) cruise ship terminal
during this cruise season, arrived with
1,200 passengers on board. The 61,000
grt., 1,380-passenger Amsterdam, is
owned by the Holland America Lines
and will call at Panama five times
between now and mid-January, and will
continue calling at the Pacific port until
March.
FARM is building a cruise ship terminal,
a shopping plaza, and a 120-room hotel,
with villas and casino, on Flamenco
Island, at the Pacific entrance to the
Panama Canal. The complete project
will house more than 50 businesses
including bars, restaurants, handicraft


Upcoming Conferences
The Panama Canal Administrator, Mr.
Alberto Alemin Zubieta, has been
invited to participate in the 2002 World
Economic Forum from January 31 to
February 4, 2002, at the Waldorf Astoria,
New York. Mr. Alemin has been a
valuable participant in the Governors
Meeting for Logistics and Transportation
Industry. For more information regard-
ing the World Economic Forum visit its
website at: http://www/weforum.org.
Administrator Alemin will be a keynote
speaker at the Panama Maritime VI
World Conference & Exhibition to be
held in Panama from the 24th through
the 27th of February 2002. The Panama
Maritime World Conference and
Exhibition is organized by the Panama


shops, coffee shops, boutiques, and a
marina with moorings for 165 yachts
ranging from 80 to 150 feet in length
and a pier for medium and small
cruise ships.
The total investment, according to
Andr6s L6pez Pifeiro, FARM Director
of Operations, adds upto $30 million,
and could be finished in two years.
FARM is also conducting negotiations
with Royal Caribbean, Celebrity
Cruises, and Princess Cruises,
regarding the arrival of new vessels for
next year's cruise ship season.
Government officials and business
leaders in Panama hope cruise ships
will soon begin making Panama a port




Maritime Law Association and the
Panama Chamber of Shipping, and
sponsored by the Panama Canal
Authority and Seatrade. Panama
Maritime VI will bring together top
professionals in the industry to discuss
and attempt solutions to the most
salient issues affecting international
maritime affairs. His Excellency
William O'Neil, Secretary General of
the International Maritime
Organization; Chris Horrocks,
Secretary General of the International
Chamber of Shipping; and Robert
Force, Director of the Admiralty
Institute, Tulane University, will be
among the distinguished participants.
A Panama Canal user's forum is


of call. As a lure for the cruise industry,
during the month of October two
important cruise terminals were
inaugurated at the Atlantic entrance of
the Panama Canal, the Cristobal Cruise
Terminal Pier 6 and the Port of Colon.
For a long time Panama has wanted to
develop tourism as a major source of
revenue. Panama has comparative
advantages over other ports in the
Caribbean, mainly because it is located
outside the hurricane belt; and because
it provides the unique experience of two
oceans on one port of call. Most cruise
lines serving the Alaskan and Caribbean
routes already provide transits through
the Panama Canal.




scheduled during the second day of the
conference. For more information, visit
http://www.panamamaritime.org.
From March 18 through 20, 2002, the
Panama Canal Authority will participate
in the Connecticut Maritime Association
(CMA) Shipping 2002 with exhibit #69 at
the Westin Hotel in Stamford,
Connecticut. The CMA 17th Annual
Conference and Exhibition, organized
by the Connecticut Maritime
Association, is the landmark North
American based event which brings
together leaders in the shipping industry
for business networking and industry
affairs. For information, please visit
http://www.cmaconnect.com


I~









Advisories to Shipping

The Maritime Operations Department
has issued clarification regarding
calculation of PC/UMS net tonnage of
passenger vessels. Advisory A-60-
2001explains that for the purpose of
calculating PC/UMS net tonnage, all
spaces that have been identified and
certifies for the use or possible use of
passengers are to be included in the
calculation of the vessel's total volume;
therefore, the definition of "Excludable
Spaces" as provided in the ITC 69,
Regulation 2, Section 5 does not apply
to areas such as balconies,
passageways, swimming pools, or
others designed and certified for the
exclusive use of passengers.
On November 19, 2001, the Director of
Maritime Operations issued an advisory
on the subject of vessels not designed to
carry containers on deck that are
transiting carrying containers on deck.
Advisory A-59-2001 explained that
containers are considered as cargo,
unless the container is permanently
welded to the deck and its volume is
included in the total volume of the
vessel, in which case, the container is



Scheduled Locks Outages

The Maritime Operations Director
released the tentative schedule of major
locks outages for calendar year 2002.
To better accommodate our customers'
needs, maintenance lane outages are
scheduled during periods in which
vessel arrival rate is the lowest and
which also coincides with the end of the
cruise season. Canal operations
managers evaluate historical traffic
conditions and maintenance
requirements and adjust the schedule as
necessary to minimize the negative
impact of such work on transit service.


The Panama Canal Railway
The President of Panama, Her Excellency
Mrs. Mireya Moscoso, inaugurated the
new transisthmian railroad on November
27, 2001. The Panama Canal Railway
Company, a partnership between the
Kansas City Southern Railway and Mi-
Jack products, has the concession to
operate the railroad that opens new
horizons to the most important


considered as an integral part of the
vessel. The abnormal situation of bulk
carriers carrying containers on deck
has been recently detected.
Customers are advised that
admesurers will proceed to calculate
the on deck container capacity and
such tonnage will be added to the
PC/UMS net tonnage and applied to
future transits. Dry bulk carriers
reported as being in a ballast
condition, but carrying containers on
deck, will be assessed the laden toll
rate.
On the basis of the provisions of
Article 78 of the Panama Canal
Authority Organic Law, and Article
139 of Agreement No. 13 of June 3,
1999, the Panama Canal Authority, in
Advisory to Shipping No. A-57-2001,
advised the international maritime
community of the requirements
applicable to transiting vessels
carrying radioactive cargoes. These
requirements respond to the
Authority's policy of maintaining the
highest standards of quality and safety
of transiting vessels, as well as



Minor maintenance work (3 days or
less) is not depicted, as schedule is
tailored to accommodate short
term customer needs.
In calendar year 2002 the locks
overhaul program includes
recondition of miter gates and Dates
other major locks maintenance
and improvements, such as the June3tol
rehabilitation of a total of 2,162 July7tol
m. (7,092 ft) of locomotive tow August12
track of which 431 m. (1,414 ft.) September
will be in Miraflores, 547 m. October21
(1,794 ft) in Pedro Miguel and
1,184 m. (3,884 ft.) in Gatun Locks.
The overhaul and major maintenance


transshipment center in Latin America.
The primary reason for the revival of
the railway is freight a dry canal,
capable of moving containers from the
Atlantic to the Pacific in a mere three
hours. Initially the target is 300,000
containers a year. By 2003, when the
Port of Balboa completes its second
phase of expansion, the railway


safeguarding the integrity of the users of
the interoceanic waterway, the national
community, the Authority, and its
personnel.
The requirements are based on the
Organic Law of the Panama Canal
Authority, which establishes in Article
57.4 the Authority's power to regulate the
insurance coverage required of vessels
transiting the Canal, for liabilities
resulting from damages caused by such
vessels to the Republic of Panama, the
Canal, its work force, and third parties.
To implement the provisions of the above-
mentioned law, the Regulation on
Navigation in Panama Canal Waters,
Chapter IX, Dangerous Cargo, establishes
that all vessels carrying dangerous cargo
shall provide current proof of financial
responsibility and adequate provision for
indemnity to the Republic of Panama, the
Authority, or any agency thereof, covering
public liability and loss as a result of
accidents owing to radioactive cargo.
These measures are consistent with
international insurance practices.





program is critical to continue providing
safe and reliable Canal operations.




Lane Transit
s Outage Miraflores PedroMiguel Gatun a i
Days Capacity
3 11 Lane Outage Lane Outage Lane Outage* 26-28
3 12 Lane Outage Lane Outage* 30-32
to 22 11 Lane Outage LaneOutage* 26-28
Lane Outace*
S16to 26 11 Dry chamber Lane Outage 2628
to31 11 Lane Outage 3032
Identifies the locks requiring a major outage of one of its two
lanes for maintenance/improvement projects. The Panama Canal
Authority may take advantage of these requirements to perform
simultaneous single lane outages for additional maintenance at
otherlocks.



expects to be transporting close to a
million containers. The railway is adding
a new dimension to the cargo-handling
potential of the Isthmus of Panama. Of
special interest to some shipping lines is
the fact that they may take advantage of
the rail service when the ship's cargo
causes its draft to exceed the limits of the
Canal locks.


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Visits by Clients and Users

On October 6, 2001, the Panama Canal
Authority Deputy Administrator, Dr.
Ricaurte Vasquez M., welcomed a
delegation of Central American
Magistrates headed by the Honorable
Antonio Giammattel Avil6s, President of
the Central American Court of Justice.
During their visit to Miraflores Locks, the
members of the delegation enjoyed a
luncheon with top management officials
of the Panama Canal, representatives of
international organizations, and other
government officials. The delegation had
the opportunity to tour the Miraflores
Locks and observe the lockage
operations while enjoying lunch.

The Panama Canal had the honor to
receive the Ministers of Environment of
Central America and the Caribbean who
gathered in Panama in October for the


1 st Water Fair of Central America. Atthe
Miraflores Locks, the ministers toured


Outreaching Efforts

As part of its intensified outreaching
program, the ACP participated in the
Florida Caribbean Cruise Association
Annual Conference in Aruba, from
October 2 to 5, 2001.
In October, Administrator Alberto
Alem~n Zubieta served as the keynote
speaker at the Annual Conference of the
American Society of Civil Engineers in
Houston. Administrator Alemin briefed
participants on "The Panama Canal: A
Route at the Service of the International
Maritime Industry," which included the
history, recent developments, and future
of the waterway. Several maritime
authorities, including high-ranking
executives from the Port of Philadelphia,
the Port of Houston, the Port of
Galveston, and the Port Authorities of


the Control House and received a full
briefing on Canal operations, the
various trade routes served by the
waterway, and the capacity
enhancement projects and plans for
future expansion. A group of Canal
officials took the participants for a
partial transit through Gaillard Cut and
Gatun Lake aboard the "Gaviota," thus
providing the members of the
delegation with an excellent
opportunity to view first-hand the
ongoing work being performed as part
of the Cut Widening Project.

In October and November, two groups
of college students from Mexico
visited the Panama Canal and received
a full briefing on Panama Canal
operations and its marketing program.
The first group of over 35 students was
from the University of Guanajuato; the
second group was comprised of 40
students majoring in International
Trade at the Monterrey Technological
University, D.F. Campus. The
participants were also given the
opportunity to observe the lockage
operations and learn about the various
trade routes served by the waterway.

On December 1, 2001, a delegation
from the Agency for the Prohibition of
Nuclear Weapons in Latin America
and the Caribbean (OPANAL) visited


New York and New Jersey, attended
the conference. Administrator
Alem~n also addressed participants at
the celebration of Panama Week in
Washington, D.C. Administrator
Alem~n offered an overall description
of Panama's recent port development
efforts, which have resulted in
growing cargo capabilities. Mr.
Rodolfo R. Sabonge, Director of
Corporate Planning and Marketing,
was the guest speaker at the first
Terminal Operators Conference (TOC)
of the Americas, held in October in
Miami, Florida. His presentation
involved the Panama Canal
modernization and expansion
programs.


the Panama Canal. The members of the
delegation toured the Miraflores Locks
and were briefed on Canal operations
and the modernization programs. They
also viewed the topographical model at
the Visitors Center and made a partial
transit through Gaillard Cut. The
OPANAL is an agency that provides
information on the international efforts
towards the prohibition of nuclear
weapons and furthers the efforts of the
nonproliferation regime, which is the
bedrock for the disarmament of nuclear
and other weapons of mass destruction.

On December 11, 2001, Canal
Administrator Alberto Alemin Zubieta
welcomed the Honorable Mohammed
ElBaradei, General Director of the
International Atomic Energy Agency
(IAEA); and Mr. Paulo Barretto, Division
Director for Europe, Latin America, and
Asia of the IAEA. Administrator Alemin
and Canal officials offered a breakfast
reception in honor of Mr. ElBaradei.
Later on, the IAEA officials visited the
Miraflores Locks, where they had the
opportunity to operate the miter gates
from the Control House and observe the
lockage operations. They also received
a full briefing on Panama Canal
operations. The IAEA serves as the
world's central intergovernmental forum
for scientific and technical cooperation
in the nuclear field.


Administrator Alemin Zubieta, Deputy
Administrator Dr. Vasquez, and other
top Canal officials met on November 7
with a delegation of the Panama
Chamber of Shipping, headed by its
President Mr. Carlos Urriola. The
President of the Panama Chamber of
Shipping expressed his satisfaction for
the excellent sense of teamwork
achieved by members of the Chamber's
Canal Affairs Commission and
Department of Maritime Operations
officials. Administrator Alemin made a
commitment to continue holding
meetings with the Chamber to jointly
find ways to improve the services
provided by the waterway to its
customers.


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MODERNIZATION PROGRAM


New Tugboats
As an important component of the
program, two brand new tugboats were
added to the Canal floating equipment
fleet. The units, Col6n and Cocl6,
named after two provinces in Panama,
arrived from Prince Edward Island,
Canada, on November 14 and were
christened by Panamanian President
Mireya Moscoso on December 4. The
incorporation of these tugboats implied
an investment of 10.6 million dollars.
With this new acquisition, the Canal
tugboat fleet was augmented to 22 units,
but the goal of the modernization
program is to reach 24 units by the end of
fiscal year 2002. The expanded fleet will
also provide more flexibility in
maintenance scheduling and improved
emergency response capability.
These new tugboats are made of steel
with a novel azimuth stern drive and
have a 4,400 horse power Deutz engine,
which will enable the Panama Canal
Authority to provide a better quality of
transit services to its customers.
Tugboats assist vessels during their Canal
transits, especially at the entrance and


exit to the locks, and during their
journey through Gaillard Cut, where
great maneuverability and power are
required.
This addition to the floating
equipment complements the recently
finished widening of Gaillard Cut.
Once the signaling work is finished
somewhere around March,
simultaneous transit of two Panamax-
type vessels will be possible along
what is known as the narrowest
portion of the waterway.


Gaillard Cut Widening Completed


A year ahead of schedule, the Gaillard
Cut Widening Program concluded on
November 6th. This widening will
increase the operating capacity of the


Panama Canal by 20 percent, enabling
the simultaneous transit of two Panamax-
type vessels and allowing for a more
flexible traffic scheduling of vessels in
the waterway.
Fomer Canal administrators, Messrs.
Fernando Manfredo and Gilberto
Guardia, attended the ceremony during
which Administrator Alberto Alemin
Zubieta conceded Mr. Guardiathe honor
of operating the dredge Christensen for


the final shovelful, at the precise
historical site that has constituted the
greatest challenge, first for the
construction workers, and then for the
operations--the site where the biggest
landslides have occurred throughout
history.
The completion of the project widens
the narrowest passage of the Panama
Canal from 152 meters to 192 meters
along straight stretches and up to 222
meters on curves. Originally
scheduled to be concluded in 2012,
the Gaillard Cut Widening Project was
sped up by more than 10 years, to be
concluded in December 2002 to meet
increasing traffic demands.
Only the signaling work, which is
scheduled to be ready by the end of
next year, is pending as part of the
Gaillard Cut Widening Program. The
widening is part of the Canal's $1-
billion modernization and
improvement program. While it was
originally estimated at a cost of more
than $600 million, its final cost was
kept under $300 million.


Rehabilitation of
Locomotive Tow Track
Another important part of the Panama
Canal Modernization and Improvement
Program is the rehabilitation of the
locomotive tow tracks. The entire
project calls for the rehabilitation of
more than 16,190 meters at the three
locks. The objective of the tow track
rehabilitation project is to remove and
replace the tracks and racks on which
the locomotives operate with a
structurally stronger system. This
stronger system is required to support
the loads exerted by the new
locomotives, in response to demands of
force and tolerance derived from the
increasing transits of Panamax vessels.
Bigger vessels require locomotives to
have greater power and, in turn,
produce greater wear on the tracks and
racks. This project began in Miraflores in
1997, with a 24.38-meter prototype.
The tracks are being upgraded to
withstand the greater stress load being
exerted on the tow tracks.
More than 7,300 meters of locks
locomotive tow track have now been
rehabilitated, representing a 45.13%
execution rate.

We want your comments
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your comments and suggestions
regarding this newsletter and the service
we provide. We would like to serve you
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for you and your business through this
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views about this media (format, content,
topics) and what you would like to see in
our next edition. If you would rather
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note with your correct email address to:
cpxc@pancanal.com If you need
additional copies or copies mailed to
other officials within your corporation,
please contact us (see box at right for
address, fax, and telephone numbers).



Corporate Planning and Marketing
Panama Canal Authority
ACP-CP P.O. BOX 025513
Miami FL 33102-5513
Tel.: (507) 272-7961 Fax: (507) 272-5916
e-mail: cpxc@pancanal.com
web site: www.pancanal.com

SEE THIS NEWSLETTER ON THE ACP WEB SITE AT:
www.pancanal.com
(then click on "Canal News")


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